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CUNA Backs Schumer, Hatch Patent Reforms in Senate
WASHINGTON (12/19/13)-The Credit Union National Association is keeping focus on patent law reforms, even as the U.S. Congress is wrapping up its 2013 session. The latest example of CUNA advocacy came in the form of letters of support to Sens. Charles Schumer (D-N.Y.) and Orrin Hatch (R-Utah), who have introduced bills in their chamber for CUNA-supported changes in the patent system.

One letter supports Schumer's Patent Quality Improvement Act of 2013 (S. 866) which would make the Section 18 program created by the America Invents Act permanent.

The Section 18 program protects credit unions and other businesses from outside claims that some specific customer service, payment and marketing practices have already been claimed under existing business method patents. These patent challenges, which are often brought by non-practicing entities, can become expensive for credit unions and others if they are heard in court.

"By making the program permanent, you ensure that that full spectrum of low-quality business method patents will be subject to review if asserted under the threat of litigation." The bill shines a light on patent quality and patent litigation abuse, "and is critical to clear the landscape of poor quality patents that are most often used by assertion entities in meritless litigation," the letter said.

In a separate letter, the cosigners expressed support for Hatch's Patent Litigation Integrity Act of 2013 (S. 1612.) That bill would enable fee shifting in unsuccessful patent infringement lawsuits, a change that would help to discourage PAEs from filing frivolous lawsuits.

The bill, the letter said, aims to ensure that fee shifting will be effective by empowering the court, on a motion from the defendant, to order the party alleging infringement to post bond to cover the other party's expenses. This change "will hold PAEs financially accountable and ultimately deter them from filing frivolous lawsuits that unnecessarily harm financial services providers and the consumers they serve," the letter added.

The letters are cosigned by the American Bankers Association, American Insurance Association, The Clearing House, Financial Services Roundtable, Independent Community Bankers of America, NACHA--The Electronic Payments Association, National Association of Federal Credit Unions and the National Association of Mutual Insurance Companies.

CUNA witness John Dwyer, who is president/CEO of New England FCU, Williston, Vt., described the growing threat' of patent trolls to Senate Judiciary Committee members this week. (See Dec. 18 News Now story: CUNA Describes 'Growing Threat' of Patent Trolls to Lawmakers.) CUNA and others have also written to Senate Committee on Commerce, Science and Transportation members, urging them to protect businesses of all sizes from the "smash and grab tactics" employed by patent trolls. (See Dec. 12 News Now story: CUNA Urges Hill Action on 'Main Street' Patent Reform.)
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