Texas Puts a Stop to Bad Faith Claims of Patent Infringement | Practical Law

Texas Puts a Stop to Bad Faith Claims of Patent Infringement | Practical Law

Texas Governor Greg Abbot has signed a bill prohibiting the communication of bad faith claims of patent infringement to Texas-based end users of products, services or technologies.

Texas Puts a Stop to Bad Faith Claims of Patent Infringement

Practical Law Legal Update 0-616-6292 (Approx. 3 pages)

Texas Puts a Stop to Bad Faith Claims of Patent Infringement

by Practical Law Intellectual Property & Technology
Published on 22 Jun 2015 • USA (National/Federal)
Texas Governor Greg Abbot has signed a bill prohibiting the communication of bad faith claims of patent infringement to Texas-based end users of products, services or technologies.
On June 17, 2015, Texas governor Greg Abbott signed Senate Bill No. 1457, which prohibits any person from communicating a bad faith claim of patent infringement to an end user in Texas.
Under the new law, an end user includes any person that both:
  • Obtains a product, service or technology in the commercial market that is not for resale.
  • Is, or later becomes, the subject of a patent infringement assertion due to the person's use of the product, service or technology.
The law defines a bad faith patent infringement claim as any claim that either:
  • Falsely states that the sender has filed a lawsuit in connection with the claim.
  • Is objectively baseless because:
    • the sender or a person the sender represents does not have a current right to license the patent to, or enforce the patent against, the end user;
    • the patent has been held invalid or unenforceable in a final judgment or administrative decision; or
    • the infringing activity alleged in the communication occurred after the patent expired.
  • Is likely to materially mislead a reasonable end user because the communication does not contain information sufficient to inform the end user of:
    • the identity of the person asserting the claim;
    • the patent that is alleged to have been infringed; and
    • the product, service, technology or activity that allegedly infringes the patent.
The new law does not create a private cause of action. However, it authorizes the Texas attorney general to bring an action to obtain:
  • An injunction.
  • Any other relief that may be in the public interest, including:
    • a civil penalty up to $50,000 per violation;
    • an order reimbursing the state for the value of investigating and prosecuting the violation; or
    • an order requiring restitution to the victim for any legal and professional expenses related to the violation.
The new law goes into effect on September 1, 2015.