Andrew Baluch

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Patent Legislation Gives FTC Power to Regulate Demand Letters

Sen. McCaskill introduced S. 2049 in February 2014 which would require the FTC to promulgate rules to prohibit unfair and deceptive acts and practice in the sending of patent demand letters, including requiring each such letter to identify the patent number, the claims, a description of the manufacturer and model number of each accused product or service, notice that the recipient may have the right to have the manufacturer defend against the infringement, the identity of the person with the right to enforce (including each owner, co-owner, assignee, exclusive licensee, and entity with the authority to enforce the patent, and the ultimate parent entity), any FRAND licensing commitments, any basis for a specific license amount, and each PTO proceeding or litigation involving the patent. Bad faith assertion would be enforceable by the FTC or attorney general of a State in federal court.

Patent Legislation Compared: Joinder of Interested Parties

Opponents of the rule point out that it could lead to unwilling and unnecessary joinder — a point raised particularly by universities and venture capitalists who fear they may be hauled into costly patent litigation against their will if their licensees/startups ever need to enforce their patent rights in court. Still others point to the fact that these joinder provisions would only apply to patent cases — and only against plaintiffs — and would thus create a litigation process unique to patents in district courts. Furthermore, district court judges would lose most of their existing broad discretion to determine whether the facts truly warrant joinder in each unique case.