Newsroom

Panelists agreed that abusive patent demand letters must be addressed during a hearing by the House Judiciary Subcommittee on Courts, Intellectual Property and the Internet on how H.R. 9 could protect businesses from frivolous patent litigation.

The legislation was introduced by Rep. Bob Goodlatte, R-Va. During the hearing, Rep. Judy Chu, D-Calif., noted that she has heard from credit unions about their problems with demand letter abuse.

Earlier this week, NAFCU Vice President of Legislative Affairs Brad Thaler urged the subcommittee leaders to take legislative action to address the abusive patent litigation from patent trolls that continues to harm the credit union industry.

Thaler wrote Subcommittee on Courts Intellectual Property and the Internet Chairman Darrell Issa, R-Calif., and Ranking Member Jerry Nadler, D-N.Y., to remind them of the cost of abusive litigation to credit unions.

"A growing number of credit unions are reporting receipt of demand letters from law firms representing patent assertion entities, claiming patent infringement, with the 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."

"NAFCU believes a legislative solution is necessary to alter the intimidating business model used by these patent assertion entities and will continue to be supportive of any congressional effort to curb these practices," Thaler continued. "We urge the subcommittee to take action to address this abusive practice."

The hearing featured testimony from representatives of Overstock.com, Inc., Ledyard National Bank, TMSOFT, LLC, and ElliptiGO, Inc.