Last week, FTC Chairwoman Edith Ramirez announced that the FTC should use its authority under Section 6(b) of the FTC Act to study patent troll activities and pledged the FTC’s commitment to protecting small businesses from deceptive patent troll practices, by using its authority under Section 5 of the FTC Act.
Ramirez explained that the patent troll problem “isn’t just growing. It’s changing shape;” pointing out that “retailers and financial services providers that incorporate software into their products and services are now common targets” for patent troll lawsuits. She voiced her concern that these trolls may be using false claims to target small businesses to induce payment of illegitimate licensing fees. This happens when a troll asserts a patent that it “has no ownership interest in, or standing to assert, any patent rights; has only an expired patent; or makes false threats of litigation.”
For several years now, the FTC has played a crucial role in helping policymakers better understand the impact of patent troll behavior. The Chairwoman’s remarks were an encouraging sign that the FTC remains committed to shedding more light on the patent troll problem and potentially joining the battle against patent trolls by bringing enforcement actions against them under its existing consumer protection authority.
Senator Leahy, Chairman of the Senate Judiciary Committee, followed up with Chairwoman Ramirez in a letter urging the FTC to “more aggressively pursue enforcement actions against patent trolls under its existing consumer protection authority and create a website for small businesses to report abuse.” We join Chairman Leahy in urging the FTC to take action under Sections 6(b) and 5 of the FTC Act. In doing so, however, we do raise a cautionary flag — action by the FTC should not be cause to delay potential legislative action to address this growing and significant problem.
Keith Kupferschmid is General Counsel and SVP, Intellectual Property Policy & Enforcement at SIIA.