Charlie Baker signs economic bill, but vetoes patent troll crackdown

Governor Charlie Baker addresses reporters at the State House on July 26.Charles Krupa/Associated Press

In another tug-of-war between big business and startups, big business again won out in the end.

That’s how state Senator Eric Lesser views the rejection Friday by Governor Charlie Baker of legislation he championed to crack down on patent trolls — bad actors who send patent infringement notices to innovators and entrepreneurs, to bully them into forking over money.

The Legislature tucked the measure into its massive economic development bill that it passed last week, then sent the entire package to Governor Charlie Baker, before formal sessions on Beacon Hill ended for the year.

But then came the concerns from several big business groups — including Associated Industries of Massachusetts, the Massachusetts Business Roundtable, and the Massachusetts Biotechnology Council. Their argument to the Baker administration: the bill overreaches by potentially chilling legitimate patent claims from companies and institutions.

Baker ended up agreeing. On Friday, he endorsed almost everything in the economic development bill — including nearly $1.2 billion in spending authorizations, restrictions on noncompete agreements, and a just-in-time approval of a sales tax holiday for this weekend. The patent troll language was only one of two sections he explicitly vetoed.

Baker’s stated reasoning: The measure isn’t tailored narrowly enough, and creates a new reason to bring legitimate patent owners into court, one that could have unintended consequences. States can play a role in deterring bad-faith patent assertions, Baker said, but the Legislature should craft a more focused solution.

Lesser says the bill already addressed these concerns by protecting research institutions and patents’ original inventors from bad-faith assertions — i.e. accusations of being a patent troll. But the business groups were worried because these weren’t outright exemptions: The bill stated that a judge may consider those factors when ruling if a patent claim is in bad faith.

With formal sessions done for the year, Lesser will have to start again in 2019 to add Massachusetts to the 30-plus states with anti-troll laws on the books. In the meantime, he worries about the message the bill’s failure could send to entrepreneurs — and to the trolls who might try to take advantage of them.