69–006 

114TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 114–877 

TARGETING ROGUE AND OPAQUE LETTERS ACT OF 2015 

DECEMBER 16, 2016.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. UPTON, from the Committee on Energy and Commerce, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 2045] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Energy and Commerce, to whom was referred 

the bill (H.R. 2045) to provide that certain bad faith communications in connection with the assertion of a United States patent are 

unfair or deceptive acts or practices, and for other purposes, having 

considered the same, report favorably thereon without amendment 

and recommend that the bill do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 2 

Background and Need for Legislation .................................................................... 3 

Hearings ................................................................................................................... 5 

Committee Consideration ........................................................................................ 6 

Committee Votes ...................................................................................................... 6 

Committee Oversight Findings ............................................................................... 10 

Statement of General Performance Goals and Objectives .................................... 10 

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 10 

Earmark, Limited Tax Benefits, and Limited Tariff Benefits ............................. 10 

Committee Cost Estimate ....................................................................................... 10 

Congressional Budget Office Estimate ................................................................... 10 

Federal Mandates Statement ................................................................................. 11 

Duplication of Federal Programs ............................................................................ 11 

Disclosure of Directed Rule Makings ..................................................................... 12 

Advisory Committee Statement .............................................................................. 12 

Applicability to Legislative Branch ........................................................................ 12 

Section-by-Section Analysis of the Legislation ...................................................... 12 


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1See Trolling for a Solution: Ending Abusive Patent Demand Letters: Hearing before the 

Subcomm. on Commerce, Manuf., and Trade, 113th Cong. 5 (statement of Rheo Brouillard on 

behalf of American Bankers Association) (describing a patent demand letter received by several 

banks claiming that their ATMs infringed a patent held by the sender, and that the sender researched the alleged infringement, even though at least one recipient bank did not operate any 

ATMs). 2See MPHJ Technology Investments, LLC, Fed. Trade Comm’n, Proposed Consent Agreement 

(adopted Nov. 6, 2014), available at http://www.ftc.gov/system/files/documents/cases/ 

141106mphjagree.pdf. 3For an example of how a court has treated the concept of ‘‘pattern or practice’’ in the FTC 

Act, see Tennessee v. Lexington Law Firms, 1997-1 Trade Cas. (CCH) P71,820, 9-10 (M.D. Tenn. 

1997) (‘‘Here, the complaint indicates that the Tennessee attorney general’s alleged discovery 

that one or two violations have already been committed gave it reason to believe that Defendant 

was or is engaged in a pattern or practice of committing such violations. As such, Defendant’s 

argument [that, as a matter of law, the Tennessee attorney general had no reason to believe 

a pattern or practice existed] cannot prevail.’’). Although the statute at issue in Tennessee is 

further tempered by requiring only that a State attorney general have a ‘‘reason to believe’’ that 

a defendant is engaging in a pattern or practice—which is not present in H.R. 2045—H.R. 2045 

Changes in Existing Law Made by the Bill, as Reported ..................................... 13 

Dissenting Views ..................................................................................................... 14 

PURPOSE AND SUMMARY

The purposes of H.R. 2045 are: (1) to prevent anyone from coercing or deceiving victims into paying license fees or settlements 

based on spurious claims or meritless suggestions of patent infringement in written communications; and (2) to ensure that recipients of such communications receive enough information regarding the patent and corresponding allegations such that a recipient can begin to determine whether the letter identifies a legitimate patent claim. H.R. 2045 applies specifically to a ‘‘pattern or 

practice’’ of sending written communications in connection with the 

assertion of a United States patent. Such written communications 

are commonly referred to as patent demand letters. 

H.R. 2045 authorizes the Federal Trade Commission (FTC) to 

seek civil penalties for two types of deceptive behavior with respect 

to a pattern or practice of sending patent demand letters. First, 

H.R. 2045 prohibits a sender of a patent demand letter from making any of a list of specific false statements or representations. 

