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Regular Session, 2014
SENATE BILL NO. 255
BY SENATOR MARTINY
COMMERCIAL REGULATIONS. Provides relative to Unfair Trade Practices and
Consumer Protection Law. (gov sig)
AN ACT1
To enact R.S. 51:1428, provides relative to Unfair Trade Practices and Consumer Protection2
Law; to provide relative to patent infringement; to provide for definitions; to provide3
for unfair and deceptive trade practices; to provide for damages; to provide for4
procedures, terms, and conditions; and to provide for related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 51:1428 is hereby enacted to read as follows:7
ยง1428. Unfair or deceptive trade practice or act; bad faith assertions of patent8
infringement9
A. As used in this Section, the following words and phrases shall have the10
following meanings:11
(1) "Demand letter" means a letter, email, or other communication that12
does either of the following:13
(a) Asserts, alleges, or claims that the end-user has engaged in patent14
infringement.15
(b) Requests or demands the end-user to obtain a license to a patent or16
to otherwise pay compensation in order to avoid litigation.17 SB NO. 255
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
(2) "End-user" means a consumer, whether an individual, business, or1
financial institution, who purchases, rents, leases, or otherwise obtains a2
product, service, or technology in the commercial market that is not for resale3
and is, or later becomes, the subject of a patent infringement assertion.4
B.(1) No person shall make a bad faith assertion of patent infringement5
against an end-user.6
(2) A court may consider any of the following factors as evidence that a7
person has made a bad faith assertion of patent infringement against an end-8
user:9
(a) The demand letter received by the end-user does not contain all of the10
following information:11
(i) The patent number or the patent application number, if no patent12
number has been issued.13
(ii) The name and address of the patent owner or owners and assignee14
or assignees, if any.15
(iii) The factual allegations concerning the specific areas in which the16
products, services, or technology obtained by the end-user, or their use thereof,17
infringe the patent or are covered by the claims in the patent.18
(b) The person sends a demand letter to an end-user without first making19
a reasonable effort to conduct an analysis comparing the claims in the patent20
to the products, services, or technology obtained by the end-user, or to identify21
specific areas in which the products, services, or technology are covered by the22
claims in the patent.23
(c) When the demand letter lacks the information described in24
Subparagraph (2)(a) of this Subsection and the end-user requests information25
from the person, the person fails to provide the requested information within26
a reasonable period of time.27
(d) The demand letter requires payment of a license fee or response from28
an end-user within an unreasonably short period of time.29 SB NO. 255
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(e) The claim or assertion of patent infringement against an end-user is1
without merit, and the person knew or should have known, that the claim or2
assertion is without merit.3
(f) The person or its subsidiaries or affiliates have previously filed or4
threatened to file one or more lawsuits against an end-user based on the same5
or similar claim of patent infringement and those lawsuits or threats lacked the6
information described in Subparagraph (2)(a) of this Subsection.7
(g) The demand letter or assertion of patent infringement contains any8
material misrepresentation of fact.9
(3) A court may consider any of the following factors as evidence that an10
assertion of patent infringement against an end-user was not made in bad faith:11
(a) The demand letter received by an end-user contains the information12
described in Subparagraph (2)(a) of this Subsection.13
(b) When the demand letter lacks the information described in14
Subparagraph (2)(a) of this Subsection and the end-user requests the15
information, the person provides the information within a reasonable period of16
time.17
(c) The person engages in a good faith effort to establish that the end-18
user has infringed or may be infringing the patent and to negotiate an19
appropriate remedy.20
(d) The person makes a substantial investment in the use of the patent21
or in the production or sale of a product, service, or technology covered by the22
patent.23
(e) The person is either of the following:24
(i) The inventor or joint inventor of the patent or, in the case of a patent25
filed by and awarded to an assignee of the original inventor or joint inventor,26
the original assignee.27
(ii) An institution of higher education or a technology transfer28
organization owned by or affiliated with an institution of higher education.29 SB NO. 255
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(f) The person has demonstrated good faith business practices in1
previous efforts to enforce the patent, or a substantially similar patent or has2
successfully enforced the patent, or a substantially similar patent, through3
litigation.4
(g) Any other factor the court finds relevant.5
C.(1) The attorney general has the sole authority to investigate and6
pursue any violation of this Section as an unfair or deceptive trade practice or7
act pursuant to R.S. 51:1401 et seq.8
(2) Any person who is found liable under the provisions of this Section9
shall be liable to the attorney general for all costs, expenses, and fees related to10
investigations and proceedings associated with the violation, including attorney11
fees. An action to recover costs, expenses, fees, and attorney fees shall be12
ancillary to, and shall be filed and heard in the same court as a civil action filed13
under the provisions of this Section.14
D. The remedies and rights provided under this Section are in addition15
to and do not preclude any right or remedy otherwise authorized by law.16
E. Any person outside the state asserting patent infringement by an end-17
user in the state shall be deemed to be transacting business within the state18
within the meaning of R.S.13:3201 and shall thereby be subject to the19
jurisdiction of the courts of this state.20
Section 2. This Act shall become effective upon signature by the governor or, if not21
signed by the governor, upon expiration of the time for bills to become law without signature22
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If23
vetoed by the governor and subsequently approved by the legislature, this Act shall become24
effective on the day following such approval.25
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Michelle Ducharme.
