“We are encouraged by your efforts and believe it is an important step toward developing a bill that can eventually be enacted into law to help curb abusive tactics of non-practicing entities (NPEs) who use low quality patents to target businesses of all shapes and sizes,” the letter read. “However, further work must be done in the area of patent quality to ensure that meaningful opportunities exist for all sectors to have low quality patents reviewed by the experts at the Patent and Trademark Office (PTO) for validity.”

In June, NAFCU told House Judiciary Committee Chairman Bob Goodlatte (R-Va.), and Ranking Member John Conyers (D-Mich.) in a letter that a growing number of credit unions are reporting receipt of demands claiming patent infringement, with the option to settle or face litigation. The committee is considering H.R. 9, the “Innovation Act.”

“As you consider H.R. 9, we urge you to ensure that demand letters include clear and detailed information, such as the owner of the patent, what entities have a financial interest in the patent, what product or service is allegedly being infringed and how such product or service infringes the patent,” NAFCU Vice President of Legislative Affairs Brad Thaler wrote. “Without this information, credit unions, especially smaller ones, have no way to effectively evaluate the merits of the demand letter.”

A report, “Patent Assertion and U.S. Innovation,” issued by the Executive Office of the President in June 2013, said that suits brought by PAEs tripled in just the last two years, rising from 29% of all infringement suits to 62% of all infringement suits.

In December 2013, John Dwyer, president/CEO of $1.07 billion Williston, Vt.-based New England Federal Credit Union, testified before a Senate hearing on legislation to combat patent trolls described how his credit union found itself in the midst of expensive discovery in a patent infringement case related to 23 ATM machines. “The case has been a costly and distracting headache,” he said.

The case began, Dwyer explained, with an “ill-researched, vague demand letter” that referred to his credit union as a bank, did not specify which of his credit union's ATM machines allegedly infringed upon the patent, and contained absolutely no information as to why the entity believed the credit union infringed. Dwyer told the committee that almost every credit union in Vermont had received the same demand letter, including one that does not own any ATMs.

Dwyer described an additional patent troll letter offering a financial institution “a special, one-time, limited-time offer” for smaller banks such as his to receive a fully paid sub-license for $2,000 per ATM, and eventually upped this demand to $5,000 per ATM.