Nortel told Google in 2010 it infringed the search patents Rockstar is now asserting against it

Almost four months have passed since the Rockstar Consortium's "Halloween lawsuits" against Google and seven Android device makers (six at this point, because Huawei has already settled) over former Nortel patents, and at this stage the focus is still on venue transfer motion practice. Google wants Rockstar's Android OEM cases as well as the search engine case (in which Google is the only defendant) moved out of Texas and over to California. It filed a declaratory judgment action in California shortly before Christmas over the patents asserted against Android OEMs (and against Google itself, actually, which was added as a defendant to the Samsung case) and a motion to transfer venue in the search engine case.

About two weeks ago Samsung brought a motion to dismiss Rockstar's lawsuit, claiming that one of the asserted patents is invalid and, which would have broader implications, that Rockstar subsidiary MobileStar Technologies lacked standing when the suit was filed (because a certain registration with the Texas Secretary of State occurred only a month later). HTC, LG, ASUSTeK and Pantech filed similar motions last week. Meanwhile, ZTE has done so, too, but in addition to the two issues raised by Samsung and the others, it also wants Rockstar's willfulness allegation with respect to the '551 patent tossed. And Google filed a motion consistent with Samsung's in the Rockstar v. Samsung and Google case.

In the search engine case, Rockstar responded last week to Google's motion to transfer that one to Northern California. What's far more interesting than all sorts of detail about factors weighing for or against one venue or the other is that Rockstar, in the context of where the relevant witnesses are based and how Texas-centric its patent licensing business has historically been, names two of its employees -- CEO John Veschi and Mark Hearn -- who met, while they were still employed by Nortel, with Google in 2010 to discuss licensing the patents-in-suit in the search engine case. In the same paragraph, the subjects of willfulness and Google's knowledge of the patents-in-suit come up.

Rockstar had alleged willful infringement in its original complaint against Google, but the complaint itself discussed only Google's failed bid for the Nortel patent portfolio in the willfulness context. The auction was held in 2011. Prior licensing talks weren't mentioned in the complaint.

A declaration attached to Rockstar's opposition to Google's transfer motion by the aforementioned Mark Hearn says the following about the 2010 meeting between Nortel and Google, which is very significant with respect to the allegation of willfulness:

"6. As part of my employment with Nortel, I personally attended a meeting with Google about the patents-in-suit in 2010. That meeting was also attended by Raj Krishnan and John Veschi, among others, who were all part of the intellectual property team at Nortel.

7. At the 2010 discussions with Google, Nortel employees presented claim charts to Google regarding the manner in which Google infringes the patents-in-suit directly and through third parties.

8. The patents-in-suit that had then issued were the only patents where Nortel presented claim charts to Google.

9. Many documents concerning patent monetization regarding the patents-in-suit, including communications with Google about the patents-in-suit and notifications of infringement, have resided in or near the Eastern District of Texas since the time of their creation in the Nortel era."

Google emphasizes an inequitable-conduct defense against those patents. If it proves those patents invalid or unenforceable, or if it at least convinces the court that there was no objective willfulness (because it would have had a reasonable basis for assuming invalidity or unenforceability or non-infringement), then there won't be any willfulness enhancements (up to triple damages) of a damages award. But if those types of defenses fail, Google will have to try to explain away the significance of the 2010 licensing discussions and the infringement claim charts presented to it at the time.

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Apple, Samsung confirm failure of settlement effort in early February but keep talking

In January, Apple and Samsung informed Judge Lucy Koh, the federal district judge presiding over two patent infringement cases between them in the Northern District of California, that they were going to have settlement talks, with the help of a mutually agreed-upon mediator and involving both companies' CEOs, no later than on February 19. The proposal was made because the court urged the parties to explore a settlement ahead of their next trial scheduled to begin on March 31 in San Jose.

