WASHINGTON (4/17/15)--A bill to clarify Federal Trade Commission (FTC) authority to fight abusive patent assertion entities (PAEs) is a positive step forward but is in need of improvement, CUNA believes.
The Targeting Rogue and Opaque Letters (TROL) Act of 2015 was the subject of a Thursday hearing by the U.S. House Energy and Commerce subcommittee for commerce, manufacturing and trade, to which CUNA and other organizations submitted a letter for the record.
"The recent focus of patent trolls on credit unions and community banks threatens to pose additional, unwarranted costs on lenders and the communities they serve," the letter reads. "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."
The TROL Act
would clarify the FTC's authority to fight deceptive practices while not affecting legitimate patent-holders to assert their patent rights. The FTC, along with state attorneys general, could remove financial incentive to send intentionally vague demand letters in hope of quick settlements.
CUNA and the organizations made several suggestions in the letter to strengthen the legislation. This includes removal, or expansion, of the bill's definition of "bad faith" to help more small businesses fall under the bill's protection.
The bill should also allow states that have enacted laws to discourage bad faith demand letters to continue to use those laws to protect credit unions, banks and other small businesses, as well as consumers, the letter says.
In addition to CUNA, the letter was signed by the American Bankers Association, Clearing House Payments Co., Financial Services Roundtable, Independent Community Bankers of America and National Association of Federal Credit Unions.