The Rhode Island State Senate passed legislation that prohibits so-called "patent trolls" in Rhode Island. The legislation (S0596), filed on behalf of Attorney General Peter F. Kilmartin by Senate Minority Leader Dennis Algiere (R, District 38 – Westerly, Charlestown, South Kingstown), would prohibit a person from making bad faith assertions of patent infringement against a Rhode Island business or individual. The law would also allow a business or individual to bring action in Rhode Island Superior Court against the patent troll, where they may be awarded equitable relief, actual damages, costs, attorney's fees and exemplary damages.
The law also gives the Office of Attorney General civil investigative powers, including the ability to bring civil actions against patent trolls; if found to have made a bad faith assertion, the patent troll could face a maximum penalty of $250,000.
"Patent trolls" are individuals or companies that acquire patents solely for the purpose of using them to extract license fees and settlements from those targeted as alleged infringers. Consumers, small businesses and non-profit agencies are often targeted by patent trolls because they have purchased or used products with a wide range of patented technology such as printers or scanners.
"The tactics that patent trolls employ stifle entrepreneurship and can financially devastate a small business. We need to protect businesses that are attacked by dubious patent trolls looking to make a quick buck," said Attorney General Peter Kilmartin. "I commend Leader Algiere for his leadership on this important issue and for ushering its passage in the Senate."
"I am pleased that my colleagues in the Senate realize how important it is to give businesses this valuable protection," said Minority Leader Algiere, who has sponsored a version of this bill in past legislative sessions. "It is difficult enough for small businesses to thrive here without having to worry about predatory patent trolls and the potential cost of litigation to protect their businesses."
The senate bill was referred to the House Judiciary Committee for consideration. Companion legislation (H5455) is sponsored by Representative Brian Kennedy (D, District 38 - Hopkinton, Westerly), Chair of the House Corporations Committee.
According to a report published by the Practicing Law Institute, frivolous patent litigation costs U.S. businesses approximately $29 billion a year in direct costs and $80 billion in indirect costs. And, according to a study published in July by Price Waterhouse Coopers, almost 6,500 patent lawsuits were filed in the United States in 2013, of which 67 percent of those lawsuits were filed by patent trolls.
The legislation has the support of the Rhode Island Hospitality Association and the Greater Providence Chamber of Commerce. According to a published report, in 2014 at least 20 businesses in Rhode Island were sued by patent trolls.