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Regular Session, 2014
HOUSE BILL NO. 564
BY REPRESENTATIVE PONTI
COMMERCE: Makes it an unfair trade practice to engage in bad faith assertions of patent
infringement
AN ACT1
To enact R.S. 51:1428, relative to patent infringement and unfair trade practices; to provide2
for definitions; to prohibit bad faith assertions of patent infringement; and to provide3
for related matters.4
Be it enacted by the Legislature of Louisiana:5
Section 1. R.S. 51:1428 is hereby enacted to read as follows:6
§1428. Unfair or deceptive trade practice or act; bad faith assertions of patent7
infringement8
A. In this Section:9
(1) "Demand letter" means a letter, e-mail, or other communication that does10
either of the following:11
(a) Asserts, alleges or claims that the target has engaged in patent12
infringement.13
(b) Requests or demands the target to obtain a license to a patent or to14
otherwise pay compensation in order to avoid litigation.15
(2) "Target" means a Louisiana person or business that meets either of the16
following:17
(a) Who has received a demand letter or against whom an assertion or18
allegation of patent infringement has been made. 19
(b) Who has been threatened with litigation for alleged patent infringement.20 HLS 14RS-1264 ORIGINAL
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(c) Whose customers have received a demand letter asserting that the1
person’s or business’s product, service, or technology, or the person’s use thereof,2
has infringed a patent.3
B. (1) A person shall not make a bad faith assertion of patent infringement.4
(2) A court may consider any of the following factors as evidence that a5
person has made a bad faith assertion of patent infringement:6
(a) The demand letter received by the target does not contain all of the7
following information:8
(i) The patent number, or the patent application number if no patent number9
has been issued.10
(ii) The name and address of the patent owner or owners and assignee or11
assignees, if any.12
(iii) Factual allegations concerning the specific areas in which the accused13
products, services, or technology, or the target’s manufacture, use, sale, or offer for14
sale thereof, infringe the patent or are covered by the claims in the patent.15
(b) The person sends a demand letter to a target without first making a16
reasonable effort under the circumstances to conduct an analysis comparing the17
claims in the patent to the accused products, services, or technology, or to identify18
specific areas in which the products, services or technology are covered by the19
claims in the patent.20
(c) The demand letter lacks the information described in Subparagraph (2)(a)21
of this Subsection, the target requests the information, and the person fails to provide22
the information within a reasonable period of time.23
(d) The demand letter demands payment of a license fee or response within24
an unreasonably short period of time.25
(e) The claim or assertion of patent infringement is meritless, and the person26
knew, or should have known, that the claim or assertion is meritless.27
(f) The person or its subsidiaries or affiliates have previously filed or28
threatened to file one or more lawsuits based on the same or similar claim of patent29 HLS 14RS-1264 ORIGINAL
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infringement and those threats or lawsuits lacked the information described in1
Subparagraph (2)(a) of this Subsection.2
(g) The demand letter or assertion of patent infringement contains material3
misrepresentations of fact.4
(h) Any other factor the court finds relevant.5
(3) A court may consider any of the following factors as evidence that a6
person has not made a bad faith assertion of patent infringement:7
(a) The demand letter received by a target contains the information described8
in Subparagraph (2)(a) of this Subsection.9
(b) Where the demand letter lacks the information described in Subparagraph10
(2)(a) of this Subsection and the target requests the information, the person provides11
the information within a reasonable period of time.12
(c) The person engages in a good faith effort to establish that the target has13
infringed or may be infringing the patent and to negotiate an appropriate remedy.14
(d) The person makes a substantial investment in the use of the patent or in15
the production or sale of a product, service, or technology covered by the patent.16
(e) The person is:17
(i) The inventor or joint inventor of the patent or, in the case of a patent filed18
by and awarded to an assignee of the original inventor or joint inventor, is the19
original assignee.20
(ii) An institution of higher education or a technology transfer organization21
owned or affiliated with an institution of higher education.22
(f) The person has:23
(i) Demonstrated good faith business practices in previous efforts to enforce24
the patent, or a substantially similar patent.25
(ii) Successfully enforced the patent, or a substantially similar patent,26
through litigation.27
(g) Any other factor the court finds relevant.28 HLS 14RS-1264 ORIGINAL
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C. Any violation of this Section shall be an unfair or deceptive trade practice1
or act declared unlawful by R.S. 51:1401 et seq. and shall subject the violator to any2
and all penalties, remedies, actions, and relief provided for in this Chapter.3
D. The remedies and rights provided pursuant to this Section are in addition4
to and do not preclude any remedy otherwise available under law.5
E. Any person who is found liable pursuant to the provisions of this Section6
shall be liable for all costs, expenses and fees related to investigations and7
proceedings associated with the violation, including attorney fees. An action to8
recover costs, expenses, fees, and attorney fees shall be ancillary to, and shall be9
brought and heard in the same court as the civil action brought pursuant to the10
provisions of this Chapter.11
Section 2. If any provision of this Act or the application thereof is held invalid, such12
invalidity shall not affect other provisions or applications of this Act which can be given13
effect without the invalid provisions or applications, and to this end the provisions of this14
Act are hereby declared severable.15
Section 3. This Act shall become effective upon signature by the governor or, if not16
signed by the governor, upon expiration of the time for bills to become law without signature17
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If18
vetoed by the governor and subsequently approved by the legislature, this Act shall become19
effective on the day following such approval.20
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Ponti HB No. 564
Abstract: Prohibits bad faith assertions of patent infringement and subjects violators to
unfair or deceptive trade practice penalties.
Proposed law provides for the following definitions:
"Demand letter" means a letter, e-mail, or other communication that:
(a) Asserts, alleges or claims that the target has engaged in patent infringement. HLS 14RS-1264 ORIGINAL
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(b) Requests or demands the target to obtain a license to a patent or to otherwise pay
compensation in order to avoid litigation.
"Target" means a Louisiana person or business:
(a) Who has received a demand letter or against whom an assertion or allegation of
patent infringement has been made.
(b) Who has been threatened with litigation for alleged patent infringement.
(c) Whose customers have received a demand letter asserting that the person’s or
business’s product, service, or technology, or the person’s use thereof, has infringed a patent.
Proposed law prohibits a person from making a bad faith assertion of patent infringement.
Proposed law provides that a court may consider any of a list of factors as evidence that a
person has made a bad faith assertion of patent infringement.
Proposed law provides that any violation of proposed law shall be an unfair or deceptive
trade practice or act declared unlawful by the Unfair Trade Practices and Consumer
Protection Law, and shall subject the violator to any and all penalties, remedies, actions, and
relief provided for in present law.
Proposed law provides that the remedies and rights provided under proposed law are in
addition to and do not preclude any remedy otherwise available under law.
Proposed law provides that any person who is found liable under the provisions of proposed
law shall be liable for all costs, expenses and fees related to investigations and proceedings
associated with the violation, including attorney fees. An action to recover costs, expenses,
fees, and attorney fees shall be ancillary to, and shall be brought and heard in the same court
as the civil action brought under the provisions of present law.
If any provision of proposed law or the application thereof is held invalid, such invalidity
shall not affect other provisions or applications of proposed law which can be given effect
without the invalid provisions or applications, and to this end the provisions of proposed law
are declared severable.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(Adds R.S. 51:1428)