WASHINGTON (5/8/15)--An increase of almost 290% in litigation by patent assertion entities from 2009 to 2013 is a threat to financial institutions of all sizes, CUNA and other financial services organizations told the U.S. Senate Judiciary Committee in a letter Thursday.
The hearing involved the Protecting American Talent and Entrepreneurship (PATENT) Act (S. 1137), which was introduced last week. The organizations called the legislation an “important step” but believe further work is needed.
“We are encouraged by your efforts and believe it is an important step toward developing a bill that can eventually be enacted into law to help curb abusive tactics of non-practicing entities (NPEs) who use low quality patents to target businesses of all shapes and sizes,” the letter reads. “However, further work must be done in the area of patent quality to ensure that meaningful opportunities exist for all sectors to have low quality patents reviewed by the experts at the Patent and Trademark Office (PTO) for validity.”
CUNA believes that the assertion of these low-quality patents serve as an unnecessary expense and distraction for the financial services industry, and hinder economic growth by preventing capital from going to businesses and consumers.
The organizations believe the PATENT Act could be improved by:
The organizations emphasize the effect the low-quality patent assertions can have on financial institution investment in small businesses and entrepreneurs.
“Opponents of demand letter reform and CBM permanence frame the debate with claims that meaningful reform will diminish intellectual property rights, hurting investment in today’s small business and entrepreneurs by venture capital firms. The opposite is true,” the letter reads. “Small businesses and entrepreneurs will be hurt if Congress does not halt the NPEs from targeting financial institutions with low quality patents, deceptive demand letters and frivolous lawsuits.”
The letter was also signed by the American Bankers Association, American Insurance Association, The Clearing House Payments Co., Financial Services Roundtable, Independent Community Bankers Association, NACHA-The Electronic Payments Association, National Association of Federal Credit Unions and the National Association of Mutual Insurance Companies.