McCaskill introduces own legislation aimed at ‘bottom-feeder’ patent trolls

WASHINGTON (Legal Newsline) — Last week, U.S. Sen. Claire McCaskill introduced her own piece of legislation aimed at combating so-called “patent trolls.”

McCaskill

McCaskill, D-Mo., introduced the bill, the Transparency in Assertion of Patents Act, Thursday.

The senior senator argues that the measure — one of handful that have been introduced in recent months in an effort to crack down on trolls — will help cut down on consumer scams and better protect job opportunities.

The bill, co-sponsored by U.S. Sen. Jay Rockefeller, D-W.Va., has been referred to the Senate Commerce, Science and Transportation Committee, which Rockefeller heads. It is expected to be taken up Wednesday.

“Patent trolls are stifling innovation, endangering jobs, and harming businesses and consumers,” said McCaskill, who chairs the Senate Consumer Protection Subcommittee.

Generally speaking, a patent troll, or non-practicing entity or patent assertion entity, purchases groups of patents without an intent to market or develop a product.

In some cases, but not all, the entity then targets other businesses with lawsuits alleging infringement of the patents it bought.

McCaskill said her bill would empower the Federal Trade Commission by requiring minimum disclosures in letters sent by trolls to businesses that allege patent violations and make various demands — often referred to as “demand letters.”

Her legislation also would allow the FTC to specify for businesses exactly what constitutes a deceptive demand letter.

“Acting now and giving the FTC the tools it needs to properly address this serious problem will send a message to these bottom-feeders,” McCaskill said. “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.”

Rockefeller said the bill isn’t about patent law or patent rights, but about protecting unsuspecting victims from bad actors and their “despicable” behavior.

“I’m proud to join Sen. McCaskill in this effort to prevent predators from making a quick buck off of small businesses,” he said.

“By requiring transparency and basic, common sense disclosures, this bill cracks down on the commercial practice of mailing hundreds, if not thousands, of misleading letters that seek to extort money from small businesses.”

So far, the Innovation Act, introduced by U.S. Rep. Bob Goodlatte, R-Va., has gained the most traction in Congress. In December, the House passed it with overwhelming bipartisan support. However, it has been lingering for months in the Senate, where lawmakers are carefully considering it.

U.S. Sen. Patrick Leahy, D-Vt., introduced his own measure, the Patent Transparency and Improvements Act. The bill, considered by some to be a “less ambitious” version of the Innovation Act, was assigned to a congressional committee in November but has failed to move.

McCaskill’s bill follows the White House’s most recent push to curb trolls.

“Patent trolls are costing American businesses tens of billions of dollars a year,” she said. “That’s money that could be going to hiring new employees or expanding a business.

“While the administration and some states are taking steps to address the problem, only a federal law can provide the basic transparency small business owners need in these demand letters to determine whether they should be taken seriously, challenged or simply thrown in the trash.”

Last week, the Kentucky Senate passed its own patent troll bill. A similar bill passed out of the Oregon legislature last week, and is awaiting the governor’s signature.

From Legal Newsline: Reach Jessica Karmasek by email at patents@legalnewsline.com.