Texas Senate Bill SB1187

Texas 2015 - 84th Regular

Caption

Relating to claims of patent infringement; providing civil penalties; imposing fees.

Impact

The bill enables the Texas Attorney General to enforce these regulations by taking action against individuals or entities that violate the provisions. If a violation is found, the Attorney General can seek civil penalties that can go up to $50,000 for each violation, as well as order the reimbursement of legal, professional, and technical expenses incurred by the targets of such claims. This provides a legal recourse for businesses and individuals who may be targeted by aggressive patent assertion entities.

Summary

SB1187 introduces significant changes to the Texas Business & Commerce Code regarding claims of patent infringement. This legislation aims to regulate the process by which entities can claim patent infringement against Texas residents, particularly by addressing the practice of sending demand letters. Under the new provisions, individuals or companies are prohibited from sending demand letters that make bad faith claims of patent infringement. A 'bad faith' claim is defined as one that is objectively baseless, meaning no reasonable litigant could expect success on the merits.

Contention

Notably, SB1187 establishes a registration requirement for businesses that send a significant number of demand letters (ten or more within a year). These entities must register with the Secretary of State and disclose various pertinent details, including the names of their executive officers and any significant investors. This provision aims to create transparency but could raise concerns among businesses regarding the additional bureaucratic burden. Critics of the bill might argue that while it protects entities from frivolous claims, it could also stifle legitimate patent enforcement efforts.