These prohibitions correspond to specific misrepresentations observed in practice that may intimidate unsophisticated patent demand letter recipients into entering settlement agreements despite 

a lack of merit or the use of deception in the underlying allegations 

in the patent demand letters.1 Second, H.R. 2045 prohibits a sender of a patent demand letter from omitting any of a series of required disclosures. By requiring disclosures, H.R. 2045 seeks to 

prevent a sender from withholding information that is essential for 

a recipient to fairly make an independent determination of the patent demand letter’s merits. H.R. 2045 is not intended to sweep in 

patent communications, including demand letters, between sophisticated patent holders with large patent portfolios. 

Instances of abusive demand letter practices involving the sending of only a few patent demand letters may occur, but are not 

prevalent in the record. Those responsible for the abusive patent 

demand letters covered by H.R. 2045 send large numbers of such 

letters in hope of deceiving a portion of the recipients of those letters.2 The scheme is dependent on volume, so H.R. 2045 is limited 

to situations where repeated behavior is demonstrated. Nonetheless, the term ‘‘pattern or practice’’ is intentionally undefined to 

give the FTC leeway in determining the threshold, which the Committee recognizes will be a context-driven determination.3


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is nonetheless intended to grant similar discretion to the FTC on pattern or practice determinations. 4See Trolling for a Solution: Ending Abusive Patent Demand Letters: Hearing Before the 

Subcomm. on Commerce, Manuf., and Trade, 113th Cong. (2014), H.R. ll, a bill to enhance 

federal and state enforcement of fraudulent patent demand letters: Legislative Hearing before the 

Subcomm. on Commerce, Manuf., and Trade, 114th Cong. (2014), Update: Patent Demand Letter 

Practices and Solutions: Hearing Before the Subcomm. on Commerce, Manuf., and Trade, 114th 

Cong. (2015), H.R. ll, Targeting Rogue and Opaque Letters (TROL) Act: Legislative Hearing 

Before the Subcomm. on Commerce, Manuf., and Trade, 114th Cong. (2015). 5 H.R. ll, the Targeting Rogue and Opaque Letters (TROL) Act: Legislative Hearing Before 

the Subcomm. on Commerce, Manuf., and Trade, 114th Cong. 13 (2015) (statement of Charles 

Duan, Director, Patent Reform Project, Public Knowledge). 6 Alabama, Georgia, Idaho, Illinois, Louisiana, Maine, Maryland, Mississippi, Missouri, New 

Hampshire, North Carolina, North Dakota, Oklahoma, Oregon, South Dakota, Tennessee, Utah, 

Vermont, Virginia, Washington, and Wisconsin. 

BACKGROUND AND NEED FOR LEGISLATION

Businesses and consumers across the nation have been victimized on a large scale by patent holders who misled them with 

vague and deceptive demand letters into paying undue license or 

settlement fees.4 These types of scams typically, but not always, 

target end users of patented technology with little patent expertise 

or for whom the cost of defending against the letter exceeds the 

business’ resources, forcing it to pay the sender, regardless of 

whether the underlying claim is meritorious. 

A violation of H.R. 2045 is treated as a violation of a Federal 

Trade Commission rule defining an unfair or deceptive act or practice prescribed under 15 U.S.C. § 57a(a)(1)(B). As a result, a violation of H.R. 2045 is punishable by civil penalties as provided at 15 

U.S.C. § 45(m). 

H.R. 2045 provides an affirmative defense for defendants to show 

that alleged violations of the Act were actually mistakes made in 

good faith. The affirmative defense allows defendants to show that 

its allegedly unlawful statements, representations, or omissions 

were mistakes made in good faith, which may be demonstrated by 

a preponderance of evidence that the violation was not intentional 

and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error. 

The affirmative defense in H.R. 2045 mirrors the operative language of the affirmative defense in the Fair Credit Reporting Act.5

The burden of production and persuasion with respect to the affirmative defense is on the accused sender of the patent demand 

letter, and in order to meet that burden, the sender must show 

that a procedure reasonably adapted to avoid the error was in place 

when the error was made. 

