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|August 8, 2014|
|TIPs Bulletin #14-15||MasterCard Revised Standards – Limitation of Liability of Cardholders for Unauthorized Use (“Zero Liability”)|
|July 16, 2014|
|TIPs Bulletin #14-14||Canada’s Anti-SPAM Legislation (CASL) and Its Impact to U.S. Credit Unions|
|June 30, 2014|
|TIPs Bulletin #14-13||Voluntary Liquidation|
|TIPs Bulletin #14-12||Annual Indexing of HUD’s Basic Statutory Mortgage Limits for Multi-Family Housing Programs|
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Whether the lawsuit is by an opportunistic patent holder merely seeking a quick buck (such as patent trolls) or the lawsuit is based on legitimate infringement of a patent, such lawsuits represent a significant threat to any defendant. Patent suits are, by nature, extremely expensive and time consuming.
When the focus of the patent infringement is within a product or service provided to or on behalf of a credit union by a vendor, protecting the credit union from these and other types of lawsuits often depends on a properly drafted indemnification clause.
A credit union should obtain a copy of the proposed contract at the beginning of the due diligence/negotiation process as opposed to waiting until the business terms are agreed upon. Attorneys stress that contract terms are as equally important as the business terms and should be negotiated in unison.
A credit union should also inform vendors from the onset of the negotiation process that it expects the vendor to "stand behind" its product and/or service. This means the credit union should demand indemnification from the vendor (or its agents, employees, subcontractors) not only for patent infringement, but also copyright and trademark infringement.
Furthermore, the credit union should demand indemnification against claims made by any third party which arises due to the vendor's (or its agents, employees, subcontractors) breach of the contract, negligence, and/or willful misconduct.
Elements of a Good Clause
The key to a good, properly drafted indemnification clause is to:
Limitation of Liability
Care must be taken if the contract has a limitation of liability section. Without a "carve out" for indemnification obligations, a vendor's maximum indemnification obligation would be up to the limitation negotiated.
This could leave the credit union liable to the third-party claimants for all amounts in excess of the limitation, even though the credit union had nothing to do with the issue under which the claim was made.
Therefore, limitation of liability sections are equally important to review and negotiate, as are indemnification clauses.
Recent lawsuits serve as a reminder to credit unions of the importance of having contracts reviewed by an attorney, not only for proper indemnification clauses, but to help limit credit union liability.
CFPB ISSUES FINAL 'TILA' ADJUSTMENTS
updated 08/19/14 11:35 AM
Rule Reviews Dollar Amounts
The Consumer Financial Protection Bureau (CFPB) is issuing its final rule on Truth in Lending Act (TILA) annual threshold adjustments, amending the regulatory text and official interpretations for Regulation Z, which implements TILA.
TIPs: MASTERCARD ZERO LIABILITY RULE
updated 08/12/14 10:29 AM
InfoSight Survey, FinCEN Advisory
The California and Nevada Credit Union Leagues have published TIPs Bulletin 14-15 (Technical Information and Procedures Bulletin), which addresses how MasterCard is revising its zero-liability rule in the United States by simplifying the language and applying the rule to all MasterCard-branded POS and ATM transactions (PIN-based).