Authored By Commerce, Manufacturing, and Trade Subcommittee Chairman Michael C. Burgess, M.D. (R-TX) and Rep. Marcy Kaptur (D-OH)
- To stop the practice of fraudulent and abusive patent demand letters while preserving the ability of patent holders to legitimately protect their intellectual property.
- Some abusers of the patent system have started a process of sending out large numbers of vague and deceptive “patent demand letters” that order businesses and consumers to pay undue license or settlement fees for patent licenses.
- These patent demand letter scams typically target end-users with little expertise and inadequate resources to defend against deceptive infringement allegations.
- In the most egregious case cited, involving MPHJ, the FTC connected 81 subsidiaries as responsible for sending 31,000 demand letters to small businesses around the country. Unfortunately, the FTC’s enforcement authority only allowed them to stop MPHJ from sending additional letters.
What the TROL Act Will Do:
- Establishes that it is an unfair or deceptive act or practice under the FTC Act to engage in a pattern or practice of sending demand letters that contain misrepresentations about patent rights and allows the FTC and State AGs to fine violators acting with reckless indifference.
- Requires that demand letters include key information, such as the person with the rights of the patent, parent companies, contact information, and information on how the recipient is infringing the patent. This will help businesses weed out legitimate from deceptive demand letters.
- Establishes a national standard for enforcement of abusive patent demand letters.
- Preserves all of the FTC’s existing powers and enforcement authority and current state laws dealing with fraudulent or deceptive practices.