Senator Klobuchar urges FTC to get tougher on abusive patent lawsuits

WASHINGTON Wed Jun 26, 2013 4:58pm EDT

WASHINGTON (Reuters) - Senator Amy Klobuchar, the chairwoman of the Senate Judiciary Committee's antitrust panel, urged the Federal Trade Commission on Wednesday to consider enforcement actions against companies that file abusive patent lawsuits or threaten to do so.

In a letter addressed to the four FTC commissioners, Klobuchar urged them to move against companies that sue, or send letters threatening to sue, stores, shops and other end users of common high tech devices, like Wi-Fi routers.

"Thousands of these letters have been sent to end-users including retailers, non-profit organizations, restaurants, and hotels, to name a few, claiming infringement of an unspecified patent and demanding royalty payments under the threat of a lawsuit," the Minnesota Democrat said in the letter.

In egregious cases, some have been accused of sending letters demanding payment without determining if the accused company infringes a patent. Companies often settle even though they do not infringe because fighting a lawsuit is so expensive.

Klobuchar said she would hold a hearing on the matter in July but did not give a date or say who the witnesses would be.

The FTC chairwoman, Edith Ramirez, said last week that she supported having the FTC gather information about these companies, often called patent trolls, using a special kind of study often used as a precursor to legislation.

Patent trolls, as they are disparagingly called, are companies that buy intellectual property and seek money from firms that may infringe upon these patents.

Independent of the study, Ramirez said the FTC was prepared also to go after companies which carelessly, or worse, demand money from firms that they are not owed.

The FTC move comes weeks after the White House took steps intended to curb lawsuits by patent trolls.

And on Monday, the International Trade Commission, which hears many patent infringement cases, said it will soon require some complaining companies to prove upfront that they have a significant presence in the United States before allowing the case to proceed.

The White House suggested recently that Congress change the ITC's statute so the same standard is used for rulings by the commission as in district courts.

(Reporting by Diane Bartz; Editing by Bernard Orr)

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