The Credit Union National Association urged Congress in a letter on Tuesday to make statutory changes to address “patent trolls”—companies that purchase technology patents and then sue alleged infringers, though the company may not market or use the technology.
Lawsuits related to patent trolls have increased substantially in recent years. CUNA said that, since 2005, the number of defendants involved in cases filed by patent trolls has quadrupled. Last year, patent trolls sued more than 7,000 defendants.
“We are concerned with the issue because credit unions have become a target of patent trolls,” CUNA Deputy General Counsel Mary Dunn said in the letter. “The past year has seen an increase in litigation and demands involving low-quality patents in an effort to extract settlements from credit unions. This is an abuse of the patent system. Credit unions aren’t out there stealing someone’s ideas—they are buying technologies from vendors in order to better serve their members. They should not be sued for doing that.”
CUNA said such lawsuits cost the U.S. economy $80 billion in 2011 and companies $29 billion in direct payouts.
The letter sent by CUNA was also signed by the Financial Services Roundtable, American Bankers Association, Independent Community Bankers Association and other retail groups.