South Carolina Business Law Blog

A bill pending in the South Carolina General Assembly that would make "bad faith assertions of patent infringement" an "unfair trade practice" under South Carolina law got a "jurisdictional boost" from a recent Opinion and Order issued by a Vermont Federal Court judge. Background The actions of patent-assertion entities (PAEs) that purportedly own patents and use litigation and the threat of litigation to enforce them are well-documented.  (For a brief description of the topic and some additional resources, click here ). PAEs are referred to by their detractors as "patent trolls." As a general proposition, patent law is exclusively federal in nature.  Congress has given the U.S. district courts original and exclusive jurisdiction, pursuant to 28 U.S. Section 1338 , over any civil action related to patents. As a result, litigation involving the validity, infringement, and enforcement of patents must take place in federal district court. V

Per the United States Supreme Court's unanimous ruling in Mississippi v. AU Optronics Corp. (issued on January 14, 2014), a state's lawsuit seeking restitution for the benefit of its citizens does not meet the definition of a "mass action" under the Class Action Fairness Act of 2005 (CAFA) and cannot be removed to federal court. Background   CAFA defines "mass action" as "any civil action . . . in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs' claims involve common questions of law or fact."  28 U.S.C Section 1332(d)(11)(B)(i). This case reached the Supreme Court following the 5th Circuit's determination that Mississippi's lawsuit against AU Optronics qualified as a "mass action" under CAFA.  According to the 5th Circuit, even though the State of Mississippi was the only "named plaintiff," the "real parties in interest" w