WASHINGTON – Yesterday, the House Energy and Commerce Subcommittee on Commerce, Manufacturing and Trade marked up and favorably reported the Targeting Rogue and Opaque Letters Act (TROL Act), draft legislation seeking to curtail the abuses of so-called patent trolls, which send vague and deceptive patent demand letters to main street businesses to squeeze them for money.

Many times, convenience store owners and other retailers, the “end-users” of technology products (such as Wi-Fi or credit card processing technology), are the targets of patent trolls seeking to scare companies into quick settlements or licensing agreements. Demand letters alleging patent infringement are often threatening and vague, and companies frequently find it less costly to pay the patent troll a settlement or licensing fee rather than chance having to engage in an expensive court battle.

The subcommittee considered three amendments during the mark up, ultimately adopting only one amendment, which was offered by Chairman Michael Burgess (R-TX) and supported by both parties. That amendment, which passed by voice vote, would alter the bill’s “affirmative defense” provision, removing a loophole that would have allowed a patent troll to avoid liability for sending abusive demand letters by showing evidence of sending some non-abusive letters in the past. Later in the markup, Burgess introduced and withdrew an amendment that would establish a “presumption of bad faith” if the sender of a demand letter refuses to respond to a recipient’s requests for additional information.

Ranking Member Jan Schakowsky (D-IL) and Rep. Joe Kennedy (D-MA) each offered amendments that would further empower the Federal Trade Commission to bring enforcement actions against patent trolls, make it easier to prove that a patent troll is acting in bad faith, and permit states to continue to police against trolls. Both amendments were unsuccessful, however.

Despite the efforts of the United for Patent Reform Coalition, of which NACS is an executive member, to work with the subcommittee before the mark up to strengthen the provisions of the bill, the draft legislation remained inadequate — and the coalition sent a letter to the Subcommittee opposing the TROL Act explaining that the draft “falls short” of fixing the problem of abusive demand letters.

The subcommittee favorably reported the bill on a straight party line vote – 10 Republicans in favor and seven Democrats opposed. Burgess noted that policymakers will continue to work to strengthen the legislation and called on stakeholders to “come to the table.” The full committee tentatively plans to take up the bill next week, but it is unclear whether it will stick to that schedule.