§75-143. Abusive patent assertions

(a)        It is unlawful for a person to make a bad-faith assertion of patent infringement. A court may consider the following factors as evidence that a person has made a bad-faith assertion of patent infringement:

(1)        The demand does not contain all of the following information:

a.         The patent application number or patent number.

b.         The name and address of the patent owner or owners and assignee or assignees, if any.

c.         Factual allegations concerning the specific areas in which the target's products, services, and technology infringe the patent or are covered by specific, identified claims in the patent.

d.         An explanation of why the person making the assertion has standing, if the United States Patent and Trademark Office's assignment system does not identify the person asserting the patent as the owner.

(2)        Prior to sending the demand, the person failed to conduct an analysis comparing the claims in the patent to the target's products, services, and technology, or the analysis was done but does not identify specific areas in which the products, services, and technology are covered by the claims in the patent.

(3)        The demand lacks the information described in subdivision (1) of this subsection, the target requests the information, and the person fails to provide the information within a reasonable period of time.

(4)        The person demands payment of a license fee or response within an unreasonably short period of time.

(5)        The person offers to license the patent for an amount that is not based on a reasonable estimate of the value of the license, or the person offers to license the patent for an amount that is based on the cost of defending a potential or actual lawsuit.

(6)        The claim or assertion of patent infringement is meritless, and the person knew or should have known that the claim or assertion is meritless; or the claim or assertion relies on an interpretation of the patent that was disclaimed during prosecution, and the person making the claim or assertion knows or should have known about the disclaimer, or would have known about the disclaimer if the person reviewed the patent's prosecution history.

(7)        The claim or assertion of patent infringement is deceptive.

(8)        The person or its subsidiaries or affiliates have previously or concurrently filed or threatened to file one or more lawsuits based on the same or similar claim of patent infringement and (i) those threats or lawsuits lacked the information described in subdivision (1) of this subsection or (ii) the person attempted to enforce the claim of patent infringement in litigation and a court found the claim to be meritless.

(9)        The person making the claim or assertion sent the same demand or substantially the same demand to multiple recipients and made assertions against a wide variety of products and systems without reflecting those differences in a reasonable manner in the demands.

(10)      The person making the claim or assertion is aware of, but does not disclose, any final, nonfinal, or preliminary postgrant finding of invalidity or unpatentability involving the patent.

(11)      The person making the claim or assertion seeks an injunction when that is objectively unreasonable under the law.

(12)      Any other factor the court finds relevant.

(b)        A court may consider the following factors as evidence that a person has not made a bad-faith assertion of patent infringement:

(1)        The demand contains the information described in subdivision (1) of subsection (a) of this section.

(2)        Where the demand lacks the information described in subdivision (1) of subsection (a) of this section and the target requests the information, the person provides the information within a reasonable period of time.

(3)        The person engages in a good-faith effort to establish that the target has infringed the patent and to negotiate an appropriate remedy.

(4)        The person makes a substantial investment in the use of the patent or in the production or sale of a product or item that the person reasonably believes is covered by the patent. "Use of the patent" in the preceding sentence means actual practice of the patent and does not include licensing without actual practice.

(5)        The person is either (i) the inventor or joint inventor of the patent or, in the case of a patent filed by and awarded to an assignee of the original inventor or joint inventor, is the original assignee or (ii) an institution of higher education or a technology transfer organization owned or affiliated with an institution of higher education.

(6)        The person has demonstrated good-faith business practices in previous efforts to enforce the patent, or a substantially similar patent, or has successfully enforced the patent, or a substantially similar patent, through litigation.

(7)        Any other factor the court finds relevant.

(c)        This Article does not apply to any of the following:

(1)        A demand letter or assertion of patent infringement arising under any of the following:

a.         7 U.S.C. § 136, et seq.

b.         7 U.S.C. § 2321, et seq.

c.         21 U.S.C. § 301, et seq.

d.         35 U.S.C. § 161, et seq.

e.         35 U.S.C. § 271(e)(2).

f.          42 U.S.C. § 262.

(2)        A demand letter or assertion of patent infringement by or on behalf of (i) an institution of higher education incorporated under the laws of and with its principal offices in North Carolina or (ii) a technology transfer organization owned by or affiliated with the institution of higher education.

(3)        A demand letter or assertion of patent infringement by or on behalf of a nonprofit research organization recognized as exempt from federal income tax under 26 U.S.C. § 501(c)(3) incorporated under the laws of and with its principal offices in North Carolina, or a technology transfer organization owned by or affiliated with the organization.

(4)        A demand letter or assertion of patent infringement made by an operating entity or its affiliate.

(d)       Subject to the provisions of subsections (a) and (b) of this section, and provided the activities are not carried out in bad faith, nothing in this section shall be construed to deem it an unlawful practice for any person who owns or has the right to license or enforce a patent to do any of the following:

(1)        Advise others of that ownership or right of license or enforcement.

(2)        Communicate to others that the patent is available for license or sale.

(3)        Notify another of the infringement of the patent.

(4)        Seek compensation on account of past or present infringement or for a license to the patent.

(2014-110, s. 2.1.)