11.06.14

Judiciary Chairman Leahy, On Today’s FTC Settlement Concerning Patent Demand Letters

[The Federal Trade Commission on Thursday announced a settlement agreement with MPHJ Technology Investments LLC and its law firm concerning charges that they made deceptive claims and false legal threats in letters that accused thousands of small businesses around the country of engaging in patent infringement. The FTC settlement bars the company and its law firm from making deceptive representations when asserting patent rights. Judiciary Committee Chairman Patrick Leahy (D-Vt.) introduced bipartisan legislation last year with Senator Mike Lee (R-Utah) that among other things targets the widespread sending of fraudulent or materially misleading demand letters. That provision was a key feature of broader patent troll legislation Leahy negotiated with other Senators earlier this year.]

“These steps taken by the FTC will stop one notorious patent assertion entity from using misleading demand letters to harass small businesses in Vermont and across the country, but this action alone with not stop abuse the patent system.  The demand letter provision I included in the bipartisan Patent Transparency and Improvements Act would have empowered the FTC to seek meaningful monetary penalties from bad actors, which is an important deterrent for misconduct.  Small businesses should be able to focus on their work and on their customers — not frivolous exploitation schemes.  I am committed to addressing the problem of patent trolls through legislation in the coming year, including a strong provision to address deceptive demand letters.”  

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