About Those Proposed Government Demand Letter Requirements

This is sort of old news, in that the original story came out last year after a series of Senate hearings on patent trolls.  The government has proposed a set of rules that they want patent holders and their legal counsel to follow when sending out demand letters.  I don’t think they can make those requirements stick legally, nor would I necessarily want them to.

You’re shocked, I can tell.

Here’s my reasoning.  Well, wait a sec….first of all, here’s a cut and paste of what new legislation would require, from the EFF write up about it:

  • Require that demand letters contain certain basic information, such as a description of the patent at issue, a description of the product or service that allegedly infringes it, the names and contact information for the patent’s owners, and disclosures of ongoing reexaminations or litigations involving that patent.
  • Define as an illegal unfair or deceptive practice certain egregious behaviors, such as sending letters threatening litigation without a real intent to file litigation or sending letters that lack a reasonable basis in the law.
  • Explicitly give state attorneys general the power to to target similar bad behavior in their own states.
  • Allow the Federal Trade Commision to enforce these rules by levying penalties of $16,000 per each violation.

You know what all that information that sounds like?  That sounds like a lawsuit filing to me.  Demand letters are not lawsuits, and they shouldn’t be treated as such.  Now, I think that it would be wise to force trolls to include the patent number, you got me there.

The issue for me is that patent trolls are bullies, plain and simple.  I just happen to feel, very much like Elie Mystal over at Above the Law, that bullies ought to be handled by the bully-ee (and his posse, as necessary) rather than by the authorities.

It’s about information and education to me.  Teaching the general public how to handle these letters by a) collecting them in order to get research and report on the troll modus operandi and b) providing resources for companies when they do receive one.  The White House launched a website (complete with 1980’s clip art icons!) where people can go for resources when that happens.  That’s awesome and the appropriate response because it puts the power to decide if and how they will respond in the people’s hands where it belongs.

Let me tell a personal story here…my 5th grader was recently called a fata$$ on the playground.  It was during a pickup game of rugby (rugby?  wth??) wherein my guy landed on another guy during what all the witnesses say was a legitimate play.

rugbymud438

This is what the scene looked like in my head.

Well the guy he landed on didn’t think so and started with the hurling of insults.  My son, God love him, did not go running to the teacher.  He did not demand a hearing before a jury of his 11 yr old peers. He did not call me up from the nurse’s office in obvious emotional distress and demand that I sue the parents of the potty mouthed hooligan.  He did not start a petition to hang signs in the school yard, warning that trash-talk is illegal.  He simply stood up, said “WHAT’D YOU CALL ME??!!”, and proceeded to handle his business.  I’m not going to explain how because I don’t want a bunch of hate mail about how I taught my son to fight, even though it wasn’t really me so much as it was Peter Brady when he took out Buddy Hinton on behalf of Cindy.  Thanks, Brady Bunch reruns.

My point is, I think that the demand letters the trolls send are designed to be threatening and in many cases deceptive (and I do love that some of the states Attorneys General are going after the senders for it, because it’s after the letter’s been sent and completely appropriate).

I’m not as sure though, that the government ought to come in and tell people what they can and can’t put in a private letter to another company or individual.  Barring libelous statements, companies are within their rights to be a jerk and make threats.  And we, as citizens, are within our rights to build and deploy software solutions to combat those threats.  I don’t think that federal time and resources ought to  be spent on the problem at that stage of the game.

This post came out of a retweet by @GCToGo of a tweet by Cisco’s Mark Chandler (@ChandlerCisco).  Limiting myself to Twitter’s 144 characters is always at times painful for me, so this was one of those times it had to go to the blog.

Plus, what else is there to do on a cold, rainy Sunday but write about patent trolls?

That’s what I thought you’d say.

JustSayin_small_New

IPTT

{Fantastic rugby image found here.}

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3 thoughts on “About Those Proposed Government Demand Letter Requirements

  1. Good food for thought – to your points. FIrst off, re the state AGs, the only purpose is to ensure that they don’t inadvertently get preempted – so that should be something you like given that you “love that some of the states Attorneys General are going after the senders for it”; as to declaring “illegal unfair or deceptive practice certain egregious behaviors, such as sending letters threatening litigation without a real intent to file litigation”- this fits squarely within legal principles that don’t even protect litigation itself as a First Amendment-protected “petitioning” activity when it is sham. Finally, it’s important to note the proposals aren’t aimed at an individuals accusing a company like Cisco of infringement as a one-off, but rather at mass-efforts- very akin to restrictions on advertising speech that have long been accepted. Bottom line – – there may be policy reasons to allow the Innovatios and others to pursue the mass demand letter licensing strategy with impunity and no requirement for truth or transparency, but the legal objections fall short.

    • Thank you so much for weighing in! Believe me when I say, I can’t stand what these guys are doing. The MPHJs and Innovatios of the world are a nightmare. I just worry that any new laws created to curb their behavior would have the proverbial “unintended consequences”, and that the trolls would work that much harder to get around them anyway.

      I’m a staunch advocate of market-based solutions, and not solely because I am fronting one. We need consumer protection laws and we have them on the books and they’re being used appropriately by the AGs. Similarly, as you pointed out, we have things on the books that prevent/punish nuisance litigation, so let’s start start using those more often! Ditto the “loser pays” option…unless I understand things incorrectly (which is entirely possible), judges already have the ability to force losers to pay when the lawsuit is frivolous. So do we need to actually build that into a *new* law?

      “there may be policy reasons to allow the Innovatios and others to pursue the mass demand letter licensing strategy with impunity and no requirement for truth or transparency, but the legal objections fall short.”

      See, this is where getting that law degree would have helped me, right? =)

  2. If the following is true:

    http://overlawyered.com/2014/01/16000-demand-letters-17-agreements-pay/

    then MPHJ sent letters to 16,465 small businesses nationwide and got only 17 licenses. So perhaps the true cost is that of having small businesses having the distraction of time to contact and possibly pay for attorneys to give them advice which may have been to ignore the letter. If that is the case, then the least expensive solution would be to educate small businesses (and others) to treat demand letters when they are on the face confusing and incomplete or appear baseless the same way they treat spam E-mail (including those Nigerian bank transfer opportunities) that are deleted without response.

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