Bills
| 3.23.22

Cracking Down on Patent Trolls (H.R. 2045)

Do you support or oppose this bill?

What is H.R. 2045?

(Updated July 19, 2017)

This bill — the Targeting Rogue and Opaque Letters (TROL) Act — seeks to stop abusive patent letters. Specifically, threatening accusations sent to businesses, claiming that they have violated the rights of a patent holder, but have misleading information or fail to disclose key pieces of patent information. 

The people and companies who send the types of letters that this bill targets are known as ‘patent trolls’ — hence, "the TROL Act."

It would be considered an unfair or deceptive practice under the Federal Trade Commission Act if the sender of a letter says — in bad faith — that they have or will take legal action against the letter’s recipient, or they claim to hold the rights to the allegedly infringed patent. If you're not brushed up on your patent law — check out this podcast from This American Life for a refresher.

The letter’s sender also cannot seek compensation for things that happened after a patent expired, or for activities that the sender knew were legal and didn’t infringe the patent. Also, the sender must identify the person who holds the rights to the "infringed patent," specify which patent they're talking about, and what the letter’s recipient did to infringe the patent.

The maximum civil penalty for violating this Act would be $5 million. States would be prevented from bringing an action against a defendant who is the target of a pending federal action brought by the Federal Trade Commission (FTC).

Argument in favor

Businesses need to be protected from frivolous patent demand letters that have no legal basis and drain resources that could be used to further their business.

Argument opposed

People should have the right to protect their patents, so they can get paid for their innovations. Target the scammers, not the people seeking their fair share.

Impact

Patent trolls, large and small businesses that could be targeted by patent trolls, patent holders, the U.S. Patent and Trademark Office, legal systems and their employees all across the country.

Cost of H.R. 2045

A CBO cost estimate is unavailable.

Additional Info

In-Depth: In 2011 it was estimated that accusations by patent trolls cost U.S. businesses $29 billion in legal expenses and license fees. This does not include other costs like delays in new product releases, or the diversion of resources to battle claims.

Sponsoring Rep. Michael Burgess (R-TX) says that “this legislation takes on a costly scam that, by many accounts, continues to worsen.” The Chairman of the House Energy and Commerce Committee Rep. Fred Upton (R-MI) added that if this bill is passed, “when a patent troll sends abusive letters, we [will] provide tools to identify those letters and provide better enforcement.”

This bill was approved by the House Energy and Commerce Committee by a 30 to 22 vote. The Committee also states that organizations that support this legislation include the American Intellectual Property Law Association, the Innovation Alliance, and the American Conservative Union.


Media:


Summary by Eric Revell
(Photo Credit: Flickr user cali4beach)