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Patent Trolling Prevention in Wisconsin

By September 26, 2016No Comments

In recent years, “patent trolls” have increasingly acquired large patent portfolios, not to innovate or create products, but to leverage payments from so-called patent “infringers.”

These trolling companies send form demand letters to targeted patent owners, accusing them of infringement, often with no description of infringing conduct or even the so-called infringed patent.

To avoid costly litigation, many targets pay to “settle” rather than defend themselves.

To curb bad-faith patent trolls, Wisconsin, with 26 other states, has enacted anti-patent trolling legislation.

Wisconsin’s law prohibits the mindless “patent notifications” – the assertion or enforcement of patent rights, through letters, e-mail or other written communications – issued to Wisconsin companies, by requiring that they contain the following information:

  • The “infringed” patent/patent application number;
  • A copy of such patent/pending application;
  • The name and address of the patent/application owner and others with enforcement rights;
  • Each asserted claim, and each relevant product, service, process, or technology of the target;
  • The theory of each claim, and its relation to the target; and
  • Every legal proceeding, pending or completed, as to each patent/pending patent.

If a notification is incomplete, the sender must provide all required information within 30 days after notice by the recipient.

The law also prohibits false, misleading, or deceptive information within a patent notification.

Patent notifications that omit or contain false, misleading, or deceptive information are subject to a $50,000 fine for each violation.

Aside from government enforcement actions, recipients of notifications violating the statute may bring private actions against the sender.

Injunctions, damages, costs and reasonable attorneys’ fees are available to private action winners.

Punitive damages are also recoverable, equal to the greater of up to $50,000 per violation or three times the total amount otherwise awarded.

The statute does exempt isolated entities, including higher education and certain health care or research institutions. Most companies trolling Wisconsin businesses, however, should be covered.

If you receive a patent notification, contact your FOS attorney to review its compliance with Wisconsin’s patent notification statute.