Credit unions are pushing for passage of a patent reform bill that the Senate is likely to vote on soon that could limit their exposure to patent infringement lawsuits.

At press time, it was likely to pass a bill that would make it harder for holders of “business method” patents which cover processes such as electronic filing of documents, to sue financial institutions such as credit unions. Under the bill, credit unions and banks accused of patent infringement to demand a review of the patent by the U.S. Patent and Trademark Office. It passed the House in June.

Last week, the Senate voted 93-5 to proceed with consideration of the measure.

CUNA, NAFCU and CUNA Mutual have been among the credit union-related entities that have been lobbying for the measure, which is also backed by the banking lobby. None of the credit union organizations could say how much money credit unions have lost because of lawsuits that have been filed accusing them of patent infringement.

“This will stop frivolous lawsuits and thus save credit unions money,” said John McKechnie, who has lobbied on the issue for CUNA Mutual.

House Judiciary Committee Chairman Lamar Smith (R-Texas), who sponsored the bill in that chamber, said in a statement that the provision pushed by banks and credit unions was needed because of the large number of “bad” patents issued in the 1990s and 2000s.

“If a patent is bad and shouldn't have been issued in the first place, there was no property right properly established,” he said.

NAFCU Vice President Brad Thaler said the passage might “insulate credit unions from a possible onslaught of litigation that might come.” CUNA Senior Vice President for Legislative Affairs Ryan Donovan said lawsuits have “been a problem for a couple of credit unions, but we are trying to avoid a bigger problem.”

In June, two CUSOs and three credit unions were among defendants named in a patent lawsuit brought by London-based technology vendor Serverside Group.

The firm, which provides design, marketing and printing services to the international card payment industry, alleges the defendants “infringed upon U.S. patent right as to financial transaction card customization technology,” according to the lawsuit.

The defendants included CUSOs PSCU Financial Services in Florida and The Members Group in Iowa.

The credit unions named are the $1.3 billion Anheuser-Busch Employees CU and the $274 million Neighbors CU, both in St. Louis and the $753 million Credit Union 1 of Anchorage.