U.S. House Committee Holds Hearing on Abusive Patent Demand Letters

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On April 8, 2014, the U.S. House Committee on Energy & Commerce, Subcommittee on Commerce, Manufacturing, and Trade held a hearing “Trolling for a Solution: Ending Abusive Patent Demand Letters.”  The purpose of the hearing was to discuss ways to balance the need to curb the increasing abuse of patent demand letters by “bad actors” with protecting the legitimate interest that entities with patent holdings have in using demand letters “to engage other companies in lawful and productive discussions around their businesses.”  The hearing background memo explains that the House passed H.R. 3309, The Innovation Act in December 2013 with provisions that explicitly address demand letters by “lay[ing] out specific requirements that must be included in a demand letter if a claimant intends to use receipt of the letter by a defendant as evidence of willful infringement.” While the Subcommittee describes the Innovation Act as “includ[ing] a sense of Congress that ‘purposely evasive demand letters to end users’ are an abuse of the patent system, and that demand letters should include ‘basic information’ about the patent,” questions remain regarding legislating requirements for demand letters.  The specific questions posed by the Subcommittee to stakeholder witnesses for discussion at this hearing included:

  • What are examples of activities engaged in by PAEs that constitute outright fraud?
  • What elements or claims could be required for inclusion or exclusion in a demand letter?
  • What differentiates legitimate demand letters from abusive letters?
  • What are the possible negative unintended consequences on legitimate businesses of such requirements or exclusions of elements or claims in demand letters?
  • Are there any First Amendment implications of requiring the inclusion or exclusion of any language in demand letters?

The background memorandum, witness testimony, and webcast of the hearing can be found here.

Topics:  Abuse of Process, Patent Litigation, Patent Trolls, Patents

Published In: Civil Procedure Updates, General Business Updates, Constitutional Law Updates, Elections & Politics Updates, Intellectual Property Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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