Idaho companies’ defense against frivolous patent infringement lawsuits was bolstered Tuesday when Gov. Butch Otter signed a new law.
In the last decade, companies known as “patent trolls” have stockpiled patents with the intention to sue companies for infringement rather than to develop products of their own. Patent trolls often send vague threats demanding a license fee or fishing for companies wanting to avoid litigation to settle. Patent trolls often send the same form letter to many companies in the same industry.
Micron Technology Inc. was among the Idaho businesses asking for a law to diminish patent trolls’ ability to threaten legal action. Micron Government Affairs Manager Mike Reynoldson told the Statesman Micron, which holds thousands of patents, has seen an increase in patent troll threats over the last 15 years. He said it was important for Micron to protect its patents while fending off frivolous, bad-faith lawsuit threats or attempts to strong-arm payments.
“This law sends a strong message that this type of activity is not going to be tolerated in Idaho,” Reynoldson said. “That’s good for all business, large and small, and I think it sends a message to Congress that they should consider looking into patent law at the federal level.”
The law defines bad-faith patent litigation threats as the following:
•The letter threatening patent infringement litigation lacks the patent number or name and address of the sender.
•The letter demands payment for a license fee or a response in an unreasonably short period of time.
•The person offers to license the patent for an amount that is not reasonably based on the value of the license to the patent.
•The person asserting a claim or allegation of patent infringement acts in subjective bad faith, or a reasonable actor in the person’s position would know or reasonably should know that such assertion is without merit.
Reynoldson said other Idaho organizations who have dealt with patent trolls who supported the law included the Idaho Association of Realtors, the Idaho Retailers Association, the Idaho Bankers Association and the Idaho Credit Union League.