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

Nick Groombridge shares how an accidental turn into patent law informed his approach to building a practice based on flexibility and balancing client and practitioner needs
Clarivate’s Ed White discusses the joy of measuring innovation and why patent attorneys are a special breed
National groups for the UK and the Netherlands have flagged concerns with the choice of venue, following a formal complaint from Australia’s national group
Rasenberger is the CEO at the Authors Guild in the US
Vold-Burgess is the client director at Acapo Onsagers and the former CEO at Acapo in Norway
Williams is the CEO of the UKIPO in the UK
Orliuk is director of the Ukrainian IP office
Julie is chief IP counsel at Teva in the US
Ludlam is chief IP and litigation officer at Lenovo, while Maharaj is chief licensing officer for Ericsson in the US
Campinos is the president of the EPO in Munich
Gift this article