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CUNA Urges Congress To Get Tough On Patent 'Trolls'
WASHINGTON (7/17/13)--The Credit Union National Association says there is a deep need for patent reforms due to the growing impact of abusive litigation, and the group has signed on to a letter to Congress supported by 42 trade associations in Washington, D.C., urging statutory changes.
 
"We are concerned with the issue because credit unions have become a target of patent trolls," CUNA Deputy General Counsel Mary Dunn said Tuesday. "The past year has seen an increase in litigation and demands involving low-quality patents in an effort to extract settlements from credit unions.  This is an abuse of the patent system.  Credit unions aren't out there stealing someone's ideas--they are buying technologies from vendors in order to better serve their members. They should not be sued for doing that." 
 
The volume of lawsuits against credit unions related to patents is on the rise.  For example, four Texas credit unions were sued in late May over certain check processing technologies by a company that has spent years targeting the nation's largest banks (News Now May 30).  Last year, credit unions were sued over certain Internet security technologies for mobile transactions on smartphones (News Now July 13, 2012). 

CUNA is aware that many more credit unions have received demand letters, Dunn said.  These letters will claim that the credit union has infringed a patent, and offer a credit union the opportunity to settle, threatening litigation if the credit union doesn't agree.  CUNA is aware of demands against credit unions for patents ranging from ATMs to WiFi offered to members in a credit union's lobby.

The joint trade group letter shares some disturbing statistics:
  • Since 2005, the number of defendants sued by patent trolls has quadrupled;
  • Last year, patent trolls sued more than 7,000 defendants and sent thousands more threat letters;
  • The activity cost the U.S. economy $80 billion in 2011, and productive companies made $29 billion in direct payouts; and
  • Moreover, trolls no longer sue only large tech corporations. Small and medium-sized businesses of all types, including start-ups, are now the most frequent targets.
The trades said they are pleased to see bills that have been introduced in Congress to address the problem, but warned "(t)here is no single solution to this complex question."
 
In addition to CUNA, the joint letter was signed by the Financial Services Roundtable, American Bankers Association, the Independent Community Bankers Association, and groups as diverse as the American Gaming Association, Food Marketing Institute, Motion Picture Association of America, National Retail Federation, and Retail Industry Leaders Association.


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