TROL Act doesn't address core problems, CUNA says before markup

April 29, 2015

WASHINGTON (4/29/15)--The Targeting Rogue and Opaque Letters (TROL) Act would not address core problems presented by patent assertion entities, CUNA and other financial trade organizations told U.S. House members today before the bill is marked up by the House Energy and Commerce committee.

The bill would authorize the Federal Trade Commission to seek civil penalties where patent demand letters make certain misstatements or omissions in bad faith. The bill preempts state laws specifically addressing patent demand letters, but also preserves the authority of state attorneys general to enforce the provisions of the TROL Act.

CUNA said the definition of "bad faith," as contained in the bill, is very narrow and would require evidence that the sender made "knowingly false or knowingly misleading" statements or omissions; made statements or omissions with "reckless indifference" or made them with "awareness of the high probability" that they would deceive and that the sender intentionally avoided the truth.

"This is a very difficult standard to meet and would make the transparency requirements virtually unenforceable," the letter reads. "This would not deter 'abusive' demand letters directed at our members."

The letter goes on to state that the bad faith standard and definition sets an "impossibly high bar." CUNA believes the definition should be conformed to similar laws enacted in 21 states, or simply eliminated from the bill.

CUNA and the trade organizations state that the TROL act would undo the constructive state bills that have passed and instead replace them with a "weaker federal standard."

The House Energy and Commerce committee is expected to begin the markup at 10 a.m. (ET). Another bill, the Ratepayer Protection Act, will also be marked up.

In addition to CUNA, the letter was signed by the American Bankers Association, Clearing House Payments Company, Financial Services Roundtable, Independent Community Bankers of America and National Association of Federal Credit Unions.