WASHINGTON (2/12/14)--Patent reform is needed, and credit unions and others impacted by patent issues should continue to press the U.S. Congress for action, the Credit Union National Association's Robin Cook said at a Tuesday panel discussion on patent troll issues.
The event, which was hosted on Capitol Hill by the Main Street Patent Coalition, featured remarks from Sen. Orrin Hatch (R-Utah), academics and representatives from the restaurant, retail and hospitality industries.
"We support legislation that will help curb unfair and deceptive patent demand letters and frivolous patent litigation," Cook, CUNA assistant general counsel for special projects, said.
CUNA Assistant General Counsel for Special Projects Robin Cook (second from left) outlined credit union patent reform priorities during Tuesday's panel discussion. (CUNA Photo)
So-called "patent trolls" are using low-quality patents in an effort to extract settlements from credit unions, and are an abuse of the patent system, Cook said. Cook provided examples of how patent trolls have targeted credit unions, including one troll that has filed cases related to ATM patents against credit unions that do not own or operate ATMs.
Most credit unions do not have an in-house lawyer, and finding competent counsel to combat these cases can be a challenge, Cook said. Many trolls are aware that the cost of hiring a patent attorney is a deterrent to credit unions and others, and price their proposed licenses in such a way that they are sure to be lower than the cost of counsel to evaluate the demand.
"People are scared to fight," and credit unions and others have settled out of court to avoid the cost of these suits, he noted.
Hatch spoke in support of a bill he introduced, the Patent Litigation Integrity Act of 2013 (S. 1612). That bill would enable fee shifting in unsuccessful patent infringement lawsuits, and would enable the court to require a bond to be posted by a patent plaintiff in advance to ensure there is money available to cover the legal fees that might be awarded at the end of the case. This, Hatch said, is a change that would help to discourage patent assertion entities from filing frivolous lawsuits.
CUNA supports a number of proposals currently being considered in the Senate, including the demand letter components of the Patent Transparency and Improvements Act of 2013 (S. 1720), offered by Sens. Patrick Leahy (D-Vt.) and Mike Lee (R-Utah), along with Hatch's bill and the Patent Quality Improvement Act of 2013 (S. 866), offered by Sen. Charles Schumer (D-N.Y.).
Credit union priorities for patent law reform include:
More transparency in demand letters;
Clarification of Federal Trade Commission enforcement authority over unfair and deceptive demand letters;
A demand letter registry; and
Stronger end user protections.