Media reports from Korea recently indicated that the CEOs, accompanied by senior in-house counsel, had indeed held a meeting, but that an agreement was not reached. Late on Friday by California time, a joint report by Apple and Samsung's counsel to Judge Koh confirms that "[t]he parties [with their delegations headed by Apple CEO Tim Cook and Samsung CEO IT and Mobile Communications JK Shin] attended a full-day negotiation session with the mediator during the first week in February" and that they "did not reach an agreement at that session". But the report also confirms that the lines of communication haven't broken down: "Since that session, one or more of the foregoing party representatives has spoken with the mediator numerous times in order to progress the settlement efforts. For example, Apple representatives held telephonic conference calls with the mediator more than six times after the mediation. Samsung representatives held telephonic conference calls and other communications with the mediator more than four times after the mediation."

Apple and Samsung "remain willing to work through the mediator jointly selected by the parties". But it appears to me that they need more guidance from courts, in the U.S. and elsewhere, before this global dispute can end in a cross-license agreement involving the "anti-cloning" provision Apple apparently and understandably insists on. Guidance will have to come from the U.S. but probably needs to come from more than one country. For example, there should be a ruling in the foreseeable future on the parties' Australian litigation. Apple's offensive claims went to trial last year; Samsung's FRAND-related claims will be tried soon.

Here's Apple and Samsung's joint filing:

14-02-21 Apple-Samsung Joint Report Re. Status of Settlement Discussions by Florian Mueller

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Samsung to U.S. appeals court: Presidential veto not broad enough to protect Apple once more

Last week I asked: "Are U.S. and EU antitrust enforcers taking a rather soft line on standard-essential patent issues?" Based on a Samsung filing with the United States Court of Appeals for the Federal Circuit that entered the public record yesterday, I must answer this question with a resounding "Yes!" as far as the Antitrust Division of the United States Department of Justice (DoJ) is concerned. Basically, Samsung's filing makes clear that it seeks to benefit from reverse protectionism in which I believe the U.S. government is engaging for geopolitical reasons that have nothing to do with Apple, phones, tablets, or patents.

Only two weeks have passed since the DoJ announced the closing of its investigation of Samsung's use of FRAND-pledged standard-essential patents (SEPs) against Apple, arguing that "[a]s a result of the [Obama Administration's veto of an import ban Samsung won last year], the Antitrust Division has determined that no further action is required at this time". The fundamental importance of the underlying issue to industry would have been enough of a reason to penalize Samsung even for a failed attempt to win an import ban over a SEP. The European Commission has not closed the Samsung investigation yet even though Samsung also failed with its related attempts in multiple European countries. The U.S. government, however, apparently wanted to avoid the impression of dual punishment (veto plus antitrust decision).

Even on that basis, it was just totally premature to "close" the investigation (except for keeping the door open very slightly by promising to continue to monitor the situation) without remedies of any kind. If this was about SEPs as opposed to foreign policy, the DoJ would have expected at a very minimum that Samsung withdraw all of its still-pending requests for injunctive relief against Apple over U.S. SEPs. In December 2012, Samsung dropped its European SEP-based injunction requests against Apple in an effort to pave the way for a settlement with the European Commission and to avoid or minimize fines. It never did this in the U.S., so it would have been anything but unreasonable for the DoJ to close its investigation of Samsung only after similar withdrawals. Again, foreign policy is the only plausible explanation for why the DoJ did not demand this.

There were and still area two ongoing efforts by Samsung to win sales and import bans against Apple's standards-compliant products in the U.S. market:

1. At the trial that will begin in California in less than six weeks, Samsung is going to be asserting two SEPs (as well as a couple of acquired non-SEPs against Apple. Samsung's April 2012 prayers for relief concerning its counterclaims included and still include a request for injunctive relief:

   "That Apple and its officers, agents, servants, employees, and all those persons acting or attempting to act in active concert or in participation with them or acting on their behalf be immediately, preliminarily and permanently enjoined from further infringement of Samsung's Patents In Suit;"

   Prior to the DoJ's closing of the investigation, Samsung should have withdrawn that request -- which is exactly the kind of request it dropped Europe-wide -- with respect to the two SEPs it's taking to trial (for the non-SEPs it's obviously free to pursue such relief).

