TEXT OF COMMENTARY
Kai Ryssdal: Whenever you get a good election cycle going, candidates start railing against their opponents by saying they’re too close to lobbyists and special interest groups. This year’s no different.
But it’s tough to get any kind of consensus on what either a special interest group or a lobbyist actually is. Commentator Jeff Birnbaum has a good example.
Jeff Birnbaum: So how powerful are the nation’s richest industries? Pretty powerful, if a remarkable piece of legislation pushed by the nation’s largest banks is any indication.
The measure, which will come up in the Senate soon, would grant commercial banks immunity from an ongoing patent lawsuit. This would save them billions of dollars.
Congress has rarely granted anything like that before, but in this case, the legislation would prevent a small Texas company from collecting damages from banks for infringing on a patent — in this case, a patent for scanning and archiving checks. Banks use a system that does this sort of thing all the time to process more than 40 billion checks a year.
The U.S. Patent and Trademark Office says the company’s patents are legitimate, but the banks want protection from paying licensing fees anyway. This is where the power comes in.
Bank lobbyists blitzed the Senate last summer. They claimed the company’s patents were unfairly granted, so they persuaded the Senate Judiciary Committee to adopt the legislation. Neither the company nor its founder had any idea what Congress was up to until after the provision was already passed.
The good news for the company: The provision would not invalidate its patents.
The bad news: The banks wouldn’t have to compensate the company for infringement.
Consider that a royalty of just a couple pennies per check would translate into billions of dollars, but under the legislation, the banks would be allowed to keep all that money — and according to congressional estimates, the federal government would have to pay $1 billion to the company over 10 years as fair compensation.
Congressional backers of the legislation and the banks argue that the company is merely trying to shake down banks for licensing fees. The company insists that its founder invented the system and deserves those.
Whatever the facts, one thing is clear: Wealthy interests like banks have huge political clout, enough, perhaps, to save themselves several billion dollars by stopping a lawsuit already underway.
Ryssdal: Jeff Birnbaum is a columnist at the Washington Post.
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