News Feature | July 15, 2014

House Subcommittee Pushes ‘Patent Troll' Bill Forward

By Nick Otto

A House of Representatives panel has approved a draft of a bill that would rein in abusive patent demand letters.

On Thursday, the Subcommittee on Commerce, Manufacturing, and Trade approved the Targeting Rogue and Opaque Letters Act, or TROL Act, by a bipartisan vote of 13 to six.

The draft bill offers “a balanced solution to address abusive patent demand letters and is the product of months of bipartisan negotiations amongst members and stakeholders,” the Energy and Commerce Committee says.

The legislation is intended to protect companies from “patent trolls” while maintaining the rights of patent holders to legitimately protect their intellectual property through increased transparency and accountability on patent demand letters. It also increases the Federal Trade Commission’s (FTC) authority to levy fines.

The bill has provoked controversy because it would allow the FTC to pursue companies that are dishonest in demanding licensing for patents, but only if it can prove bad faith — essentially making it more difficult for the agency.

The Electronic Frontier Foundation, while pleased that Congress is taking action, says the bill isn’t enough.

“Many of the strongest opponents of patent reform are supporting the TROL Act,” the group said recently. “We suspect this is not because they care about the bill itself. Rather, they are hoping that this bill will provide political cover — an illusion of action — that they can use to frustrate broader reform.”

The Medical Device Manufacturers Association has also urged Congress and other stakeholders to address provisions in the draft legislation that the group says could harm small medical technology innovation.

“Provisions of the proposed legislation would thwart the development of medical treatments and the lifesaving technologies of tomorrow,” the group said late last year.

Some organizations, such as the Biotechnology Industry Organization (BIO), are lauding the bill, Law360 says. BIO on Thursday said “the bill creates ‘a balanced approach’ that will cut down on false statements in letters while allowing legitimate companies to enforce their patents.”