Wednesday, September 25, 2013

The use of state consumer protection laws to curb litigation by "patent trolls."

There is a recent trend among states to try and use state consumer protection laws to prevent patent trolls from suing in their federal courts. I briefly discussed patent trolls elsewhere. When states use their own laws to inhibit the operation of federal law, such as here, federal pre-emption is implicated. The pre-emption doctrine comes from the Supremacy Clause of the U.S. Constitution. Under it, state laws that conflict with federal law are ineffective.

In this context, state consumer protection laws may or may not be pre-empted. There is another reason they may be unconstitutional: the burden on interstate commerce. Under the Commerce Clause, the federal government has the right to govern interstate commerce. Even though the federal government has not spoken directly on this issue, states cannot enact or use legislation that discriminates against interstate commerce. Using state consumer protection laws this way burdens interstate commerce, because one cannot avoid suing in a particular state if jurisdiction or venue requirements mandate that a lawsuit be filed there. Accordingly, a plaintiff entitled to redress could be foreclosed an opportunity to bring a lawsuit.

This does not mean that patent trolls are not a problem. It means that states likely have to wait for the federal government to address the issue. State consumer protection laws could be a valid way to defend an infringement lawsuit by a putative patent troll, but they cannot preclude a party from bringing the lawsuit.

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