PublishedJune 21, 2024

States Join Together to Defend Against NPEs

In 2013, Vermont became the first state to pass an “anti-patent troll” law. Since then, more than 30 states have passed similar laws to rein in patent trolls. These efforts, which range from allowing companies and states to sue patent trolls for bad-faith assertions, to providing civil penalties and to giving companies that are targeted the opportunity to seek damages, have helped discourage trolls from targeting small businesses and inventors. 

Unsurprisingly, over the last several years, a handful of states have been challenged in court by patent trolls who argue that these laws are unconstitutional and infringe on federal patent law. An Idaho law, the most recent target of such challenges, imposes a bond requirement on NPEs. This measure requires NPEs to prove that, if they are found to be likely to have violated the bad-faith assertion law, they will be able to pay any penalty imposed by the law. This helps deter NPEs from making bad-faith assertions. In other words, it forces NPEs to think twice before they target a small business for patent infringement.

The Idaho case stemmed from a patent infringement claim that was filed by Longhorn IP LLC and Katana Silicon Technologies LLC against chip maker Micron Technology Inc. in 2022. Under the Idaho law, a federal judge ordered Katana to post an $8 million bond based on accusations that the patents were asserted “deceptively.” In response, Longhorn called the law “the most extreme” statute in the country, arguing that it, “and particularly its bond provision are unconstitutional and preempted” by federal law.

The pushback was swift. We at CCIA submitted a brief alongside the High Tech Inventors Alliance in support of the Idaho law, explaining that it is not only essential for preventing abuse in the patent system, but is in full compliance with federal patent law. “This Court,” we wrote “should uphold the judgment below, finding that the Idaho bad faith assertion statute is not preempted as the court below found, in line with the decisions of other district courts around the country examining similar state bad faith patent assertion laws.” The 34 state legislatures that have passed similar laws, we argue, have the right to protect local businesses from abuse and “the Federal Circuit should not lightly second-guess these states and their elected legislatures.” 

We were not alone. Twenty-seven states, led by North Carolina Attorney General Joshua H. Stein, submitted a separate brief, outlining a similar argument and urging the appeals court to side with Micron and the state of Idaho. 

While the NPEs argue that this is a case of federal vs. state law, it’s not really about that at all. Not only are these state laws legal and in compliance with federal court precedents, but they are common-sense measures that help deter abuse in our court system and protect American businesses and inventors from costly and unfair litigation – something we should all be able to support. 

Josh Landau

Patent Counsel, CCIA

Joshua Landau is the Patent Counsel at the Computer & Communications Industry Association (CCIA), where he represents and advises the association regarding patent issues.  Mr. Landau joined CCIA from WilmerHale in 2017, where he represented clients in patent litigation, counseling, and prosecution, including trials in both district courts and before the PTAB.

Prior to his time at WilmerHale, Mr. Landau was a Legal Fellow on Senator Al Franken’s Judiciary staff, focusing on privacy and technology issues.  Mr. Landau received his J.D. from Georgetown University Law Center and his B.S.E.E. from the University of Michigan.  Before law school, he spent several years as an automotive engineer, during which time he co-invented technology leading to U.S. Patent No. 6,934,140.

Follow @PatentJosh on Twitter.

More Posts

New Case-Assignment Order Marks Next Step in Curbing Judge Shopping in Texas

Late last month, Chief U.S. District Judge for the Western District of Texas Alia Moses announced a new order to distribute patent cases randomly across the district, while raising the bar for plainti...

The U.S. Intellectual Property System and the Impact of Litigation Financed by Third-Party Investors and Foreign Entities

On Wednesday, June 12th, Paul Taylor, a Visiting Fellow at the National Security Institute at George Mason University – and previous Patent Progress contributor – testified in front of the House J...

The Ripple Effects of Patent Venue

A recent article described the outsized roles that two modest cities in Texas play in U.S. patent litigation, but there's more to the story of America’s odd patent venue rules. The article alludes t...

Subscribe to Patent Progress

No spam. Unsubscribe anytime.