White House Spotlights Patent Trolls

June 5, 2013 at 7:50 am 1 comment

imagesWhen it comes to patent trolls, the White House is mad as hell and not going to take it anymore.

Patent trolls are companies that specialize not in developing technology but in buying it and then trolling around for patent violations.  Yesterday, the White House unveiled Executive orders and legislative proposals designed to crack down on these potentially parasitic interlopers.  As any credit union that has received those increasingly ubiquitous demand letters informing them that they are violating registered patents with their ATM technology and graciously offering to forego litigation in return for a licensing fee knows, there has been an explosion in patent litigation that is impacting virtually every business in this country.

The problem is while the President’s Executive Orders and legislative recommendations announced yesterday put a spotlight on an extremely serious problem, there is very little he can do without the help of Congress.  For example, he would like to give federal courts more power to make the losing party in a patent lawsuit pay the legal costs.  Right now there is very little disincentive for patent trolls to cast their net of potential violators as widely as possible, which is why credit unions have been confronted with allegations that they are violating technology over which they often have absolutely no control.  Under the President’s Executive Orders patent examiners will be given training to enable them to more closely scrutinize technology patent applications, particularly related to claims of exclusivity for the functional use of software technology.

I admit this may sound like dry stuff but as technology gets more complicated unless the law evolves to keep up with it, credit unions of all shapes and sizes will have to choose between retaining a patent attorney or settling lawsuits they know to be frivolous.  It’s the type of cost that legitimately gets people angry about our legal system.

FIS Security Breach Larger Than First Reported

Speaking of the impact that technology has on credit unions, you may want to take a look at this blog posting outlining the extent of last November’s break-in of FIS.  As the CU Times reported yesterday, the breach was “far more extensive and serious” than previously disclosed by the corporation.  Considering that FIS is one of the largest information processors for financial institutions in the world, this is the type of report that can send chills down  the spine of your IT team.  As a result of last November’s break-in, FIS first reported that approximately 7,170 accounts may have been put at risk.  The hackers  used an increasingly common scheme in which they were able to break into FIS networks and eliminate withdrawal limits on debit and prepaid cards.

NCUA Releases Quarterly Review Of Industry Trends

NCUA released its latest snapshot of credit union growth trends.  The report, which includes a state by state comparison of key credit unions data, indicates that New York credit unions continue to perform above the national average in many key categories.

Entry filed under: Compliance, Legal Watch, New York State, Regulatory. Tags: , , .

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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