2. On November 1, 2013, the public redacted version of Samsung's appeal of the unfavorable parts of the ITC ruling on its complaint against Apple became available. The veto was not appealable, but the ITC had sided with Apple on one more SEP and a couple of non-SEPs. It turned out that Samsung is pursuing on appeal only one patent: a FRAND-pledged SEP. In my commentary I thought Samsung primarily did this with a view to a damages claim in federal court (in Delaware, where its mirror lawsuit of the ITC complaint was filed) and possible FRAND determinations in which it would want to argue that the patent is still alive. I said it would "be a long shot to win an import ban (on the remand it seeks) in light of the last veto (though not 100% impossible if the FRAND-related facts changed in the meantime, such as new offers made in negotiation that might warrant a new public interest analysis down the road, most likely in 2015)".

   In its recent answer brief to Samsung's appeal, Apple raised FRAND issues and argued that, in light of the last veto, Samsung's appeal should be tossed because Samsung won't be able to win the only type of remedy the ITC can order. The ITC itself merely defended its non-liability finding. I saw those briefs a few weeks ago but decided to wait until Samsung's reply brief before blogging about them. I wanted to see what position Samsung takes on Apple's FRAND arguments, and that's what the remainder of this blog post is about. Samsung is indeed arguing the way I suspected it would (i.e., that it can win an import ban on remand, should the appeal succeed on liability), and this shows that the DoJ should never have closed the investigation without Samsung withdrawing that Federal Circuit appeal or at least clarifying that the purpose of the appeal was just to get the non-liability holding reversed, with a view to damages and royalty determinations (though this might have supported certain mootness arguments by Apple).

Here's the import ban-related part of the public redacted version of Samsung's filing:

"G. An Exclusion Order Is the Proper Remedy for Apple's Failure to License the '644 Patent

The Commission properly rejected Apple’s claims that Samsung's commitment to standards-setting organizations precluded an exclusionary remedy for the '644 Patent. As the Commission noted, Apple identified no per se rule barring the ITC from issuing an exclusion order on a FRAND-encumbered patent. [...] In particular, the Commission noted that ETSI's IPR policy does not prohibit patent owners from seeking injunctive relief, and that several attempts to add such language have failed. [...] Although Samsung does not dispute that exclusionary relief ought to be a last resort when declared essential patents are asserted, it cannot be the case that an accused infringer can avoid the ITC's statutory mandate by simply raising FRAND concerns while refusing to 'engage in an impartial and honest Essential IPR licensing negotiation process,' as ETSI expects of its members. [...] As described below, that is exactly what the Commission concluded Apple did here.

Apple's citation to opinions from other courts denying injunctions on FRAND-encumbered patents have no bearing on the Commission' s determination. Such cases are not binding on this Court or the Commission and largely relate to different standards-setting organizations with different rules, policies, and objectives, such as ITU, IEEE, and JEDEC. No statute or other precedent requires the lTC to deny an exclusion order simply because monetary remedies would be adequate before a district court. [...]

To the extent the '644 Patent is subject to a FRAND licensing commitment, the Commission also correctly determined that Apple had failed to show that Samsung did not satisfy that obligation. [...] Over the course of three years, beginning before the underlying Investigation was commenced, Samsung sought in good faith to license its UMTS patents, including the '644 Patent, to Apple on FRAND terms and conditions. [...] Apple rejected every offer and never made any serious counter-offer. [...] Although Apple's brief refers only to certain unilateral license offers proposing [[REDACTED]], Apple conspicuously fails to mention Samsung's December 2012 proposal for [[REDACTED]] Apple's rejection of license terms that it previously suggested were FRAND, combined with its refusal to make a counteroffer or otherwise reasonably engage in further licensing negotiations, confirms that Apple is not negotiating in good faith, and does not intend to license Samsung's patents unless compelled to do so. [...] It was this inexplicable unwillingness to license on any terms that prompted the Commission to characterize Apple's approach as 'reverse patent holdup' in which 'an implementer utilizes declared-essential technology without compensation to the patent owner under the guise that the patent owner's offers to license were not fair or reasonable.' [...] Even Apple's cases agree that exclusionary relief is appropriate in these circumstances. See Apple, Inc. v. Motorola, Inc., 869 F. Supp. 2d 901, 914 (N.D. Ill. 2012).

