SB 681 Senate Bill

BILL NUMBER: SB 681	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 3, 2015
	AMENDED IN SENATE  MAY 5, 2015

INTRODUCED BY   Senator Hill

                        FEBRUARY 27, 2015

   An act to add Title 19 (commencing with Section 3273.5) to Part 4
of Division 3 of the Civil Code, relating to civil law.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 681, as amended, Hill. Civil law: patents.
   Existing federal law provides for the issuance and enforcement of
patents, makes a person who actively induces infringement of a patent
liable as an infringer, and establishes rights and remedies for
infringement of patents.
   This bill would make it unlawful to engage in a pattern or
practice of sending written communications, stating that the
recipient, as defined, is or may be infringing, or has or may have
infringed, on a United States patent if the sender of the
communication makes a specified false statement or representation in
bad faith, fraudulently seeks compensation for specified conduct, or
fraudulently conceals or omits specified information in the
communication.
   The bill would provide that a person who sends a communication in
violation of these provisions may be enjoined and is liable for a
civil penalty of up to $2,500 for each violation. The bill would also
specify that its provisions are only enforceable by the Attorney
 General or by   General,  an attorney
acting on behalf of the  state.   state, or a
district attorney, county counsel, city attorney, or city prosecutor
in this state.  The bill would specify that  it does
  its provisions do  not impair or impede any other
rights, causes of action, claims, or defenses available under other
law and that the remedies provided for under its provisions are
cumulative with any other remedies available under other law.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Title 19 (commencing with Section 3273.5) is added to
Part 4 of Division 3 of the Civil Code, to read:

      TITLE 19.  Patent Demands


   3273.5.  For the purposes of this title, the following definitions
shall apply:
   (a) "Final determination" means, with respect to the invalidity or
unenforceability of a patent, that the invalidity or
unenforceability has been determined by a court of the United States
or the United States Patent and Trademark Office in a final decision
that is unappealable or for which any opportunity for appeal is no
longer available.
   (b) "Recipient" means a person who purchases, rents, leases, or
otherwise obtains a product or service in the commercial market that
is not for resale in the commercial market and that is, or later
becomes, the subject of a patent infringement allegation.
   3273.6.  It is unlawful for a person, in connection with the
assertion of a United States patent, to engage in a pattern or
practice of sending written communications that state or represent
that the recipient is or may be infringing, or has or may have
infringed, the patent and is liable or owes compensation to another,
if any of the following conditions are met:
   (a) The sender of the communication makes, in bad faith, any of
the following statements or representations, knowing those statements
or representations are false:
   (1) That the sender has the right to license or enforce the patent
at the time the communications are sent, if the sender is not a
person with that right.
   (2) That a civil action asserting a claim of infringement of the
patent has been filed against either the recipient or against other
persons.
   (3) That legal action for infringement of the patent will be taken
against the recipient.
   (4) That the sender is the exclusive licensee of the patent
asserted in the communications.
   (5) That persons other than the recipient purchased a license for
the patent asserted in the communications.
   (6) That persons other than the recipient purchased a license, and
the sender does not disclose that the license is unrelated to the
alleged infringement or the patent asserted in the communications.
   (7) That an investigation of the recipient's alleged infringement
has occurred.
   (8) That the sender, or an affiliate of the sender, previously
filed a civil action asserting a claim of infringement of the patent
based on the activity that is the subject of the written
communication when the sender knew that the activity was held, in a
final determination, not to infringe the patent.
   (b) The sender of the communication fraudulently seeks
compensation for any of the following:
   (1) A patent claim that has been determined to be unenforceable or
invalid against the recipient in a final determination.
   (2) Activity undertaken by the recipient after expiration of the
patent asserted in the communication.
   (3) Activity of the recipient that the sender knew was authorized,
with respect to the patent claim that  are  is
 the subject of the communication, by a person with the right to
license the patent.
   (c) The sender of the communication fraudulently conceals or omits
any of the following information from the communication, when that
information is readily available to the sender at the time the
communication is sent:
   (1) The identity of the person asserting a right to license the
patent to, or enforce the patent against, the recipient, including
the identity of any parent entity and the ultimate parent entity of
the person, unless that person is a public company and the name of
the public company is identified.
   (2) Identification of at least one patent issued by the United
States Patent and Trademark Office alleged to have been infringed.
   (3) Identification, to the extent reasonable under the
circumstances, of at least one product, service, or other activity of
the recipient that is alleged to infringe the identified patent.
   (4) A description, to the extent reasonable under the
circumstances, of how the product, service, or other activity of the
recipient infringes an identified patent and patent claim.
   (5) A name and contact information for a person the recipient may
contact about the assertions or claims relating to the patent
contained in the communications.
   3273.7.  (a) A person who sends a communication in violation of
Section 3273.6 may be enjoined in a court of competent jurisdiction
and is liable for a civil penalty not to exceed two thousand five
hundred dollars ($2,500) for each violation. The penalty collected in
an action by the Attorney General or an attorney acting on behalf of
the state shall be paid to the General Fund.
   (b)  The   Subject to subdivision (c), the
 Attorney  General or   General,  an
attorney acting on behalf of the state  , or a district attorney,
county counsel, city attorney, or city prosecutor in this state
 shall have the sole authority to enforce this  title.
  title with resp   ect to the unlawful acts
expressly enumerated in Section 3273.6.  Nothing in this title
shall be construed to create a private right of  action.
  action with respect to the unlawful acts expressly
enumerated in Section 3273.6. 
   (c)  Nothing   Except as provided in
subdivision (b) with respect to the unlawful acts expressly 
 enumerated in Section 3273.6, nothing  in this title shall
be construed to impair or impede any other rights, causes of action,
claims, or defenses available under other law. The remedies provided
in this title are cumulative with any other remedies available under
other law.