State Authority to Regulate Patent ‘Trolls’ at Stake in Longhorn Appeal

The Federal Circuit is set to hear arguments Monday in a closely watched appeal that could determine whether Idaho’s Bad Faith Assertions of Patent Infringement Act conflicts with federal law.  

The case stems from a 2022 dispute between Micron Technology and Longhorn IP affiliate Katana Silicon Technologies, which sued Micron for infringing three patents later invalidated by the Patent Trial and Appeal Board. Micron responded with a state court complaint under Idaho’s statute, which allows targets of baseless patent threats to seek damages and court-ordered bonds. A federal judge upheld the law and ordered Katana to post an $8 million bond. 

Katana argues that statute is unconstitutional and preempted by federal patent law. Idaho, backed by over 30 states and the District of Columbia, argues the law is a valid tool to curb abusive practices such as patent trolling.  

Finnegan partner Lionel Lavenue told MLex the statute’s bond requirement “does seem close to the edge,” but he doesn’t expect the Federal Circuit to invalidate it. He noted that if the court sides with the appellants on preemption, the impact may be limited due to differences among state laws. 

Lavenue called counter efforts for bad faith assertions “reasonable,” but said he was surprised by how simple compliance can be to “satisfy many of these requirements.”  

He added that many nonpracticing entities could avoid liability by conducting and documenting a pre-filing investigation. “They’re in the Wild West,” he says, “shooting their guns without having thought about what they’re shooting at.”  

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