House Republican working on demand letter bill

Rep. Lee Terry (R-Neb.) said is working on a bill to address demand letters from “patent trolls.”

“These bad actors are arrogantly manipulating the intellectual property system—and they’re getting away with it,” he said Tuesday, during a hearing on the topic held by the House Commerce subcommittee on Trade, which he chairs.

Terry pledged to introduce a bipartisan bill to curb abusive demand letters, or the misleading notices that companies send accusing recipients of patent infringement in the hopes of getting recipients to pay licensing fees.

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To combat complaints that demand letters are often intentionally vague and unclear, Terry said the bill will likely establish requirements about what information must be included in demand letters.

During the hearing, ranking member Jan Schakowsky (D-Ill.) ran through a list of things that could be required in demand letters, such as the sender’s contact information and specific information about which patent is allegedly being infringed and how.

Terry pointed to Schakowsky’s line of questioning during the hearing as an example of what the bill could contain.

“I think you can tell from the panel discussions here that we’re all generally on the same page about a prescriptive bill about what needs to be in these types of demand letters,” he said.

He declined to give a timeline for the bill but said, “probably within the next couple of weeks we’ll start getting both sides together to at least start outline.”

Terry’s efforts to craft a demand letter bill come after Sen. Claire McCaskill (D-Mo.) introduced a bill to curb demand letters earlier this year.

McCaskill’s bill — which has faced multiple delays for a markup by the Senate Commerce Committee — would allow the Federal Trade Commission to require companies to include certain information in demand letters.

Terry said he has been “lightly watching” McCaskill’s bill and will not be replicating her process in his subcommittee.

“We’re going to do our own thing in the House,” he said. “We’re not going to just copy McCaskill’s efforts or what she’s writing.”

McCaskill said on Tuesday she will be working with the House Commerce subcommittee as it looks to write a demand letter bill.

The subcommittee “is going to be writing its bill with out input and help” she said. “It’ll be a collaborative process.”

McCaskill noted the jurisdictional concerns that have come up in the Senate over her bill.

Senate Judiciary Chairman Patrick Leahy (D-Vt.) “feels very strongly that a comprehensive patent reform bill is necessary out of the Judiciary Committee.”

“That would be terrific, but in the mean time [a demand letter bill] would go a long way to wards addressing the problem.”

Currently, Congress is considering broader patent reform proposals, including one from Leahy, which is currently awaiting a markup as committee members negotiate over the more contentious proposals. 

McCaskill said she will “certainly try to” get her demand letter proposal included in Leahy’s broader patent reform bill.

She said she is open to introducing her proposal as an amendment when Leahy’s bill comes to the floor, “but hopefully we can get it worked out ahead of time.”

Last year, the House passed Judiciary Chairman Bob Goodlatte’s (R-Va.) Innovation Act.

Terry said he will consider his demand letter bill as a separate process than the broader patent reform efforts.

“The demand letters, while related, is a standalone separate issue, and we’re going to treat it as such,” he said.