H.R. 2045 preempts any law, rule, regulation, requirement, 

standard, or other provision having the force and effect of law of 

any State, or political subdivision of a State, expressly relating to 

the transmission or contents of communications relating to the assertion of patent rights. When the Committee reported H.R. 2045, 

over twenty State statutes expressly relating to patent demand letters had been enacted 6 and several States were considering similar 

bills. Importantly, however, H.R. 2045 bars a court from construing 

the preemption provision to preempt any State consumer protection 

law, any State law relating to acts of fraud or deception, and any 

State trespass, contract, or tort law. As a result, H.R. 2045 has no 

effect on State consumer protection statutes—often referred to as 

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7 Illinois, Oklahoma, Tennessee, and Wisconsin. 

8See, e.g., H.B. 1163, 64th Leg. (ND 2015). 9 Update: Patent Demand Letter Practices and Solutions: Hearing Before the Subcomm. on 

Commerce, Manuf., and Trade, 114th Cong. 12 (2015) (statement of Paul R. Gugliuzza, Associate 

Professor of Law, Boston University School of Law) (‘‘Although no court has yet applied this 

standard to the new state statutes, it seems to ensure that most tactics employed by bottomfeeder trolls will remain legal.’’). 10Globetrotter Software, Inc. v. Elan Computer Grp., Inc., 362 F.3d 1367 (Fed. Cir. 2004) 

(holding that Noerr-Pennington shields communications such as demand letters from both state 

and federal laws, unless they are narrowed to bad faith conduct). 

ute—nor does it touch other State and local provisions of general 

applicability. 

The State laws expressly related to patent demand letters generally list a series of prohibited bad acts with respect to patent demand letters. Four States include an exhaustive list of bad acts defining whether a demand letter is unlawful,7 and the other States 

allow a court to draw upon any other factor the court finds relevant 

in determining whether a demand letter is unlawful.8 To date, no 

State attorney general has brought a case under a State law that 

specifically addresses demand letters. As witnesses before the Subcommittee have testified, cases brought under State patent demand 

letter laws may be precluded under the Federal Circuit’s NoerrPennington doctrine, unless they also allege bad faith on the part 

of the defendant.9 Moreover, because Noerr-Pennington is rooted in 

the First Amendment, it may preclude certain Federal enforcement 

as well, unless it only addresses bad faith conduct.10 Four State attorneys general have taken action against a single patent assertion 

entity, but those investigations were conducted under State consumer protection laws of general applicability. 

State attorneys general may enforce the provisions of H.R. 2045. 

In any case in which the attorney general of a State has reason to 

believe that an interest of the residents of that State has been adversely affected by any person who violates section 2, the attorney 

general of the State may bring a civil action on behalf of such residents of the State in a district court of the United States of appropriate jurisdiction to enjoin further such violation by the defendant 

or to obtain civil penalties. Civil penalties for State attorneys general are limited to $5,000,000 for a series of related violations. A 

State attorney general shall provide prior written notice of any enforcement action authorized under Section 4 to the FTC and provide the FTC with a copy of the complaint in the action, except in 

any case in which such prior notice is not feasible, in which case 

the attorney general shall serve such notice immediately upon instituting such action. The FTC shall have the right to intervene in 

the action, and upon so intervening, to be heard on all matters 

arising therein. The FTC shall also have the right to petition for 

appeal. If the FTC has instituted a civil action for violation of Section 2, no State attorney general may bring an action under H.R. 

2045 during the pendency of that action against any defendant 

named in the FTC complaint for any violation of such section alleged in the complaint. H.R. 2045 preserves the State attorney general’s ability to exercise the powers conferred on the attorney general by the laws of that State to conduct investigations, administer 

oaths or affirmations, or compel the attendance of witnesses or the 

production of documentary and other evidence. 

Under H.R. 2045, bad faith means that the sender made knowingly false or knowingly misleading statements, representations, or 


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11 Eastern Railroad Presidents Conf. v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961); United 

Mine Workers v. Pennington, 381 U.S. 657 (1965). The Federal Circuit has held that Noerr-Pennington immunity applies to patent demand letters, immunizing patent assertion activity unless 

it is both ‘‘objectively baseless’’ and done in subjective bad faith. Globetrotter Software, Inc. v. 

Elan Computer Grp., Inc., 362 F.3d 1367, 1377 (Fed. Cir. 2004). 12Fed. Trade Comm’n v. Publ’g Clearing House, Inc., 104 F.3d 1168, 1171 (9th Cir. 1997) 

(quoting American Standard Credit Systems, 874 F.Supp. 1080, 1089 (C.D. Cal. 1994) and Fed. 

