Engine is encouraged to see that Reps. Jared Polis, Tom Marino, and Ted Deutch have reintroduced their Demand Letter Transparency Act. This bill will bring much needed transparency to ambiguous demand letters that are used as a tool for extortion, often targeting the country’s smallest businesses and startups. A strong patent system requires robust public notice; this bill will ensure such notice by giving the targets of patent trolls the information they need when facing the very real and very serious threat of spurious patent litigation.
This bill does three key things:
- Requires that those entities sending a certain number of demand letters submit information regarding the letter and the patent of interest to the Patent and Trademark Office (PTO).
- Establishes a demand letter database at the PTO that would make letters publically accessible and searchable.
- Requires demand letters include some basic information, such as identifying and explaining how each patent and claim has been infringed.
Any comprehensive patent reform solution needs to include language that addresses the growing demand letter problem. This issue has been particularly problematic for startups and individuals who can’t afford an attorney to review such letters, which often cost upwards of tens of thousands of dollars - and that’s before even entering the courtroom. The Demand Letter Transparency Act is the best bill introduced so far to address the demand letter problem. However, the FTC and states also have a role to play in protecting consumers, and federal legislation must not preempt their ability to do so.
And, of course, demand letter legislation is no substitute for robust patent litigation reform, which will challenge the patent troll business model of using the high cost of litigation to force settlements. The Innovation Act introduced in the House would provide that comprehensive litigation reform, especially when coupled with the Demand Letter Transparency Act. And we call on the Senate to introduce a companion bill NOW. Startups have waited long enough for real relief.
Bill text can be found here.