Unable to demonstrate that Samsung is not entitled to exclusionary relief as a matter of law, Apple contends that a remand with respect to the '644 Patent would be futile because the USTR would likely veto an exclusion order if granted, as it did for Samsung's '348 Patent. As an initial matter, Apple cannot ask this Court to usurp the function of the executive to conduct policy evaluations of Commission determinations by denying relief that is otherwise appropriate under the ITC's statutory mandate and this Court's precedent. Moreover, Apple overstates the USTR's position with respect to the '348 Patent.

The USTR did not conclude that exclusion orders are never appropriate for declared essential patents; rather, the USTR stated that 'whether public interest considerations counsel against a particular exclusion order depends on the specific circumstances at issue,' such as the infringer’s refusal to take a FRAND license. [...] (emphasis added). The USTR's disapproval of the '348 Patent exclusion order was based on the lack of 'a comprehensive factual record' and 'explicit findings' regarding issues such as 'the presence or absence of patent hold-up or reverse hold-up.' [...] Any deficiencies in the record or the Commission's findings can be easily addressed on remand, allowing the USTR to confirm that standards-related concerns have been adequately considered, and that any issued exclusion order will not implicate public policy concerns."

I agree with Samsung -- as I already did in my commentary on its opening appellate brief -- that the USTR veto was not broad enough to make it 100% impossible for Samsung to win an import ban on a potential remand. I also agree with Samsung that Apple's brief somewhat overstated the scope of the USTR veto. But on that basis, I can't agree with the DoJ's decision to "close" the investigation. The issue was not and is not moot.

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Gave keynote at settlement party of HTC and Nokia's German lawyers, patent attorneys

It's a well-known fact that (good) lawyers treat each other as colleagues, not adversaries, despite their best efforts to defend their clients' interests vigorously. The relationship between Nokia and HTC's German outside patent litigators and patent attorneys stands out nonetheless. After roughly six years of jointly defending against patent licensing firm IPCom, they are on unusually friendly terms, and this did not change in the slightest as a result of the dispute between Nokia and HTC that lasted almost two years (April 2012 - February 2014) and had its center of gravity, in terms of the number of asserted patents and decisions handed down, in Germany.

This evening, approximately 30 of the 50 attorneys-at-law and patent attorneys involved with the German part of the Nokia-HTC dispute gathered for a drink in a spacious conference room in the Dusseldorf office of Hogan Lovells, at the invitation of HTC's lead outside attorney in Germany, Dr. Martin Chakraborty. I had the pleasure and the honor of making a surprise appearance as a keynote speaker. Dr. Chakraborty had this idea, I accepted the invitation, and we had not told anyone about it beforehand.

Since I had attended most of the German hearings and trials in this dispute over these past two years, I was uniquely positioned to provide an anecdotal recap and share certain observations on the occasion of this unusual celebration. I did this for two reasons. One, I have the greatest respect for both camps' legal work. In absolute numbers, this dispute produced various records with respect to the smartphone IP matters I monitor and even beyond. Offensively and defensively. It was a clash of Titans. Two -- and this was no less important to me personally --, I know that HTC and its lawyers found themselves in disagreement with my commentary more frequently than Nokia did, but I do respect both companies (over the years I've taken increasingly favorable positions on HTC's approach to patent litigation) and appreciated this opportunity to show it.