Trade Comm’n v. Army Travel Svc., Inc., 875 F.2d 564, 573–74 (N.D. Ill. 1988)). 

omissions; made statements, representations, or omissions with 

reckless indifference as to the false or misleading nature of such 

statements, representations, or omissions; or made statements, representations, or omissions with awareness of the high probability 

of the statements, representations, or omissions to deceive and the 

sender intentionally avoided the truth. This construct seeks to preserve the First Amendment rights of patent holders to assert their 

patents, inoculate H.R. 2045 from First Amendment challenges 

under Noerr-Pennington,11 avoid enforcement actions in cases of 

good faith mistakes, and narrow the legislation to actual harmful 

activity observed in the marketplace. The bad faith definition 

largely mirrors the legal standard developed under the FTC Act 

provision authorizing the FTC to obtain restitution from individual 

corporate officers involved in fraud schemes. Specifically, Federal 

courts have determined that in order to obtain restitution from an 

individual defendant, the FTC must show that he or she ‘‘had 

knowledge of material misrepresentations, [was] recklessly indifferent to the truth or falsity of a misrepresentation, or had an 

awareness of a high probability of fraud along with an intentional 

avoidance of the truth.’’ 12

Under its current Section 5 authority, the FTC cannot obtain 

civil penalties unless a defendant has violated an FTC rule or a 

consent order. In a recent investigation under Section 5 against 

MPHJ—an entity that directed over 31,000 letters through 31 subsidiaries—the FTC obtained a consent decree barring MPHJ from 

making deceptive representations when asserting patent rights. To 

allow the FTC to bring cases involving misstatements or omissions 

not enumerated in H.R. 2045, the draft legislation would specifically preserve the FTC’s Section 5 authority to enjoin unfair or deceptive acts or practices. Although the TROL Act preempts State 

laws specifically addressing patent demand letters, it also preserves the authority of State attorneys general to enforce their own 

mini-FTC Acts and authorizes State attorneys general to enforce 

the provisions of the TROL Act. 

HEARINGS

The Subcommittee on Commerce, Manufacturing, and Trade held 

a hearing on H.R. 2045 on February 26, 2015. The Subcommittee 

received testimony from: 

• Paul Gugliuzza, Associate Professor, Boston University 

School of Law; 

• Vince Malta, Liaison for Law and Policy, National Association of Realtors; 

• Vera Ranieri, Staff Attorney, Electronic Frontier Foundation; and 

• Laurie Self, Vice President and Counsel, Government Affairs, Qualcomm. 


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COMMITTEE CONSIDERATION

On April 22, 2015, the Subcommittee on Commerce, Manufacturing, and Trade met in open markup session and forwarded a 

discussion draft entitled ‘‘Targeting Rogue and Opaque Letters Act’’ 

to the full Committee, as amended, by a record vote of 10 yeas and 

7 nays. On April 29, 2015, the full Committee on Energy and Commerce met in open markup session and ordered H.R. 2045 reported 

to the House, without amendment, by a record vote of 30 yeas and 

22 nays. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. 


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COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee held hearings and made findings that are reflected in this report. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

The purposes of H.R. 2045 are (1) to prevent patent owners or 

those holding themselves out to be patent owners from coercing or 

deceiving victims into paying license fees or settlements based on 

spurious claims or meritless suggestions of infringement; and (2) to 

ensure that recipients of such communications receive enough information regarding the patent and corresponding allegations such 

that a demand letter recipient with little or no expertise in patent 

law can understand the letter’s claims and how to respond. H.R. 

2045 applies specifically to a ‘‘pattern or practice’’ of sending written communications in connection with the assertion of a United 

States patent. These communications are commonly referred to as 

patent demand letters. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee finds that H.R. 2045 

would result in no new or increased budget authority, entitlement 

authority, or tax expenditures or revenues. 

EARMARK, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS

In compliance with clause 9(e), 9(f), and 9(g) of rule XXI of the 

Rules of the House of Representatives, the Committee finds that 

H.R. 2045 contains no earmarks, limited tax benefits, or limited 

tariff benefits. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, May 28, 2015. 