DIGEST
Martiny (SB 255)
Present law provides relative to the Unfair Trade Practices and Consumer Protection Law. SB NO. 255
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Proposed law defines the term "demand letter" as a letter, email, or other communication that
does either of the following:
(1)Asserts, alleges, or claims that the end-user has engaged in patent infringement.
(2)Requests or demands the end-user to obtain a license to a patent or to otherwise pay
compensation in order to avoid litigation.
Proposed law defines "end-user" as a consumer, whether an individual, business, or financial
institution, who purchases, rents, leases, or otherwise obtains a product, service, or
technology in the commercial market that is not for resale and is, or later becomes, the
subject of a patent infringement assertion.
Proposed law provides that no person shall make a bad faith assertion of patent infringement
against an end-user.
Proposed law provides that a court may consider any of the following factors as evidence
that a person has made a bad faith assertion of patent infringement against an end-user:
(1)The demand letter received by the end-user does not contain all of the following
information:
(a)The patent number or the patent application number, if no patent number has
been issued.
(b)The name and address of the patent owner or owners and assignee or
assignees, if any.
(c)The factual allegations concerning the specific areas in which the accused
products, services, or technology obtained by the end-user, or their use
thereof, infringe the patent or are covered by the claims in the patent.
(2)The person sends a demand letter to an end-user without first making a reasonable
effort to conduct an analysis comparing the claims in the patent to the products,
services, or technology obtained by the end-user, or to identify specific areas in
which the products, services, or technology are covered by the claims in the patent.
(3)When the demand letter lacks certain information and the end-user requests
information from the person, the person fails to provide the requested information
within a reasonable period of time.
(4)The demand letter requires payment of a license fee or response from an end-user
within an unreasonably short period of time.
(5)The claim or assertion of patent infringement against an end-user is without merit,
and the person knew or should have known, that the claim or assertion is without
merit.
(6)The person or its subsidiaries or affiliates have previously filed or threatened to file
one or more lawsuits based on the same or similar claim of patent infringement and
those lawsuits or threats lacked certain information.
(7)The demand letter or assertion of patent infringement contains any material
misrepresentation of fact.
Proposed law provides that a court may consider any of the following factors as evidence
that an assertion of patent infringement against an end-user was not made in bad faith: SB NO. 255
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
(1)The demand letter received by an end-user contains certain information.
(2)When the demand letter lacks certain information and the end-user requests the
information, the person provides the information within a reasonable period of time.
(3)The person engages in a good faith effort to establish that the end-user has infringed
or may be infringing the patent and to negotiate an appropriate remedy.
(4)The person makes a substantial investment in the use of the patent or in the
production or sale of a product, service, or technology covered by the patent.
(5)The person is either of the following:
(a)The inventor or joint inventor of the patent or, in the case of a patent filed by
and awarded to an assignee of the original inventor or joint inventor, the
original assignee.
(b)An institution of higher education or a technology transfer organization
owned by or affiliated with an institution of higher education.
(6)The person has demonstrated good faith business practices in previous efforts to
enforce the patent, or a substantially similar patent or has successfully enforced the
patent, or a substantially similar patent, through litigation.
(7)Any other factor the court finds relevant.
Proposed law provides that the attorney general has the sole authority to investigate and
pursue any violation of proposed law as an unfair or deceptive trade practice or act.
Proposed law provides that any person who is found liable shall be liable to the attorney
general 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 filed and heard in the same court as a civil
action filed under the provisions of proposed law.
Proposed law provides that the remedies and rights provided in law are in addition to and do
not preclude any right or remedy otherwise authorized by law.
Proposed law provides that any person outside the state asserting patent infringement by an
end-user in the state shall be deemed to be transacting business within the state and shall
thereby be subject to the jurisdiction of the courts of this state.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(Adds R.S. 51:1428)
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Commerce, Consumer
Protection, and International Affairs to the original bill
1. Removes the term "target".
2. Defines the term "end-user" as a consumer, whether an individual, business,
or financial institution, who purchases, rents, leases, or otherwise obtains a
product, service, or technology in the commercial market that is not for
resale and is, or later becomes, the subject of a patent infringement assertion. SB NO. 255
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words in boldface type and underscored are additions.
3. Provides that the attorney general shall have the sole authority to investigate
and pursue any violation of proposed law.
4. Provides that any person violating proposed law shall be liable to the attorney
general for all costs, expenses, and fees related to investigations and
proceedings associated with the violation, including attorney fees.
5. Provides for jurisdiction of state courts when the person asserting patent
infringements against an end-user is outside the state.