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The Truth Behind Patent Trolls Issue Brief (view source)
Revision as of 14:05, 6 April 2016
, 14:05, 6 April 2016→Do we need to empower the FTC?
Legislators propose granting the Federal Trade Commission (FTC) more power to enforce demand letters and curb patent troll activity. However, their efforts are misguided given that the Federal Trade Commission has already demonstrated willingness and ability to address patent trolls. In the 2014 investigation regarding MPHJ Technology Investments, LLC, the FTC found more than 16,000 demand letters sent to small businesses. Subsequently, the FTC prohibited MPHJ from asserting "false or unsubstantiated representations" regarding a patent's licensing activity or the potentiality and imminence of a lawsuit. [https://www.ftc.gov/system/files/documents/cases/150317mphjtechdo.pdf] However, the FTC did not award any damages to small businesses that fell victim to this patent troll.
Authors of legislation such as the [[Targeting Rogue and Opaque Letters (TROL) Act]] and the [[STRONG Patents Act]] may argue that their proposed legislation creates more power for the FTC to determine "bad faith" demand letters. Bad faith refers to "'clear and convincing evidence' that the infringement assertions are 'objectively baseless' to avoid dismissal on summary judgment or a motion to dismiss." [http://patentlyo.com/patent/2013/05/what-is-happening-in-vermont-patent-law-reform-from-the-bottom-up.html] However, determining the nature of bad faith demand letters sets an unreasonably high standard for the FTC to meet. In order to meet this standard, the FTC would have to enter into the demand letter author's state of mind and determine that the author's assertions are "objectively baseless."
==Recommendations on Curbing Patent Troll Activity==
