CUNA, the American Bankers Association and the IndependenceCommunity Bankers of America have teamed up to support the proposedTransparency in Assertion of Patents Act (S. 2049).

“S. 2049 would clarify the Federal Trade Commission (FTC)'sauthority to help fight back against deceptive practices byrequiring basic information be included in letters sent by patenttrolls,” said their letter to Senate Commerce, Science andTransportation Committee Chairman Jay Rockefeller (D-W.Va.) andRanking Member John Thune (R-S.D.) on Thursday.

“The required information is elementary, such as the owner ofthe patent and specific technology involved. This will help thevictims of trolls to quickly and inexpensively understand theinfringement claim and how best to respond to it,” the letter also said.

Rockefeller and Sen. Claire McCaskill (D-Mo.) are sponsoring thebill.

The financial trade groups applauded the bill for tackling theproblem of “unfair and deceptive” demand letters while allowinglegitimate patent holders to exercise their patent rights.

“S. 2049 would also benefit legitimate patent holders becausethe FTC would be allowed to specify exactly what constitutes adeceptive demand letter. This would provide patent holders withcertainty of how to assert a patent without any risk that it couldbe labeled unfair or deceptive,” the trade groups wrote.

“Civil penalties would be imposed on those that continue to sendout 'bad faith' demand letters, with exceptions provided forcommunications between parties on existing licensing agreements,”their letter also said.

The organizations said there are many examples of patent trollsusing fraud or extortion to sell patent licenses to a bank orcredit union.

“Financial institutions, especially small institutions, are notfamiliar with the patent system,” they wrote. “Rather, banks andcredit unions are in the business of managing risk, and intargeting small institutions that may not have a lawyer onstaff competent to evaluate the claims, patent demand lettersreach a captive mass of people afraid of getting sued.”

Brad Thaler, NAFCU vice president of legislative affairs, spoketo CU Times about why his trade association was notincluded in the letter.

“NAFCU is in support of the bill and will be sending our ownletter on it. It was originally scheduled for mark-up this week,but was postponed until next week. We thought it would be best tosend our own letter of support in conjunction with the mark-up incase there were any late developments,” he said.