Kennedy Sutherland’s Senior Attorney, Karen M. Neeley, was quoted on September 15 in an article that appeared in Bloomberg on “New Technologies Make Banks Magnet for Patent Trolls.”
Background: In recent years, companies have emerged with a business model of purchasing or licensing patents from inventors (often in the areas of software and technology) and then sending demand letters to businesses alleging patent infringement and threatening litigation unless the infringers pay a fee. Companies purchasing patents are known as patent assertion entities (PAEs) or “patent trolls.” Because of the complexity of patent law, the loose descriptions used in some patents, and the high cost of patent litigation, many businesses settle these claims even though the claims may be without merit. Financial institutions have increasingly been targeted.
In May, a letter from financial services organizations told the U.S. Senate Judiciary Committee in a letter that an increase of almost 290% in litigation by PAEs from 2009 to 2013 is a threat to financial institutions of all sizes. Legislation is currently being discussed in Washington to combat this issue.
On September 15, 2014, Neeley provided testimony on behalf of the Independent Bankers Association of Texas to the Senate State Affairs Committee on Patent Assertion Entities.