Brad Thaler

As patent trolls continue to target companies with patent infringement lawsuits, bipartisan Congressional support is building to protect financial institutions.

The bipartisan Innovation Act, which cleared the House Judiciary Committee in November, is just one piece of legislation related to patent reforms that NAFCU supports.

"This legislation ... [makes] it more difficult and potentially costly for patent trolls to threaten businesses with questionable claims," says Thaler, vice president of legislative affairs, in an interview with Information Security Media Group [transcript below].

Patent Trolls

The number of patent infringement claims filed against U.S. banking institutions by patent-holding companies exploded in 2013 (see A Surge of Patent Infringement Lawsuits).

These companies 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.

In 2013, one of the world's largest patent-holding companies, Intellectual Ventures, filed infringmenet claims against leading U.S. banking institutions (see Patent Lawsuits Target Eight Banks and 5 More Banks Sued for Patent Infringement).

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.

NAFCU's Role in Legislation

TRACY KITTEN: Can you give our audience a bit of background around the role NAFCU plays from a legislative perspective?

BRAD THALER: NAFCU is the leading trade association for the concerns of federal credit unions on Capitol Hill. We advocate for federal credit unions on a range of issues that impact them legislatively, from protecting the credit union federal tax exemption to seeking regulatory relief from ever-increasing compliance burdens, to even seeking more stringent data security standards for those who handle financial data and more.

Patent Reform

KITTEN: Patent infringement cases are getting increased attention and so-called patent trolling companies have dramatically increased the number of suits that they file against banking institutions claiming infringement of a number of technology-related patents. What can you tell us about the Innovation Act?

THALER: The Innovation Act, H.R. 3309, is a bi-partisan bill put forward by House Judiciary Chairman Bob Goodlatte from Virginia that seeks to make improvements to the Leahy-Smith America Invents Act. That act was landmark patent reform legislation just passed in 2011. From a credit union perspective, we had hoped the 2011 bill would help stem the tide of patent trolls sending demand letters and filing suits against credit unions claiming infringement of patents for programs that the credit unions have implemented. Unfortunately, the tide is still strong, not just for credit unions but for many out there.

Congress has heard the concerns of credit unions and these industries, and that has led to the introduction of the Innovation Act, which by the way was just reported out of the House Judiciary Committee earlier this week by an overwhelming bi-partisan 33-5 vote. This legislation seeks to build on the Leahy-Smith America Invents Act by making it more difficult and potentially costly for patent trolls to threaten businesses with questionable claims.