A group of organizations including CUNA, NAFCU and ABA have united to call on Congress to pass legislation that combats patent abuse.
In a letter sent to Sen. Chuck Schumer (D-N.Y.) on Tuesday, the organizations made their case for passage of the Patent Quality Improvement Act of 2013.
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“In 2009, you along with Senator Jon Kyl of Arizona, led the successful effort to include in the American Invents Act a provision, which provided for the first time, an opportunity for the PTO (Patent and Trademark Office) to review certain business method patents against the best prior art. Important safeguards exist in the original provision to ensure that inventors are not harassed or unduly burdened,” they wrote.
“By all accounts, the program has been successful. Not only has the PTO been able to examine prior art and issues of subject matter eligibility to invalidate some low-quality patents, but the courts have better managed their own resources by staying cases pending PTO re-examination.”
The organizations said the Patent Quality Improvement Act would expand the AIA, signed into law by President Obama in 2011.
“S. 866 improves on your original provision while still maintaining important safeguards. By making the program permanent, you ensure that that full spectrum of low-quality business method patents will be subject to review if asserted under the threat of litigation,” they wrote.
“No longer will it be possible for patent assertion entities to wait for the period between the expiration of the program and the expiration of the patent to commence litigation. When the program was originally contemplated, we encouraged Congress to make the program permanent for that precise reason.”
The group also sent a letter to Sen. Orrin Hatch (R-Utah), the ranking member of the Judiciary Committee, in support of the Patent Litigation Integrity Act of 2013.
“To deter abusive patent litigation we must reverse the economic incentives that fuel frivolous patent infringement lawsuits. Fee shifting, or the ability of the court to award the prevailing party reasonable fess and other expenses, is a critical component to discouraging meritless lawsuits,” they wrote, arguing that the bill would give more power to the courts.
“The legislation ensures that fee shifting will be effective by empowering the court, on a motion from the defendant, to order the party alleging infringement to post bond to cover the other party’s expenses,” the letter said.
NAFCU Vice President of Legislative Affairs Brad Thaler told Credit Union Times that the bill would discourage patent letters from entities that do not have a reasonable claim.
“It will help ensure that those who send demand letters have legitimate claims and seeks to end the practice of patent trolls sending letters that they don’t have good standing on by hiding behind shell companies with no assets,” said Thaler.
CUNA, NAFCU, ABA, American Insurance Association, The Clearing House, Financial Services Roundtable, ICBA, NACHA – The Electronic Payments Association and National Association of Mutual Insurance Companies signed on to the letters.