Terry Unveils Draft Legislation to Address Abusive Patent Demand Letters

May 15, 2014

WASHINGTON, DC – Commerce, Manufacturing, and Trade Subcommittee Chairman Lee Terry (R-NE) today put forward draft text of legislation to address illegitimate patent demand letters. The legislation aims to protect businesses from abusive patent assertion entities (PAEs), or patent trolls, while preserving the ability of legitimate companies to prosecute their patents. The subcommittee will review the draft at a hearing next Thursday, May 22, at 9:15 a.m. in room 2123 of the Rayburn House Office Building.

The draft legislation increases transparency and accountability to help expose and prevent fraudulent infringement claims. It would require patent demand letters to include certain basic information to help companies determine whether a letter is legitimate. It would also enhance Federal Trade Commission (FTC) authority to levy fines on fraudulent patent demand practices, and provide state Attorney General enforcement of the federal standard.

Terry stated, “Patent trolls cost American companies tens of billions of dollars each year, and are threatening job creation and innovation. We heard from countless small businesses about the destructive consequences of these scams, and after listening to these concerns, it became clear Congress needs to act to stop this growing abuse. But we must also be careful not to reach too broadly and limit legitimate business practices. This draft legislation is a first step in trying to find a sensible solution, and next week we will hear from interested parties as we continue to work toward a balanced bill.”

To view text of the discussion draft, click HERE.

More information on next week’s hearing, the Majority Memorandum, a witness list, and witness testimony will be available HERE as they are posted.

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