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April 23, 2014Client Alert

Governor Walker Signs Wisconsin Bill to Regulate Patent Notice Letters

Governor Walker signed WI Senate Bill 498 (SB 498) into law on April 23, 2014. Accordingly, the law is effective for all patent demand letters received by a Wisconsin individual or entity as of April 23, 2014. The law has been enacted as Act 339 of the Wisconsin statutes.

 

As reported in a previous alert, on March 20, 2014, the Wisconsin Assembly passed SB 498 aimed at regulating written communications attempting to enforce or assert patent rights against Wisconsin individuals and entities. Such letters are commonly referred to as patent notice letters or demand letters. SB 498 was introduced in an attempt to curb the tactics of so-called patent trolls or non-practicing entities. The bill’s requirements, however, apply equally to all patent owners seeking to enforce their patents with a few exceptions relating to institutions of higher learning, entities whose patents relate to devices subject to federal approval, federally-funded health care or research institutions with annual expenditures of at least $10 million, and entities attempting to assert rights related to drugs and biological products under 35 U.S.C. § 271(e) or 42 U.S.C. § 262.

 

Under the new law, a patent demand letter must include the patent number, a copy of the patent, the patent owner’s name and address, the asserted patent claims and accused products, detailed facts forming the basis for the infringement allegations, and an identification of any pending or completed court or administrative proceeding related to each asserted patent. Should a patent notice letter fail to comply with the law’s requirements, the recipient may notify the sender of any deficiencies. If the sender fails to cure the deficiencies within 30 days after notification by the recipient, the sender could face steep criminal and civil penalties. For instance, the law authorizes the Attorney General to commence an action for an injunction and to recover a forfeiture of up to $50,000 per violation. The law also allows the recipient of an improper patent notice letter or other aggrieved person to bring a private action for an injunction, damages, costs, fees, and punitive damages, totaling up to $50,000 per violation.

 

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