Vermont passes controversial new law targeting patent trolls

Managing IP is part of Legal Benchmarking Limited, 1-2 Paris Gardens, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Vermont passes controversial new law targeting patent trolls

Vermont enacted a new law on Wednesday, believed to be the first of its kind in the US, in an effort to crack down on so-called patent trolls

The legislation, known as Bad Faith Assertions of Patent Infringements, was signed into law by Vermont Governor Peter Shumlin. It is unclear whether states have the authority to regulate patent activity, due to federal preemption doctrines.

The law allows parties who are threatened by trolls to sue for damages, even if the patent owner has filed no lawsuit against them.

It also enables the state’s Attorney General to pursue civil enforcement against parties believed to be asserting patents in bad faith.

In addition, the patent owner can be required to post a bond of up to $250,000 under the new law, to cover any attorneys’ fees a court may later award to an alleged infringer. The court can deny the bond if the defendant lacks “available assets” equivalent to the amount of the bond.

Rather than define bad faith assertions, the law lists factors to help judges separate legitimate claims from illegitimate ones.

Under the new law, factors that might lead a court to conclude that a claim is illegitimate would include:

  • Not identifying the patents in question, who owns the patent, and to precisely how the patent has been infringed;

  • Demanding an unreasonable amount of money, and/or demanding payment in an unreasonably short amount of time;

  • Making “deceptive” or “meritless” claims.

Factors that might lead a court to conclude that a claim is legitimate include:

  • The claim being made by the original inventor, an educational institution or someone who has commercialised the invention;

  • Having demonstrated “good faith business practices” in previous efforts to enforce the patent, or one that is “substantially similar”

  • Previous success in enforcing the patent through litigation.

The law also grants courts leeway to consider any other factors they believe to be relevant.

more from across site and SHARED ros bottom lb

More from across our site

Counsel explain how the USPTO’s decision to discretionarily deny institution of a PTAB case affects their advice to clients
The Life Sciences Awards announces the winners for the 6th annual awards
The UPC’s plans to roll out its new Case Management System and a setback for TikTok in India were also among the top talking points
Trademark specialist Jonathan Thomas says he’s excited to introduce his clients to other areas of Greenberg Traurig’s practice
Counsel at firms responsible for managing the highest number of registered trademarks explain the secrets behind staying organised and keeping the work flowing in
Attorneys explain what stakeholders should know about Patent Term Adjustments in Brazil, more than three years after a landmark Brazilian Supreme Court ruling
New categories have been added to reflect a changing legal and social landscape
Three sources explain why a notification by Nanjing’s IP centre in China banning AI use in patent drafting is too broad and could be difficult to enforce
Sheppard Mullin’s latest hires explain why the firm's industry expertise impressed them
Elizabeth Godfrey explains why she doesn’t believe in a ‘salesperson’ approach to BD, and reveals how AI is playing an important role at Davies Collison Cave
Gift this article