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FI coalition advocates for efficient alternative to patent troll litigation

The coalition seeks to challenge 'abstract idea' patents through a patent office appeals process rather than expensive courtroom battles.

March 10, 2015

Banks and credit unions are asking Congress to take an expedient path to the invalidation of "poor quality business method patents" following the Supreme Court's recent decision in Alice Corp. Pty. Ltd. v. CLS Bank Int'l,which established that a patent claim directed to an abstract idea is not patentable subject matter.

A coalition of bank and credit union associations outlined its position in a statement for the record in connection to hearings by the House Judiciary Committee Subcommittee on Courts, Intellectual Property, and the Internet.

Per the statement:

Currently, there are only two ways to get rid of business method patents that are invalid under [Alice]: (i) litigation in federal district court and (ii) the covered business method review proceedings before the United States Patent and Trademark Office’s Patent Trial and Appeal Board.

1. CBM review is substantially more efficient than district court litigation for disposing of business method patents now invalid under Alice

Litigation over whether business method patents are invalid under Alice places a substantial monetary burden on U.S. courts and the U.S. economy. CBM is the only viable tool for quickly, efficiently and cost-effectively eliminating covered business method patents that are invalid under Alice. ...

CBM review proceedings are statutorily required to be complete within eighteen months. In contrast, the median time to trial for patent litigation cases in district court takes about 66 percent longer (30 months total). ...

Not only are CBM reviews substantially faster, they are also much less expensive than district court litigation. ... The median patent litigation cost for cases proceeding through trial range from $2,000,000 to $5,500,000 where the damages at-risk exceed $1,000,000.

In stark contrast, the USPTO estimated that the cost of preparing a petition for CBM review to be about $61,000.

Read the entire statement.

Signatories to the statement included: American Bankers Association ; American Insurance Association ; The Clearing House Payments Company L.L.C.; Credit Union National Association; Financial Services Roundtable; Independent Community Bankers of America; National Association of Federal Credit Unions; and National Association of Mutual Insurance Companies.