Senate Bill Targeting Patent Trolls on Fast Track

Would affirm FTC authority to crack down on deceptive demand letters

While patent reform advocates wait for the Senate Judiciary Committee to move a comprehensive bill to crack down on patent trolls, another bill providing some limited relief is moving fast in the Commerce Committee.

On Thursday, Sen. Claire McCaskill, chairman of the consumer protection subcommittee, introduced a bill to make vague patent troll demand letters more transparent. By the end of the day, the bill, co-sponsored by Sen. Jay Rockefeller (D-W.Va.), chairman of the Senate Commerce Committee, put it on the committee's schedule to take up next Wednesday.

Congress doesn't have much time left before lawmakers begin to leave town to campaign, so moving fast is the name of the game. Because patent troll legislation has so much support from the White House down to both sides of the aisle, it's a likely candidate for swift action.

McCaskill's bill, the Transparency in Assertion of Patents Act, addresses threatening and often deceptive demand letters from patent assertion entities that have plagued tens of thousands of advertisers, agencies, retailers and other small businesses by giving more authority to the Federal Trade Commission to require minimum disclosure requirements in the letters.

Faced with the demand letters that provide little information about who owns the patent or what patent is being violated, businesses usually just pay the fee demanded rather than accrue what could be exorbitant costs in discovery and legal fees.

"Acting now and giving the FTC the tools it needs to properly address this serious problem will send a message to these bottom-feeders; they will understand that we plan to do whatever it takes to protect American consumers and small businesses from scam artists trying to make a quick buck," McCaskill said in a statement.

Just last week, the White House called on the Senate to catch up to the House and "finish the job" on patent troll legislation. Senate judiciary chairman Patrick Leahy (D-Vt.) could be close to holding a hearing and moving a bill this spring. But since the commerce committee has jurisdiction over the FTC, it can move now with its targeted bill.

"The judiciary bill is a fine bill and it will do a lot; but demand letters is what it's all about for advertising agencies," said Dick O'Brien, evp for the 4A's. "Both bills are great."