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The Vermont Statutes Online



Title

09

:
Commerce and Trade






Chapter

120

:
BAD FAITH ASSERTIONS OF PATENT INFRINGEMENT











 

§

4195. Legislative findings and statement of purpose

(a) The General

Assembly finds that:

(1) Vermont is

striving to build an entrepreneurial and knowledge-based economy. Attracting

and nurturing small- and medium-size Internet technology ("IT") and other

knowledge-based companies is an important part of this effort and will be

beneficial to Vermont's future.

(2) Patents are

essential to encouraging innovation, especially in the IT and knowledge-based

fields. The protections afforded by the federal patent system create an

incentive to invest in research and innovation, which spurs economic growth.

Patent holders have every right to enforce their patents when they are

infringed, and patent enforcement litigation is necessary to protect

intellectual property.

(3) The General

Assembly does not wish to interfere with the good faith enforcement of patents

or good faith patent litigation. The General Assembly also recognizes that

Vermont is preempted from passing any law that conflicts with federal patent

law.

(4) Patent

litigation can be technical, complex, and expensive. The expense of patent

litigation, which may cost hundreds of thousands of dollars or more, can be a

significant burden on small- and medium-size companies. Vermont wishes to help

its businesses avoid these costs by encouraging the most efficient resolution

of patent infringement claims without conflicting with federal law.

(5) In order for

Vermont companies to be able to respond promptly and efficiently to patent

infringement assertions against them, it is necessary that they receive

specific information regarding how their product, service, or technology may

have infringed the patent at issue. Receiving such information at an early

stage will facilitate the resolution of claims and lessen the burden of

potential litigation on Vermont companies.

(6) Abusive

patent litigation, and especially the assertion of bad faith infringement

claims, can harm Vermont companies. A business that receives a letter asserting

such claims faces the threat of expensive and protracted litigation and may

feel that it has no choice but to settle and to pay a licensing fee, even if

the claim is meritless. This is especially so for small- and medium-size

companies and nonprofits that lack the resources to investigate and defend

themselves against infringement claims.

(7) Not only do

bad faith patent infringement claims impose a significant burden on individual

Vermont businesses, they also undermine Vermont's efforts to attract and

nurture small- and medium-size IT and other knowledge-based companies. Funds

used to avoid the threat of bad faith litigation are no longer available to

invest, produce new products, expand, or hire new workers, thereby harming

Vermont's economy.

(b) Through this

narrowly focused act, the General Assembly seeks to facilitate the efficient

and prompt resolution of patent infringement claims, protect Vermont businesses

from abusive and bad faith assertions of patent infringement, and build

Vermont's economy, while at the same time respecting federal law and being

careful to not interfere with legitimate patent enforcement actions. (Added

2013, No. 44, § 6; 2013, No. 47, § 2, eff. May 24, 2013.)