Should Fannie Be Forced to Relinquish Patent?

The Office of Federal Housing Enterprise Oversight has the regulatory authority to force Fannie Mae to relinquish control of a patent on a process for customizing mortgages and turn it over to the public domain, according to the Consumer Mortgage Coalition.In addition, the CMC maintains that its legal research shows that Fannie violated its government charter by acquiring a patent involving the mortgage origination process. "OFHEO has authority to address such charter act violations by the company," CMC executive director Anne Canfield says in a Nov. 2 letter to OFHEO Director James Lockhart. An OFHEO spokeswoman declined to comment specifically on the CMC letter. But she did say that Mr. Lockhart "has discussed the issue with interested parties and anticipates a resolution shortly." The CMC, along with six other industry groups, is pressing Fannie to place the patent in the public domain so that everyone can use it or design their own systems without fear of potential litigation or monetary penalties for patent infringement. Fannie Mae contends that it has a right to protect its intellectual property and has no plans to pursue the loan customization process. "We plan on allowing primary-market participants to use this tool, which, after all, is intended to help people get fair mortgages," Fannie spokesman Brian Faith said.