Removing Barriers Blog

House to Hold Staff Briefing on Effect of Patent Trolls on Financial Institutions
Posted August 31, 2015 by CUNA Advocacy

On Tuesday, September 1 at 11:00AM in Rayburn House Office Building 2220, Financial Institutions Subcommittee Chairman Randy Neugebauer will sponsor a bipartisan staff briefing to explore how patent trolls impact financial institutions.  Over the last several years, patent trolls have significantly increased the legal costs of financial institutions. This briefing will explore how patent reform may help alleviate this burden.

CUNA staff have been coordinating with other financial trade associations to arrange this briefing in order to keep the pressure on Congress to address the burgeoning abuse of the patent system by so called “patent trolls,” entities that own and assert patents of dubious quality with no intention to market the patented invention.

These trolls seek to extort payment from businesses by sending strongly worded demand letters vaguely alleging infringement of a patent and demanding licensing fees or threatening suit. Many smaller financial institutions including credit unions do not have in-house legal departments, so evaluating the legitimacy of these claims can be costly, perhaps more than the amount of the demand itself. 

CUNA and other financial services trades are pushing for significant changes to the law that would curb abusive demand letters and punish actors who abuse the patent system. Unfortunately, pending legislation in the House, H.R. 9, the Innovation Act, does not currently go nearly far enough in this regard. On the other hand, S. 1137, the bipartisan PATENT Act in the Senate, includes very robust demand letter provisions that would help protect credit unions from patent trolls.