                                 CODE OF VIRGINIA

BAD FAITH ASSERTIONS OF PATENT INFRINGEMENT (§ 59.1-215.2)

A. A person shall not make, in bad faith, an assertion of patent infringement.

B. The following shall constitute indicia that a person&#8217;s assertion of
patent infringement was made in bad faith:

   1. The demand letter does not contain:
   				a. The number of the patent that is asserted, alleged, or claimed to have
   been infringed; or
   				b. The name and address of the patent&#8217;s owner or owners and assignee
   or assignees, if any.

   2. The person sends a demand letter to a target without first making a
   reasonable effort under the circumstances to conduct an analysis comparing the
   claims in the patent to the target&#8217;s products, services, and technology,
   or to identify specific areas in which the products, services, or technology
   are covered by the claims in the patent.

   3. The demand letter does not identify specific areas in which the products,
   services, and technology are covered by the claims in the patent.

   4. The person offers to license the patent for an amount that is not based on
   a reasonable estimation of the value of a license to the patent.

   5. The person making an assertion of patent infringement acts in subjective
   bad faith, or a reasonable actor in the person&#8217;s position would know or
   reasonably should know that such assertion is baseless.

   6. The assertion of patent infringement is deceptive, or the person threatens
   legal action that cannot legally be taken or that is not intended to be taken.

   7. The person or its subsidiaries or affiliates have previously filed or
   threatened to file one or more lawsuits based on the same or similar assertion
   of patent infringement, the person attempted to enforce the assertion of
   patent infringement in litigation, and a court found the assertion to be
   objectively baseless or imposed sanctions for the assertion.

   8. The patent alleged to be infringed was not in force at the time the
   allegedly infringing conduct occurred, or the patent claims alleged to be
   infringed have previously been held to be invalid.

C. The following shall constitute indicia that a person&#8217;s assertion of
patent infringement was not made in bad faith, but the absence of such indicia
shall not constitute evidence of bad faith:

   1. The person engages in a reasonable effort under the circumstances to
   establish that the target has infringed the patent and to negotiate an
   appropriate remedy.

   2. The person makes a substantial investment in the use of the patent or in
   the development, production, or sale of a product or item covered by the
   patent.

   3. The person has:
   				a. Demonstrated good faith in previous efforts to enforce the patent or a
   substantially similar patent; or
   				b. Successfully enforced the patent, or a substantially similar patent,
   through litigation.

   4. The person is an institution of higher education or a technology transfer
   office organization owned by or affiliated with an institution of higher
   education.

D. The lists of indicia in this section are non-exclusive, and all indicia need
not be present for a finding of bad faith or good faith.

HISTORY: 2014, cc. 810, 819.