The Reemergence of State Anti-Patent Law

51 Pages Posted: 2 Mar 2017 Last revised: 18 Mar 2017

Camilla Alexandra Hrdy

University of Akron School of Law

Date Written: February 28, 2017

Abstract

The majority of states have now passed laws prohibiting bad faith assertions of patent infringement. The laws are heralded as a new tool to protect small businesses and consumers from harassment by so-called patent trolls. But state “anti-patent laws” are not a new phenomenon. In the late nineteenth century, many states passed regulations to prevent rampant fraud by patent peddlers who aggressively marketed fake or low value patents to unwitting farmers. However, courts initially held the laws were unconstitutional. Congress, courts reasoned, had power under Article I, Section 8, Clause 8 to “secure” patent rights. If states could tax patents or alter the terms on which patents were sold and enforced, this risked destroying a federal property right and nullifying an Article I power. In the early twentieth century, the U.S. Supreme Court finally held that states retained some authority to regulate, and to tax, patent transactions. But the Court made clear that states could never impose an “oppressive or unreasonable” burden on federal rights. The Federal Circuit has completely ignored this preemption law. But it has never been overruled and must be consulted today in assessing the constitutionality of states’ current efforts to combat patent trolls.

Suggested Citation

Hrdy, Camilla Alexandra, The Reemergence of State Anti-Patent Law (February 28, 2017). Available at SSRN: https://ssrn.com/abstract=2925588

Camilla Alexandra Hrdy (Contact Author)

University of Akron School of Law ( email )

259 S. Broadway
Akron, OH 44325
United States

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