House panel approves bill to curb patent threats

The House Commerce subcommittee on Trade passed a bill Thursday aimed at increasing transparency and accuracy in the letters companies send to threaten patent infringement lawsuits.

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Over objections from Democrats, the panel voted 13-6 to approve subcommittee Chairman Lee Terry’s (R-Neb.) bill, the Targeting Rogue and Opaque Letters (TROL) Act.

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That bill targets companies sending abusive “demand letters” — which threaten to sue for patent infringement — by requiring that the letters include certain information and prohibiting them from including certain deceptive information.

The bill allows the Federal Trade Commission (FTC) and state attorneys general to bring charges against companies that send deceptive letters in bad faith.

Democrats largely opposed the bill, saying it would make it difficult for the FTC and state attorneys general to bring cases against companies sending abusive demand letters.

“There are major problems that make this bill, as I see it, unworkable,” House Energy and Commerce Committee ranking member Henry Waxman (D-Calif.) said.

During opening statements on Wednesday, Terry addressed concerns from stakeholders and the FTC.

He said the process of bringing together “so many stakeholders with differing perspectives” has been “difficult,” but said his bill “strikes the appropriate balance” between protecting companies that receive demand letters and ensuring patent holders have the ability to enforce their intellectual property rights.

The subcommittee adopted one amendment from Terry to make linguistic changes to clarify the bill.

Democrats said those changes were insufficient. Ultimately, all but two — Reps. Jim Matheson (D-Utah) and John Barrow (D-Ga.) — of the Democrats voting opposed the bill.

Subcommittee ranking member Jan Schakowsky (D-Ill.) said she hopes the members can reach a bipartisan compromise as the bill heads to the full committee.

Terry described the negotiations over the bill as ongoing.

“We all, of course, welcome any and all comments on this issue,” he said.

“We started in a bipartisan manner, and we’re going to continue that.”

According to a committee aide, there is no timeline for full committee consideration of the bill, as Terry is going to “continue to work with members and stakeholders to increase support for the bill.”