130th Ohio General Assembly
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H. B. No. 573  As Introduced
As Introduced

130th General Assembly
Regular Session
2013-2014
H. B. No. 573


Representative Roegner 

Cosponsors: Representatives Huffman, Becker, Terhar, Wachtmann, Hood, Scherer, Adams, J., Romanchuk, McClain 



A BILL
To enact sections 2307.66, 2307.67, 2307.68, and 2307.69 of the Revised Code to prohibit a person from making a bad faith assertion of patent infringement, to permit a person aggrieved by a bad faith assertion of patent infringement to bring a tort action, and to authorize the Attorney General to investigate and to institute a civil action if the Attorney General believes a person has made a bad faith assertion of patent infringement.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 2307.66, 2307.67, 2307.68, and 2307.69 of the Revised Code be enacted to read as follows:
Sec. 2307.66. As used in sections 2307.66 to 2307.69 of the Revised Code:
(A) "Demand letter" means a letter, email, or other communication asserting or claiming that the target has engaged in patent infringement.
(B) "Institution of higher education" has the same meaning as in section 2741.01 of the Revised Code.
(C) "Target" means any of the following:
(1) A person who has received a demand letter or against whom an assertion or allegation of patent infringement has been made;
(2) A person who has been threatened with a tort action or against whom tort action has been filed alleging patent infringement;
(3) A person whose customers have received a demand letter asserting that the person's product, service, or technology has infringed a patent.
Sec. 2307.67.  (A) No person shall make a bad faith assertion of patent infringement.
(B) A court may consider the following factors as evidence that a person has made a bad faith assertion of patent infringement:
(1) A demand letter does not contain all of the following information:
(a) The patent number;
(b) The name and address of the patent owner or owners and assignee and assignees, if any;
(c) Factual allegations concerning the specific areas in which the target's products, services, and technology infringe the patent or are covered by the claims in the patent.
(2) Prior to sending a demand letter, the person fails to conduct an analysis comparing the claims in the patent to the target's products, services, and technology or the analysis was conducted but does not identify the specific areas in which the products, services, and technology are covered by the claims in the patent.
(3) A demand letter does not contain all of the information described in division (B)(1) of this section, the target requests the information, and the person fails to provide the information within a reasonable period of time.
(4) A demand letter demands payment of a license fee or response within an unreasonably short period of time.
(5) The person offers to license the patent for an amount that is not based on a reasonable estimate of the value of the license.
(6) The claim or assertion of patent infringement is meritless and the person knew, or should have known, that the claim or assertion is meritless.
(7) The claim or assertion of patent infringement is deceptive.
(8) The person or the person's subsidiaries or affiliates have previously filed or threatened to file one or more tort actions based on the same or similar claims of patent infringement and either of the following applies to the tort actions and threats to file tort actions:
(a) The tort action or threat to file a tort action lacked the information described in division (B)(1) of this section;
(b) The person attempted to enforce the claim of patent infringement in a tort action and the court found the claim to be meritless.
(9) Any other factor that the court finds relevant.
(C) A court may consider the following factors as evidence that a person has not made a bad faith assertion of patent infringement:
(1) A demand letter contains the information described in division (B)(1) of this section.
(2) If a demand letter does not contain the information described in division (B)(1) of this section and the target requests the information, the person provides the information within a reasonable period of time.
(3) The person engages in a good faith effort to establish that the target has infringed the patent and to negotiate an appropriate remedy.
(4) The person makes or has made a substantial investment in the use of the patent or in the production or sale of a product or item covered by the patent.
(5) The person is any of the following:
(a) The inventor or joint inventor of the patent or, in the case of a patent filed by and awarded to an assignee of the original inventor or joint inventor, is the original assignee;
(b) An institution of higher education or a technology transfer organization owned or affiliated with an institution of higher education.
(6) The person has done either of the following:
(a) Demonstrated good faith business practices in previous efforts to enforce the patent or a substantially similar patent;
(b) Successfully enforced the patent or a substantially similar patent through a tort action.
(7) Any other factor that the court finds relevant.
(D) It is not a violation of division (A) of this section for a person who owns or has the right to license or enforce a patent to notify a person of that ownership or right of license or enforcement, to notify a person that the patent is available for license or sale, to notify a person of the infringement of that patent pursuant to the provisions of Title 35 of the United States Code, or to seek compensation from a person on account of a past or present infringement of that patent, or for a license, when it is reasonable to believe that the person from whom compensation is sought may owe such compensation.
(E) Sections 2307.66 to 2307.69 of the Revised Code do not apply to a demand letter or civil action that includes a claim for relief under 35 U.S.C. 271(e)(2).
Sec. 2307.68.  (A) A target or other person aggrieved by a bad faith assertion of patent infringement in violation of division (A) of section 2307.67 of the Revised Code may bring a tort action in the court of common pleas of the county of the target's residence or primary place of business.
(B) Upon motion by a target and a finding by the court that a target has established a reasonable likelihood that a person has made a bad faith assertion of patent infringement in violation of section 2307.67 of the Revised Code, the court shall require the person to post a bond in an amount equal to a good faith estimate of the target's costs to litigate the tort action and amounts reasonably likely to be recovered under section 2307.69 of the Revised Code, conditioned upon payment of any amounts finally determined to be due to the target. The court shall not order a bond in excess of two hundred fifty thousand dollars. The court shall hold a hearing on the bond if the person or target requests a hearing. The court may waive the bond requirement if the court finds that the person has available assets equal to the amount of the proposed bond or for other good cause shown.
(C)(1) A court may award all of the following to a plaintiff who prevails in an action brought under this section:
(a) Equitable relief;
(b) Compensatory damages;
(c) Costs and fees of litigation, including reasonable attorney's fees;
(d) Exemplary damages in an amount equal to $50,000 or three times the total of damages, costs, and fees, whichever is greater.
(2) Section 2315.21 of the Revised Code applies to a tort action brought under division (A) of this section if the target makes a claim for both compensatory damages and for punitive or exemplary damages.
(D) Division (A) of this section does not limit or affect a target's right to bring a tort action related to patent infringements under any other provision of state or federal law.
Sec. 2307.69. (A) If the attorney general, by the attorney general's own inquiries or as a result of complaints, has reasonable cause to believe that a person has made a bad faith assertion of patent infringement the attorney general may investigate. For this purpose, the attorney general may administer oaths, subpoena witnesses, adduce evidence, and require the production of relevant matter. If the relevant matter is located outside the state, the attorney general may designate representatives, including officials of the state in which the matter is located, to inspect the matter on the attorney general's behalf.
(B) The attorney general may institute a civil action in accordance with section 109.16 of the Revised Code seeking injunctive and other equitable relief in connection with a bad faith assertion of patent infringement if the attorney general believes that the action would be in the public interest. The attorney general may bring an action to obtain a temporary restraining order, preliminary injunction, or permanent injunction to restrain and prevent a person from taking actions and making assertions or allegations that constitute a bad faith assertion of patent infringement. The court may issue a temporary restraining order, preliminary injunction, or permanent injunction to restrain or prevent the person from taking actions and making assertions or allegations that constitute a bad faith assertion of patent infringement.
(C) This section does not limit or affect other rights, duties, privileges, and powers conferred by law upon the courts and the attorney general.
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