House legislations to cut down on abusive patent demand letters cleared another hurdle Wednesday when it was approved by the House Energy and Commerce Committee.
The legislation, approved 30-20, is meant to cut down a major weapon of so-called patent trolls, who buy up patents with the intent of scoring a payout with the threat of sometimes frivolous lawsuits.
{mosads}Chairman Fred Upton (R-Mich.) acknowledged the bill is not perfect but said there will be time to hash out changes before it hits the floor.
“We are not quite there yet, but I am certainly led to believe that we have a good amount of time before this bill will reach the floor, which will allow us to work in earnest to find an agreement that all of us I think can support,” he said.
That led Rep. Frank Pallone (N.J.), the ranking Democrat on the committee, to question why it was necessary to pass the bill Wednesday.
The Targeting Rogue and Opaque Letters (TROL) Act would establish more disclosure requirements in patent demand letters and would give the FTC the power to fine companies that send abusive letters.
The legislation has won praise from groups the Innovation Alliance and the Coalition for 21st Century Patent Reform.
But some lawmakers and trade groups, representing retailers and technology companies, have taken issue with a few provisions of the bill, arguing they would put too much of a burden on the FTC by forcing the agency to prove that abuse was made in bad faith and is part of a pattern.
Rep. Michael Burgess (R-Texas), who leads the subcommittee with jurisdiction, has argued making those changes — particularly removing the “bad faith” clause — could bring up First Amendment challenges.
Democrats and other advocates have also opposed a provision that would require federal law to trump state laws. There are currently more than 20 state laws regulating demand letters, and some advocates say the federal legislation should act as a baseline that can be strengthened.
The bill is only a portion of patent reform lawmakers are hoping to push through. A broader bill in the House Judiciary Committee would make a number of changes to patent litigation practices.
Senate lawmakers introduced their own broad patent reform bill Wednesday as well.