The Law of the Land

• Jurisdiction: United States,Federal
• Author: Derrick Brent
• Publication year: 2014
• Citation: Vol. 39 No. 3

The Law of the Land

Derrick Brent

Masimo Corporation

SUMMARY OF THE TARGETING ROGUE AND OPAQUE LETTERS ACT (TROL ACT)

Recently, the House Subcommittee on Commerce, Manufacturing and Trade began consideration of a bill entitled "The Targeting Rogue and Opaque Letters Act of 2014" ("TROL Act"). The bill is the latest effort in patent reform legislation, and is intended to address the practice of sending fraudulent or deceptive patent demand letters. Generally, the bill would provide the Federal Trade Commission with authority to bring actions against those sending such letters. The bill would also provide a state Attorney General with the power to bring actions under this statute on behalf of residents of the state.

Specifically, the bill has three main sections: (1) unfair or deceptive practices in connection with asserting a patent; (2) enforcement authority of the FTC; and (3) preemption of state laws.

Under Section 2, the bill prohibits the pattern or practice of sending written communications that contain bad faith allegations of patent infringement that misrepresent ownership of the patent, civil actions against others, licenses or threat of legal action. The bill also prohibits the pattern or practice of sending written communications seeking compensation for expired or unenforceable patents, or authorized licensed activities. It would become unlawful in such communications to omit the identity and contact information for the asserting person or entity; identity of the patent being asserted; descriptions of infringing product and how the patent is infringed. Statements, representations or omissions made in "good faith" are an affirmative defense to these claims.

Under Section 3 of the bill, the FTC is provided with the authority to bring claims for violating the TROL Act under its current powers.

Under Section 4, the TROL Act preempts all state laws dealing with communications related to patent rights. However, a state Attorney General is provided with authority to bring a claim under the Act on behalf of residents of the state, up to $5 million, provided the state Attorney General notifies the FTC prior to filing (if practicable) and the FTC does not have a prior action pending. The provisions do not prevent state Attorneys General from conducting investigations into these matters.

Supporters of the bill say it is a narrowly and targeted...