House E&C Subcommittee Examines Patent Demand Letter Issue

April 10, 2014

pic-patent-licenseOn Tuesday, April 8, the House Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade held a hearing entitled “Trolling for a Solution: Ending Abusive Patent Demand Letters.” The purpose of this hearing was to discuss the practice of bad faith demand letters and how to strike the proper balance between bad actors who abuse the system and legitimate small businesses and individual inventors who depend on it, and their ability to assert their patent rights to grow and expand their firms.

According to the Majority’s Hearing Memo, below were the primary questions that were addressed:

– What are examples of activities engaged in by PAEs that constitute outright fraud?

– What elements of claims could be required for inclusion or excision 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 exclusion 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.

While NSBA’s members have remained divided on several of the more controversial provisions in the various patent litigation reform measures that have moved forward this Congress, they were able to agree to support prudent efforts to curb the practice of sending bad faith demand letters. Therefore, NSBA appreciates the Subcommittee’s further research and analysis into this key issue.