Hon. FRED UPTON, 

Chairman, Committee on Energy and Commerce, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 2045, the Targeting 

Rogue and Opaque Letters Act of 2015. 


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If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Susan Willie. 

Sincerely, 

KEITH HALL. 

Enclosure. 

H.R. 2045—Targeting Rogue and Opaque Letters Act of 2015 

H.R. 2045 would establish as an unfair or deceptive act sending 

letters to companies and individuals claiming infringement of a 

patent when those letters include certain statements, as outlined 

in the bill, that are known by the sender to be false or misleading. 

Similarly, the bill would establish as an unfair or deceptive act 

sending such letters if, in bad faith, the sender fails to include certain other information also outlined in the bill. H.R. 2045 would 

authorize the Federal Trade Commission (FTC) to seek civil penalties for violations of the new prohibitions. 

Based on information from the FTC, CBO estimates that the cost 

of implementing H.R. 2045 would not be significant because the 

agency is able to enforce similar prohibitions under its existing 

general authorities. CBO estimates that enacting H.R. 2045 would 

increase federal revenues from the added authority to collect civil 

penalties; therefore, pay-as-you-go procedures apply. However, we 

expect those collections would be insignificant because of the small 

number of cases that the agency would probably pursue. Enacting 

the bill would not affect direct spending. 

H.R. 2045 contains intergovernmental mandates as defined in 

the Unfunded Mandates Reform Act (UMRA). The bill would preempt some state and local laws related to patent rights. The bill 

also would impose notification requirements and limitations on 

state attorneys general. Because the limits on state and local authority would impose no duties with costs and because the notification requirements would result in minimal additional spending, 

CBO estimates the costs of the mandates would be small and 

would not exceed the threshold established in UMRA for intergovernmental mandates ($77 million in 2015, adjusted annually for inflation). H.R. 2045 contains no private-sector mandates as defined 

in UMRA. 

The CBO staff contact for this estimate is Susan Willie. The estimate was approved by H. Samuel Papenfuss, Deputy Assistant Director for Budget Analysis. 

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates Reform Act. 

DUPLICATION OF FEDERAL PROGRAMS

No provision of H.R. 2045 establishes or reauthorizes a program 

of the Federal Government known to be duplicative of another Federal program, a program that was included in any report from the 

Government Accountability Office to Congress pursuant to section 

21 of Public Law 111–139, or a program related to a program identified in the most recent Catalog of Federal Domestic Assistance. 


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DISCLOSURE OF DIRECTED RULE MAKINGS

The Committee estimates that enacting H.R. 2045 specifically directs to be completed 0 rule makings within the meaning of 5 

U.S.C. 551. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

This Act may be cited as the ‘‘Targeting Rogue and Opaque Letters (TROL) Act.’’ 

Section 2. Unfair or deceptive acts or practices in connection with 

the assertion of a United States patent 

This section establishes that it is an unfair or deceptive act or 

practice under the FTC Act to engage in a pattern or practice of 

sending patent demand letters if the communications, in bad faith, 

include any of the twelve prohibited elements enumerated in paragraphs (1) or (2), or fail to include any of the five elements enumerated in paragraph (3). Section 2 also sets forth an affirmative defense that was altered at Subcommittee markup. The new affirmative defense provides that statements, representations, or omissions were not made in bad faith if the sender can demonstrate 

that such statements, representations, or omissions were mistakes, 

which may be demonstrated by a preponderance of evidence that 

the violation was not intentional and resulted from a bona fide 

error notwithstanding the maintenance of procedures reasonably 

adapted to avoid any such error. 

Section 3. Enforcement by Federal Trade Commission 

Section 3 establishes that a violation of Section 2 shall be treated 

as a violation of a rule defining an unfair or deceptive act or practice prescribed under the FTC Act. This enables the FTC to seek 

civil penalties for violations; whereas, under its current authority, 

it could only seek an injunction against a sender of an unfair or 

deceptive demand letter. Section 3 also clarifies that the FTC’s existing powers and enforcement authority are preserved. 

