April 27, 2015
The Honorable Jan Schakowsky
Ranking Member, Subcommittee on Commerce, Manufacturing and Trade Committee on Energy and Commerce
2125 Rayburn House Office Building
Washington, DC 20515
Dear Ms. Schakowsky,
Thank you for your question for the record following the hearing on the Targeting Rogue and Opaque Letters (TROL) Act held on April 16, 2015. A response as requested is provided below.
Question: There have been some concerns raised that placing restrictions on the content of demand letters may be unconstitutional under the First Amendment and that the bad faith requirement in demand letter is a necessary constitutional protection. However, the standard for bad faith that would be imposed by the TROL Act is unprecedented in the consumer protection context.
a. Is the bad faith requirement, as currently defined in the TROL Act, a necessary first amendment protection?
b. Please explain why regulating the form and content of patent demand letters in legislation does not create a constitutional problem?
Answer: The bad faith requirement in the TROL Act is not mandated by the First Amendment. Furthermore, regulation of the form and content of patent demand letters, as would be done in the TROL Act and as is done by the states today, creates no constitutional problem. The arguments to the contrary are mistaken for at least the following three reasons:
The analogous field of regulation of debt collection practices demonstrates that bad faith is not constitutionally required. The Fair Debt Collection Practices Act contains no bad faith requirement, and it has repeatedly been held to create no prima facie problem under the Constitution.
The case law that supposedly supports a constitutionally-mandated bad faith requirement is easily and clearly distinguishable from laws, such as the TROL Act and the state laws, which only affect the form and content of patent demand letters. If regulation of the form and content of demand letters were deemed unconstitutional, then all of civil procedure—which regulates the form and content of lawsuits—would absurdly be deemed unconstitutional as well.
Furthermore, the cited case law is poorly reasoned and on shaky ground in view of contradictory Supreme Court case law. Such unreliable jurisprudence should not form the basis of this Subcommittee’s decisionmaking.
These reasons are explained in detail below.