Demand Letter Legislation Will Help Protect Startups From Trolls

The Application Developers Alliance thanks Chairman Lee Terry (R-NE) for authoring legislation to protect innovators from abusive patent troll demand letters.

“Patent trolls use deceptive demand letters to extort unjustified payments from companies that cannot afford to fight back in court,” said Jon Potter, President of the Application Developers Alliance. “Although comprehensive patent reform legislation is still urgently needed, and developers nationwide were disappointed when the Senate postponed consideration of Chairman Leahy’s patent reform legislation, demand letter legislation will give innovators some critical relief.”

Chairman Terry’s bill accomplishes two important goals. The bill:

  • makes it a “bad faith” act (enforceable by the US Federal Trade Commission and state Attorneys General) for a troll to send clearly meritless patent demand letters; and
  • requires disclosure of basic information in demand letters, including specific details about the alleged infringement and how a product, software or service infringes.

Alliance staff has testified before the House Energy and Commerce subcommittee on Commerce, Manufacturing and Trade in May, and participated in several meetings chaired by subcommittee staff in June.