Attorney General George Jepsen has joined with 41 other state and territorial attorneys general in expressing support to the leadership of the Senate Judiciary and Commerce Committees for patent reform legislation. Already passed in the House, this year’s legislation is aimed at reducing the abuse of Patent Assertion Entities (PAEs), also known as “patent trolls.”

In a letter addressed to the leadership of the Senate Judiciary Committee and Commerce Committee, the states express their support for proposed legislation but also advocate for language that acknowledges the authority of states to fight patent trolls pursuant to their consumer protection laws.

Patent Trolls are a growing consumer protection problem in the United States. Patent trolls acquire patents solely for the purpose of using them as means to obtain financial gains from entities they claim to have infringed on the patent. Through the issuance of demand letters to their targets – often consumers, nonprofits and small businesses that have little, if anything, to do with the patent – patent trolls demand license fees or settlements under threat of litigation unless the target complies with their demands for payment.

“Patent trolls don’t acquire patents for the purpose of developing a technology or product,” said Attorney General Jepsen. “They buy patents with the sole objective of using them to make money from claims of patent infringement. Many of these claims are dubious, at best.  In Connecticut, we’ve seen complaints from small business owners and nonprofit directors, and community banks that may have done nothing wrong and yet find themselves facing high pressure tactics and potentially expensive patent litigation if they don’t pay up.”

The states have played a significant role in raising awareness of the problem of patent trolls.  That has led to Congress to focus their attention on this abusive patent practice. In December of last year, the House passed the Innovation Act, H.R. 3309. Currently, S. 1720 is being considered in the Senate Judiciary Committee. The bill promotes further transparency in patent ownership and works to make reforms in patent litigation.

“Congress and the federal government have shown an interest and made progress in addressing the gross misuse of the current patent system,” said Attorney General Jepsen. “The Senate’s proposal is a positive step that should assist in the efforts on both the state and federal levels to combat this problem.”

The attorneys general, while supportive, encourage Congress to consider adding several amendments to their bill. In addition to recommending that Congress confirm state enforcement authority, the states urge disclosure requirements for patentees that send demand letters and confirmation that state courts will have personal jurisdiction over entities that direct unfair or deceptive patent demand letters into states.

Assistant Attorneys General Jose Rene Martinez; Jonathan Blake; Patrick Ring; Phillip Rosario, head of the Consumer Protection Department; and Matthew Budzik, head of the Finance Department, are assisting the Attorney General with this matter.

Please click here to view the attorneys general’s letter.

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