Now that the dust has settled and a deal has been struck, I sincerely hope that the deal terms (which are entirely unknown to me) will help both parties as they pursue their (now-divergent) business models. They face challenges without a doubt, but they also have opportunities.

It was the first invitation to give a speech outside the Munich area that I accepted in almost three years. (By the way, I have no compensation for my time to disclose in this context.)

In my (relatively short) address I mentioned that one of the intriguing aspects of this spat was the diversity of the patents-in-suit: pretty much everything patentable in the mobile devices industry from A as in "antenna" to U as in "USB" -- only to be reminded that V as in "VP8" (Google's video codec) had also been at issue.

For the sake of a complete record of who was involved with this massive effort I'm now going to list both parties' law firms in alphabetical order (firstly Nokia's since this was also the party that started it).

Nokia's law firms:

• Bird & Bird

• Cohausz & Florack

• Reimann Osterrieth Koehler Haft

• Samson & Partner

HTC's (including S3 Graphics') law firms:

• Braun-Dullaeus Pannen

• Hogan Lovells

• Hoessle

• Maikowski & Ninnemann

• Mueller Hoffmann & Partner

• Preu Bohlig & Partner

• Wildanger Kehrwald Graf v. Schwerin & Partner

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Liberty Media's TruePosition acquires Skyhook, touts its patents: implications for Google lawsuit?

Skyhook Wireless, a company that has been suing Google for more than three years over various location-positioning patents, with a trial likely to take place (finally) this year, has just been acquired by Liberty Media's TruePosition subsidiary. The official announcement says that "Skyhook's technology provides TruePosition with another important tool in [its] technology and patent portfolio that perfectly complements [its] existing offerings" (emphasis added).

As Re/code mentions in its report on the deal, the [Skyhook-Google] court battles have revealed all sorts of interesting information about the control Google has exerted over the Android ecosystem". Google's heavy-handedness concerning Android drew a lot of additional attention last week after Google's mobile app distribution agreements with Samsung and HTC were published. Also last week, Galen Gruman wrote on Infoworld: "Meet AOSP, the other [i.e., open-source] Android, while you still can", going on to explain how an increasing part of the Android codebase is closed and the open-source components are nearing the point at which they won't represent a competitive mobile operating system.

It's too early to tell what effect Liberty Media's acquisition of Skyhook Wireless will have on the pending Google patent litigation. If the case does go to trial this year, Google will face a well-heeled opponent that can afford even more protracted litigation and (even international, if necessary) escalation. But the "If" is the question. While it would make sense for Liberty Media to aggressively enforce Skyhook's IP (which was apparently the reason for the deal) in order to monetize what it has acquired, it's also possible that Skyhook's new owners will be more willing to settle the matter with Google. But even if Liberty Media is prepared to settle, Google is not known to be exceedingly willing to pay patent royalties, so the case may have to go to trial anyway. It wouldn't be logical for Liberty Media to acquire IP and tout it in a press release only to dismiss a case without getting royalties. In doing so it would devalue Skyhook's patent portfolio and call into question the rationale for the transaction. So I think there still is a fairly high probability of the case going to trial.

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HTC, LG, ASUSTeK, Pantech join Samsung in moving for dismissal of Rockstar Android lawsuits

A week ago I reported and commented on Samsung's motion to dismiss the patent infringement lawsuit brought against it by the Rockstar Consortium and its MobileStar Technologies subsidiary in the Eastern District of Texas. The next day ASUSTeK brought a motion raising the same issues (alleged invalidity of one patent and, which has potentially broader implications, lack of standing at the time the lawsuit was filed). Yesterday HTC, LG and Pantech followed suit. Technically, due to the AIA's joinder rule, each defendant faces a different Rockstar lawsuit, though the issues are near-identical, except that the case Rockstar brought against Google itself (apart from the fact that Google was later added as a co-defendant to the Samsung case) is about search engine patents.

