WASHINGTON Pressured by the high tech and financial services lobby, President Obama issued an executive order aimed at reining in proliferating patent infringement litigation and called on Congress to take tougher steps to protect innovative high-tech businesses.
The move comes as a growing number of credit unions are being threatened by letters and lawsuits from purported patent holders with names like Automated Transactions LLC, Secure Axcess LLC, Wolf Run Hollow LLC and JOAC Bock Transaction Systems LLC. over new technologies favored by consumers.
The White House directed the U.S. Patent and Trademark Office to take five new actions that would help stem the rising tide of patent-related lawsuits tying up the court system. Many patent-holding companies, so-called “Patent Trolls,” with no intention of ever developing products, have made an entire business model out of suing other companies for patent infringement. Those firms which do not manufacture products use their sometimes questionable patents as leverage to obtain licensing fees. The companies say they simply are exercising their rights as patent holders.
The moves come amid a growing number of patent claims against credit unions and banks on emerging technologies, such as credit card technology, mobile banking and remote deposit capture. Dozens of credit unions and banks, along with service providers Fiserv, Jack Henry & Associates and FIS, were targeted just last week by one of the best-known patent trolls, DataTreasury, which claims the financial institutions are infringing on the company’s patents for RDC. DataTreasury already has succeeded in extracting tens of millions of dollars in license fees from the biggest banks after suing them for check imaging technology.
Under the Obama rules, the Patent Office will require that patent-holding companies disclose who really stands to benefit from a lawsuit and identify the ultimate patent holder for each application and assigned patent. In many cases, patent-holding entities will create shell companies that allow them to hide their identities, the scope of their portfolios, and connections with other patent-holders.
The White House wants the Patent Office to train examiners to cut down on overly broad patent claims, educate small inventors about how to deal with patent trolls, and expand its outreach to inventors to help develop policies and laws.
The President also ordered a review of the U.S. International Trade Commission, which has the ability to ban imports of goods deemed to infringe on patents. Patent-holding companies are increasingly taking their claims to the ITC, and the White House would like the Commission’s enforcement decisions to be made more transparent and efficient.
