Hello all and a happy Lunar New Year to our readers in Asia,
A few weeks ago, I reviewed the most salient events of the past year and made some predictions for the one ahead. With NPE acquisitions surging, IPR institution rates collapsing to historic lows under new USPTO leadership, three bipartisan reform bills gaining momentum through committee votes and hearings, and over $2 billion in damages awarded in just the first half of the year, there was — perhaps surprisingly — cause for cautious optimism for patent owners.
That optimism, however, was always conditional. The forces that pushed the pendulum so far against patentees were never going to quietly accept defeat. And as 2025 came to a close, they unveiled what may be their most effective countermeasure yet: a state-law mechanism that threatens to price patent enforcement out of existence for anyone without deep pockets. If the courts allow this trend to metastasize, any talk of a pro-patentee recalibration may prove fleeting.
As usual, while I focus on the macro picture in this newsletter, I want to remind everyone that we track everything happening in this world. For those who need their regular dose of news, you can follow me on LinkedIn, where I post almost daily about the most newsworthy events. If you want to catch up on what grabbed my attention in recent weeks, you can access all my posts directly here.
Happy reading!
Louis
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Tangible IP News
Louis Carbonneau will be speaking at IPWatchdog LIVE in Arlington, Virginia on March 22, 2026. Gene and Renée Quinn always put together a great event, and this year should be no different.
We are also delighted to report we recently brokered the sales of a Concurrent Camera Access patent portfolio and also that of an Audio-Visual Technologies patent portfolio. Details on both transactions can be found here.
With a few more deals in closing, look for additional announcements in the coming weeks.
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IP Advisory
While many of you know us for our brokerage services, our expertise also extends to our active IP Advisory practice. We are routinely retained by Fortune 500s, SMEs, startups, and investors for strategic intellectual property guidance.
In this capacity, we recently conducted a series of FTOs for clients in the Automotive, Metal Extraction, Semiconductor, and Water Management technology domains. The Freedom to Operate (FTO) analysis is a critical building block in the formation of a strong IP Strategy. The FTO analysis compares your actual or planned product or service to existing and pending patents in the same field. These can encompass a detailed review and analysis of hundreds of relevant patents that could hinder your ability to launch or pursue the sale of a product. We normally recommend conducting such a study when designing a new product or when a company is fundraising, as investors want their dollars spent on what is going to help grow the business rather than on defending a patent lawsuit. Each project is led by our team of seasoned technical experts and IP attorneys. Please visit our website for a full list of IP Advisory Services as well as testimonials from satisfied clients. To set up a consultation to discuss ways in which Tangible IP could assist with your IP Strategy, please reach out to info@tangibleip.biz.
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Protection or Protectionism?
On December 18, 2025, the Federal Circuit had a golden opportunity to address whether state anti-patent troll statutes unconstitutionally encroach on federally granted patent rights. Instead, the court did what courts so often do when faced with an inconvenient constitutional question: it punted.
In Micron Technology v. Longhorn IP, the panel dismissed the appeal for lack of jurisdiction, leaving intact an $8 million bond requirement imposed under Idaho’s anti-troll statute — and leaving the underlying constitutional issues for another day. Or another decade, judging by historical pace.
The result is striking. A Texas-based patent owner must post an $8 million bond before it can proceed with a federal infringement action against Boise-headquartered Micron, in Idaho federal court, under Idaho law, before an Idaho judge. If that arrangement sounds less like neutral adjudication and more like home‑court advantage with a financing requirement, that’s because it is.
And make no mistake: Micron may not simply be an outlier. It could very well become the new template.
Because bond orders are effectively unreviewable when they end the case, Micron quietly teaches defendants a powerful lesson. Seek a bond large enough to be fatal, and appellate review becomes academic. District courts, newly aware that such orders are insulated from immediate scrutiny, now hold a procedural lever capable of ending cases before they meaningfully begin. Expect others to pull it.
A Solution Still Searching for Its Problem
To better understand why this just happened, it is important to go back in time for context. A decade ago, the mythology surrounding state anti-troll laws hardened into conventional wisdom. Patent trolls were allegedly terrorizing small businesses with frivolous demand letters. Congress failed to act. Heroic state legislatures rushed in to save Main Street.
Vermont fired the first shot in 2013, and thirty‑four states have since followed. The canonical villain was MPHJ Technology, which sent demand letters asserting patents allegedly covering scan‑to‑email functionality.
What the mythology omits is inconvenient: the system already worked backed then. The FTC acted. State attorneys general investigated. MPHJ collapsed. No new statutes were required. But why let a good crisis go to waste when you can expand state power and curry favor with local industry?
The oft‑repeated claim that patent assertion entities filed “60% of all patent lawsuits” was always a masterclass in statistical sleight of hand — lumping universities, individual inventors, operating‑company subsidiaries, and demand‑letter mills into a single, menacing category. It’s the legal equivalent of counting jaywalkers as career criminals to justify building more prisons.
