Slashdot Mirror
Small Firm Claims Patents On e-Banking Processes
bth writes "The New York Times has a
report that DataTreasury Corp is suing banks over 2 patents that 'describe a way to store and retrieve transaction records electronically.' A patent search reveals US6032137 and US5910988, each having the title: 'Remote image capture with centralized processing and storage -- System for central management, storage and report generation of remotely captured paper transactions from documents and receipts.' From one of the abstracts: 'The system retrieves transaction data such as credit card receipts checks in either electronic or paper form at one or more remote locations, encrypts the data, transmits the encrypted data to a central location, transforms the data to a usable form, performs identification verification using signature data and biometric data, generates informative reports from the data and transmits the informative reports to the remote location(s).' It is good to know that someone has managed to finally invent a system that can store, retrieve, and securely transmit financial transactions."
Well...if someone already patented the combover (U.S. Patent # 4022227), then anything is possible. Go for it!
in the uk they aren'tat least not at the moment
Small Company Is Specializing in Suing Banks
By JENNIFER A. KINGSON
New York Times
December 25, 2004
It is a company whose only business, other than one client, appears to be suing other companies.
The lawsuits contend patent infringement, yet the defendants are usually not electronic commerce companies, but a relatively new target: banks or others in financial services. The company, the DataTreasury Corporation of Melville, N.Y., has sued companies that it says have infringed on its two patents, which describe a way to store and retrieve transaction records electronically. Generally speaking, this is already the way that credit card transactions are processed and, increasingly, the way that paper checks are handled, too.
Among the dozen or so companies that DataTreasury has sued are J. P. Morgan Chase & Company, one of the biggest banks; the First Data Corporation, the biggest credit card processor; and the Electronic Data Systems Corporation, another big processor.
DataTreasury declined to comment for this article, as did most of the companies it has sued.
The suits are wending their ways through courts in Texas that lawyers say are well known for upholding the rights of patent holders. They seek unspecified - but treble - damages, and to ban the companies from using the processing architecture that the patents describe.
This type of litigation is unusual for financial services, which has taken for granted that there are certain basic ways to process payments. Although banks did not bother to patent these systems, others did, especially after a 1998 court ruling broadened the definition of a patent to include business methods and processes. At the time, the United States Patent and Trademark Office was swamped with technology-related applications, and knew very little about the processing of payments.
"Obviously, no one has a patent that covers all checks or processing," said Michael D. Bednarek, an intellectual property lawyer who was once an examiner at the Patent and Trademark Office.
Companies like DataTreasury may have a patent on an aspect of the process, but "even that arcane feature may be something that has been done before," he said. "Patent officers aren't necessarily experts. Almost certainly, if they were aware of this, they wouldn't allow someone to get a patent on it."
A new check processing law, known as Check 21, raised the hopes of DataTreasury and other such patent holders because it gave banks broader permission to shred paper checks and keep electronic images of them. The law took effect in late October.
DataTreasury is clearly hoping for a bonanza. According to court documents, one of the two law firms originally hired to file the lawsuits is working for a contingency fee of 40 percent, with a cap that was raised from $100 million to $225 million.
So far, two companies have paid DataTreasury to settle: Affiliated Computer Services, one of the nation's biggest information technology suppliers; and the RDM Corporation, a small Canadian company that sells hardware and software for payment processing.
"It was a nuisance lawsuit to us, and it was the most efficient decision to settle it for a minimal amount," said Lesley Pool, a spokeswoman for Affiliated Computer. She would not say the amount, but an article in The Dallas Business Journal, which DataTreasury has linked to its Web site, said it was $50,000.
As for RDM, DataTreasury issued a news release saying that the Canadian company would pay a fee for each check imaging terminal it deploys and "a per-click royalty for storage of electronic documents and check information, calculated at around a 50 percent royalty rate."
Before Affiliated Computer settled, it did answer the lawsuit in court, calling DataTreasury's patents invalid and unenforceable. In papers filed in the United States District Court for the Eastern District of Texas, Affiliated Computer accused DataTreasury of deceiving the Patent and Trademark Office by
Banks have been doing this for over twenty years. Remote machines scan documents (checks/statements etc), store them in a local central database. Then nightly these transactions are electronically moved by the FED.
I hope IBM/NCR sue the crap out of this company.
Merry Chistmas and enjoy.
It's just the normal noises in here.
The title of a patent is meaningless. I read one last week for "Remote Control Device" which was a high pressure hydraulic hoze/nozzle that could be aimed from a distance, used in mining operations. There is no legal weight in a patent title and while the intention is that they are informative, there is uneven enforcement of that rule.
From one of the abstracts: 'The system retrieves transaction data such as credit card receipts checks in either electronic or paper form at one or more remote locations, encrypts the data, transmits the encrypted data to a central location, transforms the data to a usable form, performs identification verification using signature data and biometric data, generates informative reports from the data and transmits the informative reports to the remote location(s).'
The abstract of a patent has no legal weight. The rules regarding abstracts are more evenly enforced than titles, as the abstracts are useful to examiners, but the typical attorney couldn't care if the abstract recited a recipe for meatloaf.
Here are the patents under debate:
6032137
5910988
Linking to the actual patent is trivial, however undermines the element of FUD which wins the submitter such karma and peer approval. (Rather than mod this as a troll, proving at least to myself how correct I am, feel free to explain to me why failing to link to the patents themselves helps an intelligent discussion rather than perpetuating the FUD.)
The claims of a patent are the only part of a patent that undisputably carries legal weight. Any discussion about whether a patent should or should not have been issued that does not relate strictly to the claims is nonsense - it is directly analogous to praising Windows because you can use a mouse on a graphical screen. It is uneducated, pointless, and irritating to anyone who knows that other operating systems use mouse pointers and graphical screens.
Further, these patents will come under extreme attack if they are used in court. Merely having these patents is meaningless. When these patents are used against someone, he would be a complete idiot to not first question whether the patents can be invalidated in court. This is how the patent system works and this is why you can apply for a patent for under $2000 - a thorough search for prior art will cost over $100,000 and the USPTO cannot afford to give those out for $2000. Only the media and those who do not properly understand the existing system of patent litigation expect the USPTO to provide a perfect search of prior art for 2% of the market value of such a search.
In conclusion, while there may be a great deal of problems with these patents, and plenty of legitimate complaints about the how the system works, the submitter of this story addresses nothing but meaningless and baseless fluff. There would be more substance to the complaints if he griped about the poor scan quality of the documents. Please keep in mind that I'm not arguing the merits of these patents, but rather pointing out that the submitter addresses no valid complaints because, by analogy, he's busy arguing whether the Windows is better than OSX by pointing out how pretty the Windows desktop is.
But moderators, if you fear that facts might interfere with your self-affirmation, by all means convince me that I'm correct (regarding the subject line) and moderate this as a troll.
And that's why so many people are pissed about the direction the PTO has taken in accepting (and approving) these nonsense applications.