CUNA, partners urge lawmakers to go further in markup of abusive patent lawsuits bill

June 11, 2015

WASHINGTON (6/11/15)--A letter from CUNA and a coalition of financial service firms in advance of today’s markup by the House Judiciary Committee of the Innovation Act (H.R. 9), a bill to combat abusive patent lawsuits, said the group supports the intent of the bill but urged lawmakers to go further in protecting financial firms from litigation on commonly used technologies.

CUNA and its partners outlined their position in a letter sent Tuesday to committee Chair Rep. Bob Goodlatte (R-Va.), who introduced the legislation in February (News Now April 13). The bill is scheduled for markup at 11 a.m. (ET).

The bill would remove some financial incentives sought by firms that assert low-quality patents in hopes of quick settlements. Credit unions and other financial institutions have experienced problems with demand letters from patent “trolls” threatening lawsuits and seeking quick settlements.

The letter commended the bill’s sponsors and co-sponsors for moving forward with the bill and identified two priorities for the committee: “the need for greater detail and transparency in demand letters, and a reasonable extension of the Covered Business Method (CBM) Patent program.”

CUNA and its partners urged the committee to include a provision to help ensure that demand letters contain clear and detailed information such as:

  • The owner of the patent;
  • What entities have a financial interest in the patent;
  • What product or service is allegedly infringing the patent; and
  • How the patent is being infringed upon.

Failure to send a clear, detailed demand letter should have “meaningful consequences,” the group said. “We strongly encourage the committee to continue to work to arrive at an agreement, which, like the Senate bill, will curb what has essentially become a cottage industry of bullying small companies with threats of patent litigation.”

The letter also urged support of a bipartisan amendment that would extend duration of the CBM program without expanding its scope, noting that the current CBM program is working well. Limiting the scope of eligible patents is permitting the Patent Office to review true business method patents while keeping technological inventions out of the program.

CUNA and its partners noted that “rigorous gatekeeping around the petition and proceeding processes” prevents petitioners from abusing patent holders or consuming the Patent Office’s resources. “Without CBM, the federal judiciary is the only vehicle” for resolving the eligibility issue, the letter said.

The act originally was introduced in October 2013 and was approved that December in the U.S. House of Representatives but was never considered in the U.S. Senate. A Senate version of the bill, S. 1137, Protecting American Talent and Entrepreneurship (PATENT) Act, also was introduced in February by Senate Judiciary Committee Chair Sen. Chuck Grassley (R-Iowa).

In addition to CUNA, the letter was signed by American Bankers Association, American Council of Life Insurers, American Insurance Association, The Clearing House Payments Co. LLC, Financial Services Roundtable, Independent Community Bankers of America, NACHA-The Electronic Payments Association, National Association of Federal Credit Unions, National Association of Mutual Insurance Companies and Property Casualty Insurers Association of America.