WASHINGTON (3/7/14)--With the weight of their combined 14,000 financial institution memberships behind them, the Credit Union National Association, Independent Community Bankers of America and the American Bankers Association sent a joint letter of support for a new bill to fight patent system abuses.
The bill (S. 2049) was introduced by Sen. Claire McCaskill (D-Mo.) late last month and is titled the "Transparency in Assertion of Patents Act." It would curb unfair and deceptive practices during assertions of patents against legitimate businesses, including credit unions and banks.
The legislation takes an important step toward addressing the "exponentially growing threat of Patent Assertion Entities (PAEs), commonly referred to as 'patent trolls,'" the joint letter states.
If enacted, it would help to address the burden credit unions and banks face when trying to decipher vague and misleading demand letters. And, the letter asserts, it would do so by taking specific aim at the problem, without affecting the rights of legitimate patent holders to send demand letters or otherwise assert their patent rights.
S. 2049 would clarify the Federal Trade Commission's (FTC) authority to require basic information, such as the owner of the patent and specific technology involved, to be included in letters sent by PAEs.
"This will help the victims of trolls to quickly and inexpensively understand the infringement claim and how best to respond to it," the letter said.
The CUNA joint letter also noted that legitimate patent holders would benefit from McCaskill's bill because it would empower the FTC to specify what constitutes a deceptive demand letter.
"This would provide patent holders with certainty of how to assert a patent without any risk that it could be labeled unfair or deceptive. Civil penalties would be imposed on those that continue to send out 'bad faith' demand letters, with exceptions provided for communications between parties on existing licensing agreements."
Once introduced, S. 2049 was referred to the Senate Commerce, Science, and Transportation Committee.
The chairman of that committee, Sen. John Rockefeller (D-W. Va.), is a co-sponsor of the bill. The CUNA joint letter was sent to the chairman and the ranking member of the committee, Sen. John Thune (R-S.D.).
CUNA and the banking trades told the committee leaders that they look forward to working with members of the committee to find a "bipartisan solution that directly addresses the growing abuse of our patent system and the specious demand letters that are having a negative impact on our industry, our customers, and the American economy."