During a hearing before a U.S. Senate subcommittee considering consumer-protection issues purportedly raised by the demand letters disseminated by non-practicing entities (NPEs, also known as "patent trolls")—those patent owners that allegedly exist to demand payments in lieu of bringing patent infringement litigation—several witnesses called for the federal government to establish a registry where NPEs would be required to post information about their activities.
Counsel for the Electronic Frontier Foundation, which has set up a database of demand letters, testified at the November 7, 2013, hearing before the Subcommittee on Consumer Protection, Product Safety, and Insurance of the Senate Committee on Commerce, and said, "Companies that actually create products, services, and jobs find themselves under siege by trolls who purchase vague and overbroad patents to launch or threaten lawsuits." She claimed that "many demand recipients are often not willing or inclined to publicly share their letters" over concerns about adverse publicity, but suggested that the U.S. Patent and Trademark Office or Federal Trade Commission (FTC) could require patent holders to report how many demand letters they have sent, the identity of all parties who would benefit from any resulting license and how often the patent holder has filed a lawsuit based on the patent at issue.
Counsel for Cisco Systems testified that a number of its customers have "received licensing demands from many of these shake down campaigns. In each case, the campaigns are inherently deceptive. The patents are often invalid or irrelevant to their targets or already licensed." He also called for legislation to "require anyone sending patent demand letters to more than ten entities who are NOT the manufacturers of the accused products to file the letters in an on-line registry to be maintained by the FTC." He also suggested that NPEs be required to provide specific information in their demand letters, such as "a list of products which are deemed to infringe, including the manufacturer and model number, and [information about] the right to have the manufacturer defend the case."
Nebraska Attorney General Jon Bruning, currently engaged in a campaign to address allegedly deceptive demand letters under the state’s consumer protection laws, called on Congress "to use its subpoena powers to bring the most egregious patent trolls and the lawyers who enable them to account." Bruning highlighted the experience of a state resident who was the recipient of a demand letter claiming that he was infringing on the NPE’s scan-to-email patent through his work for Phelps County Emergency Management. According to Bruning, this resident "never worked" for that entity; he is, rather "an elderly gentleman living in a nursing home in Holdrege, Nebraska, and who once served on the Phelps County Board many years ago." Bruning claimed that this is just one story of many.
George Mason University School of Law Professor Adam Mossoff testified to the contrary that the "patent licensing business model" is essential to the distribution of patented innovation through the marketplace. He cautioned, "Whether there are benefits or harms from specific commercial and legal practices in the innovation economy is an important empirical and policy question, but such benefits or harms should no more be based on rhetoric, anecdotes, and incorrect claims about historical practices than they should be based on ‘nonrandom and nongeneralizable’ studies. Congress should exercise restraint, avoid ‘[a]ttempting to label and then discriminate based on identity,’ and be cautious in accidentally killing ‘the goose laying our golden egg.’"