WASHINGTON—In advance of the Commerce, Manufacturing, and Trade Subcommittee hearing Thursday, CUNA and NAFCU, along with six other financial trade associations, Wednesday sent a joint statement outlining the organizations’ position on patent trolls.
The letter was sent to Michael C. Burgess, chairman of the House Subcommittee on Commerce, Manufacturing and Trade, and to the Committee’s ranking member Jan Schakowsky. The statement, signed by the CU trade groups, the American Bankers Association, the Independent Community Bankers of America, The Clearing House Payments Co., the Financial Services Roundtable and the American Insurance Association noted that any legislation should include the following:
- Provisions clarifying the Federal Trade Commission’s authority to fight against deceptive practices, while not affecting legitimate patent holders’ rights to send demand letters or otherwise assert their patent rights.
- If a demand letter does not contain specific information about the patent, the alleged infringement and who is asserting the patent, any civil action that is later brought by the troll would be dismissed.
- Limit the number of exceptions provided to patent trolls, such as through affirmative defenses to fraudulent behavior.
- If state law is preempted, it is imperative that strong and enforceable national standards for demand letter transparency be put in place.
The group wrote in support of the Committee “developing legislation to tackle the scourge of bad faith patent demand letters. Financial institutions of every size have been targeted by 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. Indeed, patent trolls’ recent focus on credit unions, community banks and other financial institutions 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.”