Brad Thaler

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In the wake of a surge of lawsuits, bipartisan Congressional support is building for a measure designed to help protect banking institutions from frivolous patent infringement claims, says NAFCU's Brad Thaler.

The bipartisan Innovation Act has cleared one key legislative hurdle, Thaler notes. The House Judiciary Committee recently approved the bill in a 33-5 vote.

In an interview with Information Security Media Group, Thaler, vice president of legislative affairs at the National Association of Federal Credit Unions, explains that the Innovation Act is one of several pending bills dealing with patent reform that NAFCU supports. To help build momentum for legislative reforms, "NAFCU is working with a number of groups, from banking associations to insurance companies ... any number of groups impacted," he says.

Patent Infringement Claims

The number of patent infringement claims filed against U.S. banking institutions by patent-holding companies has exploded this year (see A Surge of Patent Infringement Lawsuits). These companies, also known as patent trolls, often acquire patents from other companies and then attempt to enforce those patents by seeking legal damages for infringement.

In late October, 51 patent infringement suits tied to payments-related technology were filed by Long Corner Security, a Texas-based patent holding company, against U.S. payment card networks, payment processors and e-commerce sites.

Earlier this year, one of the world's largest patent-holding companies, Intellectual Ventures, filed infringement claims against leading U.S. banking institutions (see Patent Lawsuits Target Eight Banks and 5 More Banks Sued for Patent Infringement).

Other Legislative Efforts

NAFCU also is attempting to win Congressional support for new regulatory protections for banking institutions related to technology and card data losses after certain breaches, Thaler explains.

In its Five-Point Plan for Regulatory Relief, unveiled earlier this year, NAFCU recommends establishing national standards for the protection of all financial information, including payment card data. It also recommends holding merchants accountable for expenses, such as costs associated with card re-issuance, following a breach (see Hold Merchants Accountable for Breaches?).

"Many entities handle consumer financial data," he says. "When data breaches inevitably occur, the financial institution is left to clean up the mess."

But NAFCU's five point plan hasn't yet resulted in the introduction of new legislation. "Passing any legislation in the current environment is difficult," Thaler says. "But I'm optimistic we'll continue to make progress on the issues."

During this interview, Thaler discusses:

Why it could take a nationally publicized retail breach to spur Congress to take action to hold retailers accountable for card data losses; How banking groups are banding together to ensure all financial institutions have a united voice on Capitol Hill; and Steps banking institutions should be taking to ensure they stay up-to-date about legislative progress.

Thaler has been with NAFCU since 1999, and has served as vice president of legislative affairs since January 2011. For five years, Thaler has been listed as one of the most influential lobbyists in Washington by "The Hill" newspaper. Before joining NAFCU, he was a lobbyist for the Federal Managers Association.