WASHINGTON (7/10/14)--As a House Energy and Commerce subcommittee moves forward with a vote on a patent reform bill today, the Credit Union National Association sent a joint financial trade group letter to urge lawmakers to strengthen its provisions to fight
The bill is intended, in part, to address the problem of Patent Assertion Entities (PAEs), often referred to as patent trolls, who in most cases assert patents of dubious quality through vaguely worded demand letters or intentionally vague complaints to force settlements or payments.
Financial institutions of every size have been targeted by PAEs, the joint letter states. It warns patent trolls' recent focus on credit unions and community banks threatens to pose "additional, unwarranted costs on lenders and the communities they serve."
"In our industry alone, there are hundreds of examples of a patent troll attempting to sell a product--the patent license--to a bank or credit union using tactics resembling fraud or extortion," the letter says. It is addressed to Rep. Lee Terry (R-Neb.), chairman of the House Energy and Commerce subcommittee on commerce, manufacturing and trade, and its ranking member, Rep. Jan Schakowsky (D-Ill.).
While calling the lawmakers' bill "a step in the right direction," CUNA encourages them to do more to ensure the bill can be an effective tool for financial institutions. The bill should limit the number of exceptions provided to patent trolls, such as through affirmative defenses to fraudulent behavior, and should allow states with effective laws to continue to enforce them.
The subcommittee began a markup of the bill Wednesday and votes continue today. In addition to CUNA, the letter is signed by the National Association of Federal Credit Unions, the American Bankers Association and the Independent Community Bankers of America.
CUNA has repeatedly urged lawmakers to act to curb the patent system abuses. "Reforms are desperately needed. This growing problem will not be solved until Congress passes bipartisan legislation that makes clear patent trolls can no longer get away with abusing the system," CUNA has said in letters of support for such legislation.
CUNA and the state credit union associations have been active on every level urging lawmakers and the Obama administration that patent reform is needed.