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CUNA, Trades Back Goodlatte Patent Improvement Bill
WASHINGTON (10/29/13)--"The Innovation Act of 2013" (H.R. 3309) would help address the patent troll issues that "threaten to pose additional, unwarranted costs on Main Street lenders and the communities they serve," the Credit Union National Association noted in a letter sent to the U.S. Congress today.

"Financial institutions of every size have been targeted by non-practicing entities (NPEs), often referred to as patent trolls, who in most cases assert low-quality business method patents through vaguely worded demand letters," the letter said. The letter thanked Rep. Bob Goodlatte (R-Va.) for his introduction of H.R. 3309. "Components of the Innovation Act could help alter the business model of NPEs by removing some of their financial incentive to assert low-quality patents in the hope of quick settlements," the letter added.

CUNA has strongly advocated for improvements to a program that allows financial institutions to pursue invalidity claims at the Patent and Trademark Office when confronted with a patent claim. The program provides financial institutions with powerful tools to defend themselves, but carries a hefty price tag--starting at $35,000 just for the filing fee. The letter noted the Goodlatte bill contains a provision to allow that fee to be waived on a discretionary basis, with an idea of benefiting credit unions and community banks.

"Smaller financial services providers who have fewer resources to deal with demand letters and engage in the lengthy process of fighting the merit-less litigation that patent trolls initiate, will particularly benefit from these provisions. It is imperative that financial service providers of all sizes have access to the [Transitional Program for the Review of Covered Business Method Patents] program," the letter said.

CUNA was one of several financial services trade associations that co-signed the letter.

However, the co-signers said, the bill must go further. "Financial firms of all sizes find themselves in litigation as end-users given that virtually all business method patents claim a method or process implemented through some type of technology. Because it is rare for our technology providers to voluntarily step into a suit and stand in the place of their customers, we believe that adding a 'right of contribution' or 'mandatory joinder' to the patent law would enable a more equitable distribution of liability between end-users and suppliers," they added.


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