What's happening
This bill makes it a deceptive business practice to send unsolicited threats or payment demands over alleged intellectual property violations, with exceptions for licensed attorneys.
Why it matters
Targets predatory copyright/patent claim letters. The bill aims to curb aggressive and potentially misleading payment demands or litigation threats over intellectual property (IP) violations, especially when such communications are sent without prior contact or basis.
Protects individuals and small businesses from “IP shakedowns”. By labeling these unsolicited threats as deceptive business practices, the bill seeks to stop entities from intimidating people or businesses into paying questionable demands simply to avoid the risk or cost of a lawsuit.
Exempts legitimate legal action. The bill specifically allows licensed attorneys, properly retained by the actual IP holder and following ethical rules, to send such notices in the context of genuine disputes—helping ensure legitimate IP enforcement isn’t hindered.
Promotes fair business practices and consumer protection. By making these aggressive tactics illegal, the bill provides new grounds for consumers and businesses to challenge or seek redress against those who use IP claims as a tool for coercion rather than actual rights enforcement.
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Who cares
Headline styles
Ban Threatening Fake IP Claims
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to consumer protection
- Referred to consumer protection
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4102
2019-2020 Regular Sessions
IN SENATE
February 28, 2019
Introduced by Sen. SEWARD -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer Protection
AN ACT to amend the general business law, in relation to deceptive acts and practices in the conduct of any business, trade or commerce
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 349 of the general business law is amended by adding a new subdivision (k) to read as follows:
(k) For purposes of this article, in addition to any other deceptive act or practice determined by law, it shall also constitute a deceptive act or practice in the conduct of any business, trade or commerce, for any person, firm, corporation or association or agent or employee thereof, to make an unsolicited threat concerning an alleged violation of intellectual property rights.
(1) For purposes of this subdivision, an unsolicited threat concerning an alleged violation of intellectual property rights shall consist of:
(i) threatening civil litigation, where such threat relates to an alleged violation of intellectual property rights, unless the party so threatened makes a payment of money to a person, firm, corporation or association or agent or employee thereof, by a date certain; or
(ii) demanding payment from a person by a date certain, where such demand relates to an alleged violation of intellectual property rights, unless the person so demanded makes a payment of money by a date certain, and that unless such initial demanded payment is made by the demandee by such date certain, then such demanded payment will increase to a higher demanded amount after such date certain.
(2) This subdivision shall not apply to an attorney licensed to practice law before the courts of the state of New York, and/or licensed to practice intellectual property law before the federal courts of the United States, where such attorney has been duly retained and employed by the registered holder of intellectual property rights, in accordance
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10323-01-9
S. 4102 2
with federal law, and is making such demand consistent with ethical guidelines governing the conduct of attorneys, in the course of such attorney's representation of such registered holder, during a non frivolous dispute for an alleged violation of such registered holder's intellectual property rights.
§ 2. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the general business law, in relation to deceptive acts and practices in the conduct of any business, trade or commerce
Purpose or general idea of bill
This bill would amend the general business law, to prohibit any the threatening of civil litigation or the making of demands for payment, by non-attorney firms that troll the Internet claiming violations of intel- lectual property rights.
Summary of specific provisions
This bill would add a new subdivision (k) to section 349 of the general business law to:
Read the full memo (699 words)
*Expand the definition of deceptive act or practice in the conduct of any business, trade or commerce, for any person, firm, corporation or association or agent or employee thereof, to make an unsolicited threat concerning an alleged violation of intellectual property rights. For purposes of new definition, an unsolicited threat concerning an alleged violation of intellectual property rights shall consist of:
-threatening civil litigation, where such threat relates to an alleged violation of intellectual property rights, unless the party so threat- ened makes a payment of money to a person, firm, corporation or associ- ation or agent or employee thereof, by a date certain; or
-demanding payment from a person by a date certain, where such demand relates to an alleged violation of intellectual property rights, unless the person so demanded makes a payment of money by a date certain, and that unless such initial demanded payment is made by the demandee by such date certain, then such demanded payment will increase to a higher demanded amount after such date certain.
*This new prohibited deceptive act or practice would not apply to an attorney licensed to practice law before the courts of the state of New York, and/or licensed to practice intellectual property law before the federal courts of the United States, where such attorney has been duly retained and employed by the registered holder of intellectual property rights, in accordance with federal law, and is making such demand consistent with ethical guidelines governing the conduct of attorneys, in the course of such attorney's representation of such registered hold- er, during a non-frivolous dispute for an alleged violation of such registered holder's intellectual property rights.
Justification
In recent years, a number of non-legal firms have begun trolling the internet, mining websites for pictures and other material, which could have intellectual property right protection. These nonlegal firms, then contact the owners of the website and either threaten civil litigation or demand payment for what they claim is an alleged violation of intel- lectual property rights. This is despite the fact that such firms do not
represent any intellectual right holder nor do they exhibit any actual violation of any intellectual property right under federal law.
As a result, this unscrupulous practice has resulted in many innocent website owners having to incur unjustified legal expenses, or unknowing- ly make a payment to these non-lawyer firms. Many of the practices used by these firms are extortionary, threatening and unscrupulous. As such, they should clearly fall into the purview of the state's deceptive trade practices prevention statute (section 349 of the general business law) which allows the attorney general, as well as the victim of these decep- tive acts, to take action to combat this misconduct.
This bill would accordingly, classify such unscrupulous activity as a deceptive trade practice and act, pursuant to this section of the gener- al business law.
The bill would not conflict with the enforcement of actual violations of intellectual property law, in that it would exempt any attorney licensed to practice law before the courts of the state of New York, and/or licensed to practice intellectual property law before the federal courts of the United States, where such attorney has been duly retained and employed by the registered holder of intellectual property rights, in accordance with federal law, and is making such demand consistent with ethical guidelines governing the conduct of attorneys, in the course of such attorney's representation of such registered holder, during a non- frivolous dispute for an alleged violation of such registered holder's intellectual property rights.
Prior legislative history
S. 9025 of 2017-2018.
Fiscal implications
None.
Effective date
Immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.