Gov. Charlie Baker nixed a proposal to crack down on so-called “patent trolls,” saying as written it could have “unintended consequences” for Massachusetts residents and companies.
The proposal was included as a section in a $1.1 billion economic development package. Baker vetoed the section but signed off on other parts of the package, including a state sales tax holiday set for this weekend and restrictions on the use of non-compete agreements.
Entities known as “patent trolls” attempt to send letters to companies alleging that the company, usually a start-up or an entrepreneur, is infringing on an existing patent, according to backers of the proposal. The entities then demand to be paid under threat of a lawsuit.
The proposal, pushed by state Sen. Eric Lesser, seeks to block a “patent troll” from making a “bad faith” allegation of patent infringement.
In a letter to lawmakers that included an explanation of his veto, Baker said the proposal “creates a new cause of action against patent owners in a manner that is not narrowly tailored and is likely to have unintended consequences for Massachusetts residents, companies and educational institutions.”
Baker added: “While I agree that states have a role to play in deterring bad faith assertions of patent infringement outside of the context of federal patent litigation, I believe that the Legislature should revisit this topic in a future session and draft a more focused solution to this program.”
Sen. Lesser, a Longmeadow Democrat, said he was disappointed with the veto, adding that he knows patent trolling is an issue the governor cares about. Lesser plans to renew his push in next year’s legislative session.
“Dozens of other states have this protection,” he said.
Massachusetts has a booming start-up and innovation sector, he noted. “Unfortunately we have these trolls that intimidate them and shake them down for payouts before they can even get their idea off the ground.”
Lesser said Baker came under pressure from “big interests” like the biotechnology industry, which “got in his ear to block it.”
“Ultimately it’s going to make Massachusetts a harder place to launch a start up or get venture investment,” Lesser said of the veto.
Along with the veto of the “patent troll” provision, Baker also nixed the creation of a commission on “last mile” broadband connections, saying it would divert time and resources away from his own administration’s efforts.
The governor also sent back to the Legislature a number of amendments to what they sent him, touching on an apprenticeship tax credit program, a study of widening Route 2 between Concord and Gardner, a commission studying stable housing and economic self-sufficiency, and a task force on industrial mill buildings.
Shira Schoenberg contributed to this report. Material from State House News Service was used in this report.