Rarely do I deviate from 6 newsletters a year, but I am issuing this “Urgent Alert” because it contains information that will help you to best protect your bank should so-called intellectual property issues arise.
One of the non-financial terms that I always try to
negotiate in software vendor contracts involves intellectual property.
Because of the rise of so-called “patent trolls” and the ease with which
patents are being given, banks need protection from such claims. The
best way to handle this is to ensure that your vendor offers language
indicating that they will defend any such claims that are brought
against your institution. Now is a good time to review your current
contracts to ensure that they contain such a clause. If they do not,
contact your vendor and request that such language be added. I can
supply sample language if you need it, but in almost all cases the
vendor will have suitable language that can be added to your contract.
The most likely reason you don’t already have this language in a master
agreement is if you have just renewed such an agreement over and over,
never updating the language.
Several banks have already received a
letter regarding a certain issue surrounding mobile check capture. It
is likely that your bank will too. I want to encourage you to refer any
such claims directly to your software vendor(s) so that they can help
you to manage this. Please don’t respond directly to these letters, as
your vendor(s) are well aware of the situation and are best positioned
to respond. I would also advise you to alert your state and national
banking trade associations about the receipt of such a letter, as these
organizations are also working to help the industry manage such claims.
purpose in writing this alert is to make you aware of both the general
issue of your needing protection in the case of intellectual property
disputes, and the specific issue concerning mobile check deposit that I
expect you will see shortly in the form of a letter.
am not an attorney, and you should always consult an attorney about
legal matters. Please let me know if you have questions or if I can
assist you in any way.