Leagues rack up 'patent troll' victories

February 20, 2015

WESTBROOK, Maine, and TALLAHASSEE, Fla. (2/23/15)--Credit union leagues continue to successfully combat "patent trolls," who have plagued the industry for years with illegitimate patent infringement claims without repercussion.

The Maine Credit Union League recently advocated for passage of patent troll legislation in the last legislative session that will address the issue for the state's credit unions moving forward.

However, pending claims were unaffected by the legislation; that is until recent further action by the league.

Joining a group defense coordinated by Adrian Kendall, league counsel, credit unions were able to have all pending patent infringement claims dismissed.

"The joint defense group's aggressive defense forced (Automated Transactions LLC) to dismiss all of its cases involving the group members and all credit union members have now received releases and covenants not to sue from ATL and the ATM patent holder," Kendall said (Weekly Update Feb. 20).

Similar to how all patent trolls operate, in the demand letters Automated Transactions threatened to sue these credit unions unless they paid a fee for a license in the technology. They would then set the fee lower than what it would cost the credit union to defend itself in court. But Maine's credit unions called the company's bluff.

"This has been an issue that has caused significant concerns to Maine credit unions over the past year and, while the legislation dealt with future frivolous claims, the outcome of this litigation was still out there," said John Murphy, league president/CEO. "It is gratifying to see it ruled in our favor, and we appreciated the hard work of all involved."

In Florida, meanwhile, the League of Southeastern Credit Unions has helped introduce a bill in the state House that would help diminish the predatory practices of patent trolls, particularly in the area of demand letter abuse. It also would lessen impediments to appeal infringement allegations and require stronger indemnification policies for end-users.

HB 1084, filed by Rep. Jeff Brandes (R-St. Petersburg), would give the state's attorney general "more teeth in fighting these frivolous types of claims," Jared Ross, league senior vice president of association services/governmental affairs, told News Now.  

A companion bill in the Senate will be filed shortly, Ross said.