Community Bankers of Iowa Monthly Banker Update June 2014 | Page 15

Washington Watch
Written By: Aaron Stetter - ICBA

Stopping the Patent Shake-down
Over the last several years,
community banks have seen a serious
uptick in the number of “demand
letters” they receive from unscrupulous
Patent Assertion Entities (PAEs),
also known as “patent trolls,” that
assert infringement of dubious-quality
patents against legitimate businesses,
including many community banks.
These frivolous claims have become
an expensive distraction for the industry as they sap valuable
monetary, management and legal resources from community
banks that would otherwise be directed toward serving the
financial needs of their customers.

with Congress to support legislation that would eliminate the
ability of patent trolls to hide behind shell corporations; disarm
trolls by improving patent quality; make it easier to punish
trolls that send fraudulent and abusive shakedown demand
letters; protect end-users of technology, such as community
banks, by providing a consistent application of the customer
stay when the manufacturer is best positioned to fight the troll;
as well as make trolls bear the financial costs when they sue
companies frivolously and lose in court.

According to a study from the Boston University School of
Law, direct costs associated with litigation or the threat of
litigation brought by patent trolls are substantial, totaling an
estimated $29 billion in accrued litigation and non-litigation
costs in 2011.
For months ICBA has been working with Congress and the
Obama administration to protect community banks from
these abusive patent infringement claims. ICBA has met with
White House officials on patent-reform initiatives, including
the development of a new Patent and Trademark Office
online toolkit. The toolkit is designed to empower those that
have been targeted by patent trolls with resources to make
informed decisions about the available options they have to
push back against these often fraudulent claims.
Working with ICBA, Congress enacted the Leahy-Smith
America Invents Act in 2011, which established a transitional
proceeding at the Patent and Trademark Office—known as a
Covered Business Method review—to re-examine the validity
of dubious business-method patents. If made permanent and
more accessible to community banks that may lack financial
resources to cover the initial filing fees, the reviews could
become a valuable tool to combat these frivolous patent
claims.
Additionally, ICBA is working with a coalition of industry trade
groups, known as the Main Street Patent Coalition, to urge
lawmakers to enact additional legislative reforms to fully
address fraudulent patent abuses from patent trolls. ICBA and
our coalition partners are continually engaged in a dialogue

These actions would increase transparency in an extremely
murky legal area and pr