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End 'legal extortion' by patent trolls, ICBA urges Congress

Last week, a member of the community bankers group pressed a House subcommittee to take three specific actions against trolls.

March 30, 2015

The Independent Community Bankers of America testified last week before Congress about the need to pass legislation to curb patent trolls. Testifying before the House Judiciary Subcommittee on Courts, Intellectual Property and the Internet, a representative of the association discussed the economic cost of patent trolls and how Congress can address the problem.

"Patent trolls practice a legal form of extortion," Kathryn G. Underwood, president and CEO of Ledyard Bank in Norwich, Vermont, told the subcommittee. "It's the patent troll business model, and it is especially disruptive when it is targeted at a small business with limited resources. ... Properly crafted legislation has the potential to significantly curb patent abuse."

According to an ICBA press release, Underwood described Ledyard Bank's experience as a victim of a patent troll, and cited a Boston University study estimating that patent trolls have cost the economy $29 billion since 2011.

Underwood called on lawmakers to advance legislation that would achieve three goals:

1. provide that, if a demand letter does not contain clear and detailed information about the patent, including the owner of the patent and what has allegedly been infringed, any civil action that is later brought by the troll would be dismissed;
2. make permanent the Patent and Trademark Office's Covered Business Method program, a post grant review proceeding to reexamine the validity of questionable business method patents; and
3. ensure that vendors who sell products or services to community banks provide the appropriate warranties and indemnification to protect end users from infringement claims.