A little less conversation, a little more action, please: [1] Blackberry Fallout Part 3

After the 2006 Blackberry settlement many states implemented laws referred to as anti-patent statutes.[2] States ostensibly enacted these statutes to curb patent owning companies which aggressively distributed bad faith patent infringement assertion letters to other businesses.  Although this intimidation did not occur in Blackberry[3], some contended that companies who did not ‘practice’ their patents would use patents to other businesses’ disadvantage.  Unfortunately, legitimate businesses have been entrapped by anti-patent statutes which implement liability for bad faith patent infringement assertion letters.

At least in federal courts, it appears there is no decision in which a truly predatory company was held accountable under an anti-patent statute.[4] In Summer Infant (USA) Inc. v.  Tomy International,

Inc.,[5] single alleged infringer Summer Infant contended that Tomy sent a bad faith patent infringement assertion letter under the state anti-patent statute. The court dismissed Summer Infant’s complaint with prejudice, where (i) Tomy sent a single cease and desist patent infringement letter to a single company, i.e.   Summer Infant, and (ii) none of threshold statutory criteria for liability under the anti-patent statute were present. Similarly, in Shoflo, LLC v. TSA Services, LLC[6], the single alleged infringer Shoflo counterclaimed under the state anti-patent statute that there was insufficient information in the patent infringement assertion letter. However, the district court concluded that there was sufficient information because the defendant and plaintiff had previously negotiated about the same patents. The court then dismissed the counterclaim with prejudice after holding that in any event the substantive content of a patent infringement assertion letter was pre-empted by federal patent law.

In another instance Prolacta Bioscience, Inc. sent a patent infringement assertion letter to single company Ni-Q, LLC and thereafter commenced a patent infringement lawsuit.[7] Ni-Q counterclaimed under Oregon’s anti-patent statute by alleging that Prolacta’s lawsuit was objectively baseless, because Prolacta knew this patent was invalid.  The court then denied summary judgment to Prolacta for an injunction and damages. In another case the court denied a bond to the single alleged infringer[8] after balancing the factors in the anti- patent statute.  In another bond request by a single alleged infringer under an anti-patent statute the court denied the motion because the patent owner’s complaint did not appear objectively baseless. [9]

These cases do not illustrate the alleged but widely publicized predatory behavior by which a patent owner distributes phony infringement assertion letters to hundreds of businesses.  Instead, these cases involved businesses who sent traditional cease and desist letters to corresponding single competitors.  Clearly the anti-patent statutes are overbroad and action is required to either repeal them or tailor them so legitimate businesses are not disadvantaged.

[1] Recorded by Elvis Presley

[2] Representative state anti-patent statutes include: O.C.G.A. section 10-1-771 and R. I. Section 6-41.1-3.

[3]  NTP, Inc. v. Research in Motion, 418 F.3d 1283(Fed. Cir. 2005) cert denied 546 U.S. 1157(2006).

[4] See Vermont v. MPHJ Technology Investments, LLC, 803 F.3d 635 (Fed. Cir. 2015).

[5] 2020 U.S.P.Q2d (BNA) 10879 (D.R.I. August 3, 2020).

[6] 2017 U.S. District Lexis 224864 (M.D. Fla. July 12, 2017).

[7] Ni-Q, LLC v. Prolacta Bioscience, Inc., 129 U.S.P.Q.2d (BNA) 1422 (D. Oregon February 14, 2019).Prolacta  also used its patent to commercially produce human milk formula.

[8] Farmer v. Alpha Technologies, 2015 U.S. Dist. Lexis 196079 (N. D. Ga.  November 18, 2015).

[9] Ice Castles, LLC v. LaBelle Lake Ice Palace LLC et al., 2021 U.S. Dist. Lexis 137239 (D. Idaho July 21, 2021).


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