Section 4. Preemption of State laws on patent demand letters and 

enforcement by State attorneys general 

Section 4 preempts State laws, rules, regulations, standards, and 

other provisions having the effect of law expressly relating to the 

transmission or contents of patent demand letters, while preserving 

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mits State attorneys general to enforce the Act and to seek civil 

penalties for violations. Section 4 requires the attorney general of 

a State to provide the FTC with prior written notice of any action 

taken to enforce the law and also provides the FTC authority to intervene in the action. It further provides that no State action may 

be brought if the FTC has a civil action pending against any named 

defendant. 

Section 5. Definitions 

Section 5 defines certain terms used throughout the draft legislation, including ‘‘bad faith’’ as it pertains to the representations or 

omissions enumerated in Section 2. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

This legislation does not amend any existing Federal statute. 


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1Shirokov, 2012 U.S. Dist. LEXIS 42787 at *52–53. 2See e.g., Sosa v. DIRECTV, Inc., 437 F.3d 923, 937 (9th Cir. 2006). 3 Cardtoons, L.C. v. Major League Baseball Players Ass’n, 208 F.3d 885, 891 (10th Cir. 2000). 

DISSENTING VIEWS 

We cannot support H.R. 2045, the Targeting Rogue and Opaque 

Letters Act of 2015. Although we could support efforts to curb deceptive patent demand letters, this bill does not accomplish that 

goal. Instead, this bill creates a disincentive to enforcement by 

tying the hands of state attorneys general and by creating barriers 

to Federal Trade Commission (FTC) enforcement that are simply 

too high. 

This bill requires the FTC and state attorneys general to prove 

‘‘bad faith’’ of the sender in order for patent demand letters to be 

considered an unfair or deceptive act or practice. In short, this 

means that the FTC has to be able to prove that the sender of a 

patent demand letter knowingly made false statements or was 

aware that the recipient would be deceived. This knowledge requirement is an unusual element that would make investigations 

and enforcement far more difficult. Consumers can be harmed by 

misrepresentations regardless of whether the party making the 

representations knows them to be false. The knowledge requirements would be a significant and counterproductive departure from 

existing law. 

The majority asserts that the knowledge requirement is necessary to protect First Amendment rights under the Noerr-Pennington doctrine. However, whether Noerr-Pennington applies outside of the antitrust context, i.e., whether it immunizes entities 

from anything other than antitrust liability, is at best a matter of 

debate.1 Some courts have found that it is a general rule of construction that applies expansively.2 Other courts, however, have 

concluded that the Noerr-Pennington doctrine does not apply outside the antitrust context, and further, that threats made before 

litigation commences and communicated solely between private 

parties are not afforded broad immunity under the First amendment.3 Because this remains an open question of law, establishing 

a knowledge requirement for FTC actions is unnecessary and potentially damaging. 

In addition to concerns regarding the knowledge requirement, we 

have serious concerns about this bill’s preemption of state laws. 

Twenty states, at the time of Committee consideration of H.R. 

2045, had already enacted specific policies to curb trolling. In many 

ways, these state protections exceed those that would be guaranteed under the TROL Act. This bill would completely preempt the 

20 laws that expressly address abusive patent assertion communications. It would also severely constrain the ability of states to 

take an active role in guarding against unfair and deceptive patent 

demand letters by limiting available remedies and placing an arbiVerDate Sep 11 2014 01:57 Dec 21, 2016 Jkt 069006 PO 00000 Frm 00014 Fmt 6604 Sfmt 6604 E:\HR\OC\HR877.XXX HR877

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trary cap on civil penalties. The cap on civil penalties creates a 

loophole whereby patent trolls may be willing to accept the maximum civil penalty because they can collect much more through deceptive demand letters. If Congress seeks to preempt specific state 

laws—especially on issues on which the states have been leaders 

fighting unfair and deceptive acts, such as false and misleading demand letters—the federal effort should be at least as strong as 

those state laws. 

For the reasons stated above, we dissent from the views contained in the Committee’s report. 

FRANK PALLONE, Jr., 

Ranking Member. 

JAN SCHAKOWSKY, 

Ranking Member, Subcommittee on Commerce, 

Manufacturing, and 

Trade. 

Æ 


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