Bill SB 1540 A, which was passed on February 14 after a 30-0 vote, prohibits a company from accusing another entity of infringing its patent in bad faith.

It also allows a prosecuting attorney to determine whether a party has acted in bad faith and either investigate or take enforcement action under Oregon’s Unlawful Trade Practices Act.

The bill was sponsored by Republican senator Jackie Winters, who tweeted earlier this month: “Oregon small businesses have plenty of challenges without worrying about extortion scams”.

SB 1540 A is now being reviewed by the House Committee on Judiciary.

Steven Routh, a partner at Orrick, Herrington & Sutcliffe LLP in Washington DC, said that Vermont had recently passed a similar bill, and that Nebraska is currently considering its own.

“Most of these state statutes are in the form of consumer protection anti-fraud statutes,” he said.

“They’re aimed at so-called patent trolls who make mass mailings to people in industry and try to collect licensing royalties,” he explained.

He said that the state attorney general or prosecuting attorneys may now take action if they make a finding of bad faith.

The indicators for bad faith are outlined in the statute, Routh added. They include making an assertion without telling the recipient what the patent is, who owns it, the basis of the claim, or how the patent reads on a process or product.

He said that it makes sense for Oregon to pass such a bill, and deal with a “low-level patent troll phenomenon.

“It requires federal legislation to deal with more substantive abuses in the patent system”.