Press
Credit unions testify against patent troll abuse at Senate hearing
WASHINGTON, DC (December 17, 2013) — Today, John Dwyer President and Chief Executive Officer of New England Federal Credit Union testified before the Senate Judiciary Committee on behalf of the Credit Union National Association to discuss patent troll abuse. Dwyer’s testimony is especially significant because he will be the only financial services representative speaking at the hearing today.
The Senate has prepared to take up the issue of patent reform legislation, as the issue of patent trolling has become increasingly problematic for credit unions. These so-called “patent trolls” use low-quality patents to make frivolous accusations against financial institutions in order to extract settlement money from credit unions and other entities. Credit unions have been sued for the use of certain ATM technologies, check imaging applications and check cashing applications, and providing members with mobile transactions through their smartphones.
In his testimony, Dwyer described his credit union’s personal experience with patent trolls, and proposes solutions to the problem.
Read excerpts of CUNA’s testimony:
“The patent troll business model has become a drain on the economy, one that tens of thousands of American financial institutions and small businesses hope this Committee will commit to stopping.”
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“Unchecked, the problem of demand letters will deter institutions like mine from using new technologies at all.”
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“It is because of their size that small financial institutions are especially vulnerable. Banks and credit unions are filled with staff in the business of managing risk, and in targeting small institutions that may not have a lawyer on staff competent to evaluate the claims, demand letters are sure to reach a captive mass of people who will be afraid of getting sued. Community bank and credit union CEOs like me will be willing to do almost anything to avoid the risk and uncertainty litigation creates.”
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“An entity that sends more than 10 demand letters in a single calendar year should be required to enter all letters into a registry that would be publicly available and maintained by a federal agency, perhaps the PTO or FTC. This is important for a variety of reasons. First, it would provide businesses that receive a demand letter with the ability to communicate with one another.”
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“A registry would also provide the FTC with the information it needs to conduct enforcement proceedings against abusive trolls, and would also remove one of the biggest factors of intimidation – the fear that you, alone, are being targeted.”
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“A particularly frustrating problem for small financial institutions, including mine, is that the vendors that sell us the technology very often refuse to stand by it when an infringement claim is brought.”
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“We believe that adding a right of contribution and/or mandatory joinder to the patent law would enable a more equitable distribution of liability between end-users and suppliers.”
For the full text of CUNA’s testimony please contact: bfishel@cuna.com