2017 South Carolina Code of Laws
Title 39 - Trade and Commerce
CHAPTER 4 - ABUSIVE ASSERTIONS RELATING TO INTELLECTUAL PROPERTY
Section 39-4-120. Bad faith assertions of patent infringement prohibited; exceptions.

(A) It is a violation of this chapter for a person, in connection with the assertion of a United States patent, to send, or cause any person to send, any written or electronic communication that states that the intended recipient or any affiliated person is infringing or has infringed a patent and bears liability or owes compensation to another person, if:

(1) the communication falsely threatens litigation if compensation is not paid or the infringement issue is not otherwise resolved and there is a consistent pattern of such threats having been issued and no litigation having been filed;

(2) the communication falsely states that litigation has been filed against the intended recipient or any affiliated person; or

(3) the assertions contained in the communication lack a reasonable basis in fact or law because:

(a) the person asserting the patent is not a person, or does not represent a person, with the current right to license the patent to, or to enforce the patent against, the intended recipient or any affiliated person;

(b) the communication seeks compensation for a patent that has been held to be invalid or unenforceable in a final, unappealable or unappealed judicial or administrative decision;

(c) the communication seeks compensation on account of activities undertaken after the patent has expired;

(d) the content of the communication fails to include such information necessary to inform an intended recipient or any affiliated person about the patent assertion by failing to include any one of the following:

(i) the identity of the person asserting a right to license the patent to, or enforce the patent against, the intended recipient or any affiliated person;

(ii) the patent number issued by the United States Patent and Trademark Office alleged to have been infringed; or

(iii) the factual allegations concerning the specific areas in which the intended recipient or affiliated person's products, services, or technology infringed the patent or are covered by the claims in the patent;

(e) the communication lacks the information described in subitem (d), the intended recipient requests the information, and the person fails to provide the information within a reasonable period of time;

(f) before sending the communication, the person failed to conduct an analysis comparing the claims in the patent to the intended recipient'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;

(g) the person in the communication demands payment of a license fee or response within an unreasonably short period of time;

(h) the person in the communication offers to license the patent for an amount that is not based on a reasonable estimate of the value of the license; or

(i) the communication's 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.

(B) Nothing in this section shall be construed to be a violation of this chapter for any person who owns or has the right to license or enforce a patent to:

(1) advise others of that ownership or right of license or enforcement;

(2) communicate to others that a patent is available for license or sale;

(3) notify another of the infringement of the patent; or

(4) seek compensation on account of past or present infringement, or for a license to the patent, provided that the person is not acting in bad faith.

(C) The provisions of this chapter shall not apply to any written or electronic communication sent by:

(1) any owner of a patent who is using the patent in connection with substantial research, development, production, manufacturing, processing or delivery of products or materials;

(2) a manufacturer or its affiliate;

(3) any institution of higher education as that term is defined in Section 101 of the Higher Education Act of 1963 (20 U.S.C. 1001);

(4) any technology transfer organization whose primary purpose is to facilitate the commercialization of technology developed by an institution of higher education; or

(5) any person or business entity seeking a claim for relief arising under 35 U.S.C. Section 271(e)(2).

HISTORY: 2016 Act No. 261 (H.3682), Section 2, eff July 1, 2016.

Repeal

Chapter 4, Title 39 repealed as of July 2, 2021 unless reauthorized, see Section 39-4-150.