Small and medium size businesses often take advantage of the latest advancements in technology. Doing so, however, now seems to carry the risk of patent infringement. In 2012, so called patent trolls, also known as Non Practicing Entities, began sending letters to small and medium sized businesses demanding money in exchange for a license to use allegedly patented technology. Many saw the demands as an abuse of the patent system. In response, states have passed or are considering statutes that outlaw patent holders from delivering a bad faith notice of infringement. The State of Vermont was the first to address this issue. Vermont amended its consumer protection laws to outlaw “Bad faith assertions of patent infringement.” But how far can Vermont and other states go before being preempted by the federal government? This comment asks that very question. After analyzing the original intent of Congress, a theory of field preemption and the Constitutional right to petition the government, this comment concludes with the opinion that state-based laws meant to discourage Non Practicing Entities from sending bad faith cease and desist letters are preempted by the federal patent regime. Finally, this comment proposes that the best way to discourage Non Practicing Entities from harassing companies with frivolous law suits is to allow victorious defendants in patent infringement suits to collect damages from the losing plaintiffs.
Nick Vogel, Patently Preempted, 14 J. Marshall Rev. Intell. Prop. L. 268 (2015)