Virginia Code 59.1-215.2: Bad faith assertions of patent infringement
A. A person shall not make, in bad faith, an assertion of patent infringement.
Terms Used In Virginia Code 59.1-215.2
- Assertion of patent infringement: means (i) sending or delivering a demand letter to a target; (ii) threatening a target with litigation asserting, alleging, or claiming that the target has engaged in patent infringement; (iii) sending or delivering a demand letter to the customers of a target; or (iv) otherwise making claims or allegations, other than those made in litigation against a target, that a target has engaged in patent infringement or that a target should obtain a license to a patent in order to avoid litigation. See Virginia Code 59.1-215.1
- Demand letter: means a letter, email, or other communication asserting, alleging, or claiming that the target has engaged in patent infringement, or that a target should obtain a license to a patent in order to avoid litigation, or any similar assertion. See Virginia Code 59.1-215.1
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
- Patent infringement: means any conduct that constitutes infringement pursuant to applicable law, including 35 U. See Virginia Code 59.1-215.1
- Person: includes any individual, corporation, partnership, association, cooperative, limited liability company, trust, joint venture, government, political subdivision, or any other legal or commercial entity and any successor, representative, agent, agency, or instrumentality thereof. See Virginia Code 1-230
- Target: means a person residing in, conducting substantial business in, or having its principal place of business in the Commonwealth and with respect to whom an assertion of patent infringement is made. See Virginia Code 59.1-215.1
B. The following shall constitute indicia that a person’s assertion of patent infringement was made in bad faith:
1. The demand letter does not contain:
a. The number of the patent that is asserted, alleged, or claimed to have been infringed; or
b. The name and address of the patent’s owner or owners and assignee or assignees, if any.
2. The person sends a demand letter to a target without first making a reasonable effort under the circumstances to conduct an analysis comparing the claims in the patent to the target’s products, services, and technology, or to identify specific areas in which the products, services, or technology are covered by the claims in the patent.
3. The demand letter does not identify specific areas in which the products, services, and technology are covered by the claims in the patent.
4. The person offers to license the patent for an amount that is not based on a reasonable estimation of the value of a license to the patent.
5. The person making an assertion of patent infringement acts in subjective bad faith, or a reasonable actor in the person’s position would know or reasonably should know that such assertion is baseless.
6. The assertion of patent infringement is deceptive, or the person threatens legal action that cannot legally be taken or that is not intended to be taken.
7. The person or its subsidiaries or affiliates have previously filed or threatened to file one or more lawsuits based on the same or similar assertion of patent infringement, the person attempted to enforce the assertion of patent infringement in litigation, and a court found the assertion to be objectively baseless or imposed sanctions for the assertion.
8. The patent alleged to be infringed was not in force at the time the allegedly infringing conduct occurred, or the patent claims alleged to be infringed have previously been held to be invalid.
C. The following shall constitute indicia that a person’s assertion of patent infringement was not made in bad faith, but the absence of such indicia shall not constitute evidence of bad faith:
1. The person engages in a reasonable effort under the circumstances to establish that the target has infringed the patent and to negotiate an appropriate remedy.
2. The person makes a substantial investment in the use of the patent or in the development, production, or sale of a product or item covered by the patent.
3. The person has:
a. Demonstrated good faith in previous efforts to enforce the patent or a substantially similar patent; or
b. Successfully enforced the patent, or a substantially similar patent, through litigation.
4. The person is an institution of higher education or a technology transfer office organization owned by or affiliated with an institution of higher education.
D. The lists of indicia in this section are non-exclusive, and all indicia need not be present for a finding of bad faith or good faith.