Of the seven Android device makers sued on Halloween, one (Huawei) has settled, five (firstly Samsung, then ASUSTeK, HTC, LG, Pantech) have brought motions to dismiss, and one (ZTE) has yet to respond. Presumably ZTE will also move for dismissal, unless it settles before.

What we're seeing here is just the overture in the form of a venue fight. Google filed a declaratory judgment action in the Northern District of California shortly before Christmas. Google's partners are meanwhile trying to get the Texas cases dismissed, which would make the California action the first-filed case. At the same time, Rockstar is trying to win the dismissal of the California lawsuit, arguing that there's no point in litigation in two districts "when a single suit in Texas, combined with six existing suits in Texas, can fully safeguard Google's interest".

In each case in which a motion to dismiss should fail, we're going to see a motion to transfer venue. In its reply brief in California, Rockstar has already described a transfer motion as "the predictable next step should this [California] case survive a motion to dismiss", and Rockstar and MobileStar "of course, reserve the right to file such a motion, if necessary, at an appropriate time".

From what I heard (from a major industry player who is neither a client of mine nor a party to Rockstar's Google/Android-related cases), Judge Rodney Gilstrap, who is presiding over the Rockstar-Android cases in Texas, is notoriously unwilling to transfer cases out of his court to other districts, but some defendants have apparently won such transfers through petitions for writ of mandamus filed with the Federal Circuit. We may very well see one or more mandamus petitions in this context as well. I believe these defendants won't leave a stone unturned in their attempts to move the matter out of Texas.

While all of this delays resolution of the actual infringement issues, even the procedural maneuvering that is going on at this stage does involve some arguments touching on the substance of these cases. In last week's reply brief by Rockstar in California I found the following passage particularly interesting:

"C. Google Is Incorrect That Rockstar's Claims Concern Only Android

Throughout its opposition, Google argues that the asserted patents in this action and the Texas litigation concern solely the Android operating system. [...] This is misleading and mistaken. Rockstar and MobileStar are accusing various mobile devices that, while including the Android operating system, also include hardware and software components that infringe Rockstar and MobileStar patents, not the Android operating system alone. [...] For example, at least one patent (U.S. Patent No. 5,838,551) asserted against these mobile devices in the Texas actions has nothing to do with their operating system, but is directed solely to a type of component contained in those devices.

For this reason, Google is mistaken in invoking the customer-suit exception to the first-to-file rule. That exception applies only 'where the first suit is filed against a customer who is simply a reseller of the accused goods, while the second suit is a declaratory action brought by the manufacturer of the accused goods.' [...] Here, the Texas defendants are not resellers of devices or Android operating systems obtained from Google, but rather design, manufacture, and sell the devices themselves (which use the Android operating system). [...] This is hardly the situation of a patentee taking advantage of a customer who unknowingly purchased an infringing product from a manufacturer.

In any event, Google cannot have it both ways. If Google wishes to paint the Texas litigation as a direct assault on Google itself, then Google cannot plausibly hold out this suit as the 'first-filed' case. It is undoubtedly the second-filed case under any logical view of the substance of each suit."

The '551 patent covers an "electronic package carrying an electronic component and assembly of mother board and electronic package", which is obviously Android-unrelated. I'm still going to refer, for the sake of brevity, to these cases as the "Rockstar Android lawsuits" because all defendants have in common that they make Android-based devices and because most of the asserted patents are allegedly infringed by Android itself. When I say "Rockstar Android lawsuits", I mean "Rockstar's lawsuits against six (originally seven) Android OEMs". But for the legal question of whether a dismissal or transfer is warranted, the distinction must be made, and I do agree with Rockstar that Android device makers -- rather large and sophisticated companies, by the way -- can't be compared to the targets of typical customer suits such as hotels or restaurants offering WiFi access.

The potential scope and usefulness of a customer suit exception is also a hotly contested issue in the ongoing U.S. patent reform debate.

