ABA, Trade Groups Call for Patent Reform in New Congress

Legislation to deal with “patent trolls” should more equitably distribute the cost of litigation, enhance transparency and improve patent quality, several financial trade groups told Congress yesterday.

The groups noted that financial firms are frequently harassed by letters demanding licensing fees for using common technology described by low-quality patents that are held by non-practicing entities, also known as patent trolls. Effective legislation would increase the legal costs borne by patent trolls and provide more information about the entities asserting the patents.

“[P]atent trolls continue to assert low-quality patents through vaguely worded demand letters with the full knowledge that their targets, our members, are more likely to pay unnecessary licensing agreements then engage in lengthy, costly litigation,” the groups said. “The deadweight cost of compliance with demand letters and the threat of litigation is ultimately borne by our customers.”

Read the letter.