Cheeseheads Enter the Fray: Wisconsin Latest to Pass Anti-Troll Legislation

Wisconsin is the latest state to entertain legislation aimed at curbing patent troll activity within its state.  Last week, the State Assembly passed Senate Bill 498, as amended, which requires certain disclosures to be made in an initial demand letter alleging patent infringement. In addition to the information routinely supplied, patent owners will now have to identify not one claim, but all claims that they assert are being infringed. More telling, patent owners will have to detail how each claim is met by the accused technology.  As an added bonus, they will also have to include all court proceedings (past and present) involving the patent. This could provide useful information as to how other similarly situated parties defended against similar infringement claims. Wisconsin is essentially mandating a patent claim chart showing infringement for any accused technology. Many trolls, who are serious about enforcement, already provide such information to accused infringers. So, while it may cut down on the issuance of shotgun cease and desist letters, it should not have a real impact on the more sophisticated trolls. Both the state attorney general’s office and aggrieved parties may bring claims for violations of the law.  The state can seek penalties of up to $50,000 per violation. Private claimants can seek reasonable attorneys’ fees and costs and an award of punitive damages not to exceed $50,000 for each violation or three times the aggregate amount of actual damages and costs and attorneys’ fees awarded by a Court, whichever is greater Violations are based on “false, misleading or deceptive information” in the demand letter or if the required disclosures are not made within 30 days after the recipient notifies the enforcing party that the disclosures were incomplete.  Importantly, no enforcement actions or private remedies may be sought solely based on an initially incomplete demand letter. Certain types of demand letters are exempt from the law- those sent by an institution of higher education and those involving patents subject to approval by the U.S. Food and Drug Administration. Determining what is “false, misleading or deceptive information” in this context seems to be a formidable task for state courts to entertain, especially since many of them do not routinely handle patent matters. Such cases are usually litigated in federal court.  The stiff $50,000 per violation price tag and/or the threat of having a state investigation, however, may deter those from sending completely baseless demand letters.