With a stroke of Governor Jay Nixon’s pen, this week Missouri joined the growing list of states that have enacted laws to curb bad faith assertions of patent infringement. Senate Bill No. 706, effective August 28, 2014, adds sections 416.650, 416.652, 416.654, 416.656, and 416.658 to the Missouri Revised Statutes.

The new law creates a seven factor test that a court can consider when determining if a person has made a bad faith assertion of patent infringement in a demand letter:

The demand letter does not contain the patent number, identity of the patent owners and assignees, and factual allegations concerning the alleged infringement.

  1. The demand letter does not contain the patent number, identity of the patent owners and assignees, and factual allegations concerning the alleged infringement.
  2. The person making the assertion of infringement refuses to provide such information upon request.
  3. The demand letter demands a response within an unreasonably short period of time.
  4. The person offers to license the patent for an amount that is not based on a reasonable estimate of the value of the license.
  5. The person previously presented a demand letter asserting the same patent and a court has found this previous letter was presented in bad faith.
  6. The person attempted to enforce the patent through litigation and a court has found the litigation was brought in bad faith.
  7. Any other factor the court finds relevant.

Additionally, the new law includes seven factors evidencing that a person asserting patent infringement in a demand letter did not make the assertion in bad faith:

  1. The demand letter does not contain the patent number, identity of the patent owners and assignees, and factual allegations concerning the alleged infringement.
  2. The person making the assertion of infringement refuses to provide such information upon request.
  3. The demand letter demands a response within an unreasonably short period of time.
  4. The person offers to license the patent for an amount that is not based on a reasonable estimate of the value of the license.
  5. The person previously presented a demand letter asserting the same patent and a court has found this previous letter was presented in bad faith.
  6. The person attempted to enforce the patent through litigation and a court has found the litigation was brought in bad faith.
  7. Any other factor the court finds relevant.

The new law establishes a private right to a cause of action by parties subject to bad faith demand letters, while also providing authority for the attorney general to investigate and prosecute bad faith patent assertions under the Missouri antitrust laws.