Washington, DC – U.S. Senator Amy Klobuchar (D-MN) today called on the Administration to address concerns over “patent trolls” that stifle innovation and hurt the economy. Patent Assertion Entities, or “patent trolls,” abuse patent litigation to threaten companies and extract settlements based on questionable claims. In a letter to the Federal Trade Commission (FTC), Klobuchar underscored the negative impact patent trolls can have on companies and consumers and called on the FTC to examine whether certain patent assertion entities violate FTC rules and are eligible for enforcement actions. Klobuchar, who chairs the Subcommittee on Antitrust, Competition Policy, and Consumer Rights, will hold a hearing on issues related to the intersection of antitrust and patent law in July.
“From the Post-it Note to the Pacemaker, intellectual property is critical to the success of businesses in Minnesota and across the country,” Klobuchar said. “But too many bad actors are bringing up frivolous patent claims, creating a drag on innovation for companies of all sizes. I will continue to fight to improve our patent system and ensure that it is used to promote innovation and protect intellectual property.”
Klobuchar has been a leader in helping to promote innovation, including cosponsoring the America Invents Act, which was passed into law in 2011. The bill included key reforms to increase speed and certainty in the patent application process, enhance the quality of patents, and help the U.S. Patent and Trademark Office be more responsive to innovators. Prior to the passage of the bill, U.S. patent laws hadn’t been overhauled since 1952, which helped lead to a backlog of over 700,000 patent applications – potentially delaying groundbreaking innovations from coming to the market.
The full text of the letter is below:
The Honorable Edith Ramirez, Chairwoman
The Honorable Julie Brill, Commissioner
The Honorable Maureen K. Ohlhausen, Commissioner
The Honorable Joshua D. Wright, Commissioner
Federal Trade Commission
600 Pennsylvania Ave. NW
Washington, DC 20580
Dear Chairwoman Ramirez and Commissioners Brill, Ohlhausen, and Wright:
As Chairman of the Subcommittee on Antitrust, Competition Policy and Consumer Rights, I am writing to urge you to use the Federal Trade Commission’s antitrust and consumer protection authority to address the abusive practices of patent assertion entities (PAEs) that are a drag on innovation, competition, and our economy.
I appreciate Chairwoman Ramirez’s intention to ask the full Commission to commence a study under Section 6(b) of the Federal Trade Commission Act (FTC Act) and I urge the Commission to quickly approve the study. Should the study find PAE violations of the FTC Act’s prohibitions against “unfair methods of competition” or “false or deceptive acts or practices”, the Commission should promptly bring enforcement actions.
Additionally, the Commission should immediately consider enforcement actions against PAE conduct that targets end-users of patents. Specifically, I urge you to examine the conduct of PAEs that have been targeting end-users of commonly used technology, including Wi-Fi and document scanning, with threatening letters. Thousands of these letters have been sent to end-users including retailers, non-profit organizations, restaurants, and hotels, to name a few, claiming infringement of an unspecified patent and demanding royalty payments under the threat of a lawsuit. Ultimately, consumers suffer because of this conduct. Businesses will either be discouraged from using and offering more innovative products and services, or they will have no choice but to pass their higher costs on to consumers.
In the face of the proliferation of behavior exhibited by PAEs that is anti-consumer and harmful to innovation, American businesses and consumers need the Commission to actively engage in this issue. I look forward to working with you to protect competition and consumers.