NAFCU urges patent reform

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NAFCU Vice President of Legislative Affairs Brad Thaler

Dec. 17, 2013 – NAFCU Vice President of Legislative Affairs Brad Thaler wrote the leaders of the Senate Judiciary Committee on Monday to urge their support of patent reform legislation in advance of today’s hearing on patent-troll abuse.

Today’s hearing, “Protecting Small Businesses and Promoting Innovation by Limiting Patent Troll Abuse,” will feature testimony from representatives from the American Intellectual Property Law Association and several small businesses, including New England Federal Credit Union of Williston, Vt.

“A growing number of credit unions are reporting receipt of demand letters from law firms representing ‘patent trolls’ claiming patent infringement with an option to settle or face litigation,” Thaler wrote. “These deceptive letters are confusing and misleading as they often allege that the use of everyday technology violates the patent holders’ rights.  Further, these letters typically state vague or hypothetical theories of infringement, and often overstate or misinterpret the patent in question.  Because the cost of litigation is often more expensive than paying a settlement amount, ‘trolls’ use the threat of litigation as leverage to extract payment from the recipient business who settles in lieu of running the risk of a complex and lengthy legal battle.”  

Thaler continued, “As an issue of fairness, we urge the committee to pursue meaningful solutions to protect businesses of all sizes from these tactics.”

Thaler praised the “Patent Transparency and Improvements Act,” or S. 1720, for its provisions that would give the Federal Trade Commission more authority to go after deceptive patent troll letters. He suggested further language that would require minimum disclosures from such patent assertion entities to more truthfully identify themselves.

Thaler also urged the committee to create a fee-waiver provision for the Patent Office’s Transitional Program for the Review of Covered Business Methods Patents, which would help credit unions protect themselves from frivolous litigation.

Related Links:
NAFCU letter