- ICBA is committed to further raising community bank awareness and to providing resources to assist community banks in responding to demand letters sent by plaintiff law firms alleging violations of the Americans with Disabilities Act (ADA) accessibility requirements for electronic banking services as well as traditional patent assertion entities (PAE), or “patent trolls,” that allege unfounded patent infringement claims.
- ICBA urges Congress to amend current law to ensure that vendors that sell products or services to community banks provide the appropriate warranties and indemnification to protect end users from infringement claims.
Managing aggressive and frivolous demand letter claims has become an expensive distraction for a steadily-increasing number of community banks that often lack the financial and legal resources to properly dispute these claims. These claims sap valuable monetary, time, and legal resources from community banks that would otherwise be directed toward serving the financial needs of their customers. Law firms often use settlements to build war chests to assert more claims against other legitimate small businesses, including community banks.
Community banks across the country are experiencing a dramatic increase in the number of demand letters from plaintiff law firms alleging violations of the Americans with Disabilities Act (ADA) accessibility requirements for electronic banking services. These demand letters are different from typical demand letters received by community banks asserting violation of a patent or a suite of patents held by a PAE. Whether the sender is a plaintiffs’ law firm or a more traditional PAE, compliance with the demand letter strengthens its incentive to target additional community banks to extract exorbitant and fraudulent fees. ICBA offers guidelines to assist community banks in responding to these demand letters. Before responding, community banks should reach out to ICBA and/or their affiliated state association for guidance.
Community banks often white-label products that are purchased from vendors to serve their customers. As “end-users” of these products and services, community banks should not be on the hook for the infringement claims of PAEs.
Community banks are especially vulnerable to the threat of legal action because they lack the resources and market power to fairly negotiate the protections they need when contracting with large sophisticated technology vendors. The vendors that provide these products and services to community banks often do not stand behind them. As a result, when a community bank is accused of infringement, the vendor, though better situated to refute the claim, sits on the sidelines and refuses to defend their customers. Congress should enact new laws to ensure that vendors that sell products or services to community banks provide the appropriate warranties and indemnification to protect end-users from infringement claims.
Staff Contacts: Aaron Stetter, Cary Whaley, Rhonda Thomas-Whitley