Patent Troll Law Goes Into Effect in Georgia
Monday, July 28th, 2014
A Georgia law aimed at combating so-called “patent trolls” went into effect earlier this month.
House Bill 809, which was signed by Gov. Nathan Deal in April, became effective July 1.
The new law defines and prohibits those patent assertion entities or non-practicing entities that purchase groups of patents without an intent to market or develop a product and then target other businesses with lawsuits. It is modeled off legislation passed in Vermont last year.
In particular, the Georgia law provides remedies for those targeted by demand letters — communications sent by patent trolls in an attempt to enforce or assert rights in connection with a patent or a pending patent — containing bad-faith assertions of patent infringement.
Under the new statute, certain, specific information must be contained in those letters, including “factual allegations concerning the specific areas in which the target’s products, services and technology infringe the patent or are covered by the claims in the patent.”
The new law also requires the PAE or NPE to conduct a study comparing the claims in the patent to the target’s products, services and/or technology.
If a court finds that a target has established a “reasonable likelihood” that a bad-faith assertion has been made, then it must require the letter’s author to post a bond in an amount equal to the target’s estimated expenses of litigation.
The bond amount cannot exceed $250,000, and may be waived under certain circumstances.
A violation of the new law is considered “an unfair and deceptive act or practice in the conduct of consumer transactions” under Georgia’s Fair Business Practices Act, and the statute provides for a private right of action.
Available relief under the law includes restitution, punitive damages in an amount of $50,000 or three times the combined total of damages, costs and fees, whichever is greater; expenses of litigation, including reasonable attorneys’ fees; and any other relief that a court deems just.
State Rep. Bruce Williamson, R-Monroe, was one of the new law’s sponsors.
A businessman himself, Williamson said the legislation was “extremely important” to him.
“I am glad to see that others see the value in passing this pro-business measure to protect Georgia jobs,” said Williamson, who owns and manages an insurance agency and investment company and is a co-founder of both the Walton Bank and Trust Company and Liberty First Bank of Monroe.
The state Chamber of Commerce applauded the new law.
“The Georgia Chamber appreciates the General Assembly and Gov. Deal’s work to enact H.B. 809 and give targeted companies a new tool to fight back against these malicious practices,” Chamber President and CEO Chris Clark said.
“By creating a definition for bad faith assertions of patent infringement and prohibiting its practice, this legislation protects innovation in Georgia — one of the most important pieces of our state’s future economic success.”