Press
NAFCU letter ahead of tomorrow’s senate Judiciary Committee hearing “S. 1137, the PATENT Act – Finding Effective Solutions to Address Abusive Patent Practices”
The Honorable Chuck Grassley
Chairman
Committee on the Judiciary
United States Senate
Washington, D.C. 20510
The Honorable Patrick Leahy
Ranking Member
Committee on the Judiciary
United States Senate
Washington, D.C. 20510
Re: Tomorrow’s Hearing: “S. 1137, the PATENT Act – Finding Effective Solutions to Address Abusive Patent Practices.”
Dear Chairman Grassley and Ranking Leahy:
On behalf of the National Association of Federal Credit Unions (NAFCU), the only trade association exclusively representing the interests of our nation’s federal credit unions, I write today in advance of tomorrow’s hearing, “S. 1137, the PATENT Act – Finding Effective Solutions to Address Abusive Patent Practices.” On behalf of NAFCU member credit unions and the 100 million credit union members across the country, we appreciate the committee’s efforts to seek a legislative solution to the problems plaguing our nation’s patent system.
A growing number of credit unions are reporting receipt of demand letters from law firms representing patent assertion entities (PAEs), claiming patent infringement, with the option to settle or face litigation. These deceptive letters are confusing and misleading as they often allege that the use of everyday technology violates the patent holders’ rights. Further, these letters typically state vague or hypothetical theories of infringement, and often overstate or misinterpret the patent in question. Because the cost of litigation is often more expensive than paying a settlement amount, these “patent trolls” use the threat of litigation as leverage to extract payment from the recipient business who settles in lieu of running the risk of a complex and lengthy legal battle.
Abuses of the patent system by patent trolls through vaguely worded demand letters hurt everyone. NAFCU believes a legislative solution is necessary to address this issue. We commend the bill’s sponsors for introducing S. 1137. We believe that this bill is an important first step that can help curb abusive tactics of PAEs who use low quality patents to target businesses of all shapes and sizes. However, we believe further work must be done to enhance the language to curb deceptive demand letters, as well as work to ensure that meaningful opportunities exist for all sectors to challenge low quality patents and have them reviewed by experts at the Patent and Trademark Office (PTO) for validity.
As you consider the Patent Act, we urge you to address these issues in the most comprehensive way possible. We hope to continue to work with you to achieve this goal.
Thank you for holding this important hearing. If my staff or I can be of assistance to you, or if you have any questions regarding the impact of patent trolls on credit unions, please feel free to contact myself, or NAFCU’s Director of Legislative Affairs, Jillian Pevo, at 703-842-2836.
Sincerely,
Brad Thaler
Vice President of Legislative Affairs
cc: Members of the Senate Committee on the Judiciary