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Kentucky Senate committee approves balanced approach to demand letters by patent trolls

In early November 2013, the Subcommittee on Consumer Protection, Product Safety, and Insurance (part of the Committee on Commerce, Science, and Transportation) of the United States Senate held a hearing on possible measures against deceptive demand letters by patent trolls. It remains to be seen what will ultimately come out of this effort at the federal level, but a state legislature is at the forefront of this issue. On Thursday, the Judiciary Committee of the Kentucky Senate voted unanimously in favor of a bill (SB116) that seeks "to establish a bad-faith assertion of patent infringement as a violation of Kentucky's consumer protection chapter and authorize the utilization of the remedies available for those violations in addition to private remedies established in the bill".

The bill was introduced by Republican State Senators Christian McDaniel and Whitney Westerfield (personal website, website of his law office). Whitney is the chairman of this committee and a reader of this blog (in general, not only in with respect to patent policy). He kindly informed me of these developments via Twitter.

This is the most comprehensive effort I've seen so far to lay out factors weighing for and against allegations of bad-faith patent assertions. Clearly, a lot of thought has gone into the design of a bill (Word document) that aims to make a distinction between good-faith and bad-faith patent licensing activities. It's similar to a bill enacted by the Vermont Legislature last year.

The bill mentions that the state Attorney General is not meant to be restricted by this bill in any way, but the bill itself focuses on a defendant's right in bad-faith litigation or litigation following bad-faith demand letters. Paragraph 3 ensures that defendants have a basis for demanding a bond at any stage of the proceedings ("[u]pon motion by a target and a finding by the court that a target has established a reasonable likelihood that a person has made a bad-faith assertion of patent infringement").

These factors may be considered as evidence of a bad-faith assertion:

• A demand letter fails to state the patent number, the name and address of the patent owner(s)/assignee(s), or specific factual allegations relating to the infringement claim.

• A patent holder fails to conduct a reasonably specific infringement analysis prior to sending a demand letter.

• Information reasonably requested by the taret of a royalty demand is not provided within a reasonable period of time.

• The roaylty demand is not based on a reasonable valuation.

• The claim is meritless and the patent holder knew or should have known this.

• The claim or assertion is "deceptive" (not defined).

• Previous behavior and litigation can affect subsequent actions (for example, earlier demand letters that failed to satisfy the criteria laid out in the bill).

• The patent holder is a non-practicing entity.

• Any other factor the court finds relevant.

And these factors can support a patent holder's claim that an assertion was not made in bad faith:

• The demand letter contains the information the bill requires.

• If the original demand letter did not contain it, the patent holder may still be able to cure the defect by providing the information, on request, within reasonable period of time.

• The patentee "engages in a good-faith effort to establish that the target has infringed the patent and to negotiate an appropriate remedy".

• Substantial investment in use of patent or in production or sale of product or item covered by it.

• The anti-NPE assumption is counterbalanced by assumptions in favor of patent holders or original assignees who enforce a patent themselves, and institutions of higher education and any technology transfer entities they own.

• Previous behavior can be helpful to a patentee if he previously demonstrated good-faith business practices in enforcement of the same patent or a substantially similar one, or successfully enforced the patent or a substantially similar patent through litigation.

• Any other factor the court finds relevant.

Patent law is part of federal law, and I don't want to get into a discussion here of ways in which state laws can indeed have a bearing on patent infringement litigation. I just wanted to draw additional attention to this truly interesting effort, and I hope that something will be done at the federal level -- and at some point over here in Europe as well -- against bad-faith demand letters. The Kentucky bill is definitely a valuable and constructive contribution to the debate. Should it have a statistically identifiable effect after being passed into law (which I hope) in terms of discouraging assertions against Kentuckians, then I'm sure other legislatures will consider similar measures. Ideally the pressing problem of bad-faith demand letters would be addressed by others even before.

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