Federal Remedies Already Exist — And They Work
The central conceit of state anti‑troll legislation is that federal courts are powerless to deal with abusive patent assertions. This is demonstrably false.
Federal judges already wield:
- Fee shifting under Octane Fitness, which lowered the bar for exceptional‑case findings and is routinely applied where facts warrant it.
- Rule 11 sanctions, a mechanism so effective that most law firms will not touch a case they don’t believe can survive scrutiny.
- Early dispositive motions — Alice, Markman, and summary judgment — that regularly terminate weak cases before discovery becomes expensive.
- Inter partes review, which despite recent access restrictions remains available and historically invalidated claims at rates north of 70%.
If these tools are not sufficient, and I would suggest they are, the solution then lies in federal reform — not in thirty‑four inconsistent state regimes burdening a single federally granted right. The Constitution vested patent authority exclusively in Congress for a reason: uniformity matters when rights cross state lines. But uniformity, it seems, has fallen out of fashion.
The Micron Case: When the Mask Slips
The procedural history is revealing. Longhorn IP, a long‑established and widely respected NPE, sues Micron (via Katana Silicon) in the Western District of Texas over semiconductor patents. Micron — armed with a $150 billion market cap and a small army of lawyers — does not simply litigate on the merits.
Instead, it invokes Idaho’s anti‑troll statute to countersue in its home state, seeking a $15 million bond. The case is transferred to Idaho — naturally — where Judge David Nye ultimately imposes an $8 million bond.
Idaho’s statute openly declares its purpose: to “protect Idaho businesses” and “build Idaho’s economy.” Defenders insist this is not parochial favoritism. And I have a bridge in Brooklyn to sell you — though I would, of course, need to post bond first.
Longhorn’s counsel accurately described Idaho’s statute as “arguably the most extreme” in the nation. It identifies the filing of a federal infringement complaint itself as potentially unlawful conduct. In other words, a state statute treats access to a federal court — a constitutionally protected right — as the trigger for state‑law liability. Subtlety was clearly not the goal…
The Federal Circuit’s refusal to reach the merits — holding that bond orders are not immediately appealable — offers cold comfort. Yes, Longhorn may seek reconsideration. Yes, it may ask for a waiver. But if it cannot post the bond, the case is over. Apparently, that is not quite an injury worth reviewing.
Efficient Infringement’s Shiniest New Tool?
State anti‑troll statutes arrive at a convenient moment. Since eBay rendered injunctions discretionary, Alice destabilized software patents, and the PTAB earned its “death squad” reputation, infringement has increasingly become a rational economic strategy. Infringe first. Litigate later. Damages are capped; enforcement costs are not.
The $8 million Micron bond illustrates the point. That figure exceeds the total litigation budget of many patent owners through claim construction — and in some cases rivals median damages awards in comparable matters. This is not security. It is a gatekeeping fee.
State anti‑troll laws now offer defendants a new lever: force enforcement into hostile local forums, impose massive up‑front costs, and let economics do the rest. For small inventors and resource‑constrained patentees, this is not deterrence. It is a stop sign.
The Constitutional Problems Everyone Is Pretending Not to See
These statutes raise problems that go well beyond patent policy.
First, there is the Dormant Commerce Clause. By imposing disproportionate burdens on out‑of‑state patent holders asserting federally granted rights, state anti‑troll laws function as a tax on interstate enforcement. Calling it “consumer protection” does not change the effect.
Second, there is due process. Conditioning access to federal courts on the ability to post multi‑million‑dollar bonds — based on an early, subjective assessment of “bad faith” — looks uncomfortably like excessive bail for civil litigants.
Third, and most quietly dangerous, is what happens when state judges evaluate “bad faith.” To do so, they must assess claim scope, infringement likelihood, and patent strength. This is de facto claim construction and validity analysis — performed without discovery, without Markman, and without the procedural safeguards federal patent law requires. Shadow adjudication, in other words.
The IPR Connection: When One Door Closes…
With IPR rates collapsing, some now suggest state anti‑troll laws can “fill the gap.” This makes matters precisely backwards. When federal validity challenges become harder to access, the answer is federal reform — not empowering states to conduct quasi‑validity reviews under the banner of bad faith.
Time to Call This What It Is
State anti‑patent troll statutes have evolved into tools of efficient infringement. The original justification — protecting small businesses from abusive demand letters—was largely addressed before most of these laws existed. What remains is a patchwork of state regimes that burden interstate commerce, favor local defendants, and chill legitimate enforcement of federally granted rights.
The Micron bond order should be a wake‑up call. When a $150 billion corporation can impose an $8 million entry fee on a patent holder — and the Federal Circuit declines to even hear the constitutional challenge — the system has not merely tilted. It has been captured.
The 2013 Vermont experiment was a solution in search of a problem. Twelve years later, it has become the problem itself. The next test will not be Micron — it will be how many defendants now follow its lead.
Time to shut this down. Assuming, of course, that anyone in a position to do so is not too busy protecting their local economic champions from the inconvenience of paying for the technology they use.