From the Alliance

Innovation Alliance Letter to House Energy & Commerce Committee Leadership Supporting the Targeting Rogue and Opaque Letters (TROL) Act

April 29, 2015

The Honorable Fred Upton
Chairman
Energy & Commerce Committee
United States House of Representatives
Washington, D.C. 20510

The Honorable Frank Pallone, Jr.
Ranking Member
Energy & Commerce Committee
United States House of Representatives
Washington, D.C. 20510

Dear Chairman Upton and Ranking Member Pallone:

On behalf of the Innovation Alliance, I write in support of the Targeting Rogue and Opaque Letters Act of 2015. The Innovation Alliance is a coalition of research and development-based technology companies representing innovators, patent owners, and stakeholders from a diverse range of industries. We would like to thank you for your leadership of this Committee in advancing and protecting America’s unparalleled innovation economy. As entrepreneurship is the driving force behind our nation’s economic prosperity, we believe the TROL Act is a critical step forward in combatting abusive patent demand letters while protecting innovation and job growth.

Through the mass mailing of bad faith demand letters, some bad actors have abused an otherwise legitimate patent enforcement practice for the purpose of extracting payment from small “mom and pop” businesses and other groups of people generally unfamiliar with the patent system. The TROL Act provides a cohesive and uniform enforcement mechanism to addressing the problem of abusive demand letters, especially in light of the current patchwork of more than twenty state-specific laws, while respecting legitimate patent-related communications.

Several features of the current version of the TROL Act are critical to maintaining the proper balance achieved by this bill. First, the “pattern or practice” requirement appropriately targets the mass mailing of deceptive demand letters. Moreover, this requirement is consistent with the FTC’s existing Section 5 authority, which only permits enforcement actions that are in the public interest. Elimination of this pattern or practice requirement would expose patent owners to abusive threats of enforcement, particularly by large infringers who could use the potential of federal and state enforcement to chill enforcement of patent rights.

Second, the “bad faith” requirement is commanded by the Constitution. As courts across the country have recognized, pre-lawsuit demand letters implicate both the freedom of speech and the constitutional right to petition the government. To conform with the Constitution, legislation must avoid punishing patent holders for good faith conduct. Relatedly, the affirmative defense provision furthers the important goal of protecting good faith actors from liability based on innocent mistakes and bona fide errors.

Third, the bill does not impose overly burdensome disclosure requirements. For example, the TROL Act properly requires that a demand letter sender, if reasonable under the circumstances, identify at least one patent claim. While some opponents of the TROL Act call for demand letters to identify all allegedly infringed claims, such a standard would be unreasonable and unfair, as many patent owners may not know all claims of a patent that are infringed until after getting information from the infringer during discovery.

Finally, the TROL Act sets a uniform federal standard for enforcement of a federal right – a patent – while preserving the authority of the states to take enforcement actions of their own. State attorneys general can enforce their own existing mini-FTC Acts as well as the provisions of the TROL Act, including seeking civil penalties for violations. The bill also permits states to pursue other state laws of general applicability, such as state consumer protection laws.

Patents are essential to incentivizing invention, investment, research and development, and job growth. By appropriately targeting abusive behavior while maintaining the integrity of legitimate patent enforcement practices for all patent holders, the TROL Act offers a balanced solution to the proliferation of abusive demand letters. We commend your leadership on this issue to date and ask you to continue your support by advancing its timely passage.

Respectfully,

Brian Pomper
Executive Director
Innovation Alliance

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