06.20.13

Leahy Urges FTC To Act Against Patent Trolls

WASHINGTON (Thursday, June 20, 2013) –Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) Thursday urged the Federal Trade Commission to more aggressively pursue enforcement actions against patent trolls under its existing consumer protection authority and create a website for small businesses to report abuse.  The letter follows a hearing in April in which Chairman Leahy asked Chairwoman Ramirez about the FTC’s authority to prevent abusive behavior. 

In a letter to FTC Chairwoman Edith Ramirez, Leahy observed, “Abusive behavior by some holders of low-quality patents continues to impede innovation and harm small businesses and consumers in Vermont and across the country.”

“I am writing to encourage the FTC to prioritize investigations of and enforcement actions to prevent unfair and deceptive trade practices in patent infringement allegations,” Leahy wrote.  “The situation is particularly egregious when a patent owner sends numerous demand letters threatening an infringement action without having made a reasonable inquiry into the claims, and therefore having no actual intent to file a civil action, for which the owner would be subject to sanctions.  These letters are simply used to extract unwarranted payments.”

Leahy will soon introduce legislation to ensure American retailers and innovating businesses are not impeded by misuse of the patent system.  Leahy last month hailed a discussion draft release by House Judiciary Committee Chairman Robert Goodlatte (R-Va.) and said he intends to work in a bipartisan, bicameral way to address this important issue this Congress.  Leahy two years ago led in shepherding through the Senate the landmark Leahy-Smith America Invents Act, the most sweeping reforms and updating of U.S. patent laws in 50 years. 

A copy of the letter to FTC Chairwoman Ramirez can be found online, and below.

# # # # #

 

June 20, 2013

The Honorable Edith Ramirez

Chairwoman

Federal Trade Commission

600 Pennsylvania Avenue, N.W.

Washington, D.C. 20580

Dear Chairwoman Ramirez:

Abusive behavior by some holders of low-quality patents continues to impede innovation and harm small businesses and consumers in Vermont and across the country.  We must combat the abusive behavior to preserve and advance the patent system envisioned by the founders and provided for in our Constitution.

In April, you testified before the United States Senate Committee on the Judiciary’s Subcommittee on Antitrust, Competition Policy, and Consumer Rights.  In a question for the record following the hearing, I asked whether the Federal Trade Commission (FTC) has the authority under the consumer protection laws to combat patent assertion entities that make unsubstantiated infringement claims, and whether you would take appropriate action to address this abusive behavior.  You responded that the FTC does, and that the FTC would use its authority to prevent harmful practices by patent assertion entities. 

I am writing to encourage the FTC to prioritize investigations of and enforcement actions to prevent unfair and deceptive trade practices in patent infringement allegations.  The situation is particularly egregious when a patent owner sends numerous demand letters threatening an infringement action without having made a reasonable inquiry into the claims, and therefore having no actual intent to file a civil action, for which the owner would be subject to sanctions.  These letters are simply used to extract unwarranted payments. 

I also encourage the FTC to create on its website a user-friendly page through which small businesses and other targets of trolling activity can report it to the FTC to seek relief where appropriate.   

While I continue to work on bipartisan legislation to combat patent trolling, I encourage you to use aggressively the consumer protection and competition laws already in place that will bolster the American economy and ensure the patent laws are used to encourage invention, not to impede innovation. 

Sincerely,

_______________________                                     

PATRICK LEAHY     

Chairman

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