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Lawmakers Debate Patent Immunity For Banks

Posted by kdawson on from the campaign-contributions-are-merely-a-coincidence dept.

I Don't Believe in Imaginary Property writes "Now that a small Texas company has a patent on scanning and archiving checks — something every bank does — that has survived a USPTO challenge, lawmakers feel they have to do something about it. Rather than reform patent law, they seem to think it wiser to protect the banks from having to pay billions in royalties by using eminent domain to buy the patent for an estimated $1 billion in taxpayer money, immunizing the banks. The bill is sponsored by Sen. Jeff Sessions (R-AL)."

11 of 382 comments (clear)

  1. Well can't say I blame em. by Chris+Burke · · Score: 3, Interesting

    I mean, it's not like substantive patent reform -- in particular reform that as a side effect fixes this specific case -- is something they can exactly toss together before the term is up. And now that pretty much everyone realizes our economy is treading water before a recession, keeping the banks up seems like a good idea. I mean if we're going to be spending billions in tax payer money to keep banks afloat after the subprime mortgage fiasco, this doesn't seem like that big a deal.

    Sometimes a band aid is better than a hastily planned and thus ill-conceived surgery.

    --

    The enemies of Democracy are
    1. Re:Well can't say I blame em. by TubeSteak · · Score: 5, Interesting
      FTFA:

      The banks allege that DataTreasury bought up patents for the system that underlies electronic transfers and is trying to shake down companies for licensing fees. But DataTreasury asserts that Ballard is the inventor of the system and built a company to sell it before being squashed by banks that stole his idea. Court battles have raged between the two sides for six years.
      ...
      He said he talked to some bank officials at an early stage of the check system's development and, despite having signed nondisclosure agreements with them, soon lost control over his invention. It sounds like maybe the banks got themselves into this mess and perhaps deserve what is coming to them.

      Not to mention that Senator Session's explanation sounds a bit dishonest:
      "in the wake of the grounding of aircraft laden with billions of dollars in checks after the Sept. 11, 2001, attacks -- federal law was changed to allow electronic transfers as well."

      "Stephen Boyd, a spokesman for Sessions, said the provision "is designed to protect banking institutions complying with post-9/11 security requirements from the abusive practices of patent trolling trial lawyers"

      Which is it?
      Were electronic transfers allowed by the Feds or required by post 9/11 security requirements?
      This whole thing reeks of corporate asshattery.
      --
      [Fuck Beta]
      o0t!
  2. Is anyone really surprised by this? by ashridah · · Score: 4, Interesting

    If you consider that pretty much all money in existence today is backed solely by debt, is anyone really surprised?

    Why does anyone entertain the idea that the banks need to be bailed out? I would be inclined to let the economy finally crumble, and rebuild it. Sure, it'll suck, but we'll be better off because of it, if we fix it the right way.

    1. Re:Is anyone really surprised by this? by ashridah · · Score: 2, Interesting

      The problem is, backing it by debt is inherently untenable in the long term. Once the debt is paid off (a noble goal, but not actually possible in practice,) there is no longer *any* money, resulting in the downfall of the economy.

      This problem is compounded when you consider that even if the economy is based on some amount of principle, and money is created out of the principle, and adds overhead of interest, then the only way to pay back any loans requires the creation of more principle. But when all principle is created out of debt, then there can never be enough money to pay off the interest. It's worse than a zero sum game.

      Obviously, we cannot base the economy on physical objects either. They're not convenient, and we'd wind up replacing them with some kind of convenient representation, and we'd wind up back where we started, as the representation would need to be controlled. There are things that cannot be replicated however. Work is one of them. See LETS (Local Exchange Trading System) for instance. It's unfortunate that it sounds similar to communism, yet you can easily turn it into a capitalist-like society, since it can be built without government control (and thus, is not actually communist either)

    2. Re:Is anyone really surprised by this? by twiddlingbits · · Score: 3, Interesting

      Ok, approach it scientifically and

      You'll see stock prices are random. Study after study proves it. It's not a mystery but there isn't a formula either.

      You'll see that cutting tax rates leads to increased Gov't revenues by growing the economy. (Don't give me the crap about Reagan, he spent it and then some but it busted the Soviet Union..not a bad use of the money).

      You'll see the greater than 50% of the Budget goes to Social Programs started in the New Deal and continued to this day. Remember the real cost of Social Security is not well known, it's an off-budget item. And these costs are growing. Medicare alone is predicted to outgrow the growth in GNP (and thus increases in taxes if rates remanin constant) by several hundred percent.

      You'll see most people who are retired can't live on Social Security alone. So much for that program.

      You'll see that black Americans still are very improverished, and we now have a class of citizens who have been on welfare for generations. Is that helping anyone?

      You'll see that other than in 1996 when the Republicans kept their majorities in both the Senate and the House, marking the first time since the late 1920s that Republicans comprised a majority of the House for two consecutive sessions. Republicans held a majority in the U.S. Senate from 1981 through 1986 as well (Reagan 1st term), for one year in 2000 again in 2002 but not since. You can't blame long term problems on groups who haven't been in control of the process.

      You'll see a failure to increase a program budget by the proposed X% is called a "cut". If your boss didn't give you that 10% raise did your salary go down?

      It's just flat incorrect when you look at facts (scientific methods look at facts not opinions) to blame anyone but the liberal Democrats for the social spending problems we have. Democrats controlled Congress for 80% of the time, and they built the programs and they continued to fund them at increasing rates. Yes, the War in Iraq has taken money in recent years and made things worse but that's a blip of 6 yrs on the radar screen of close to 70 yrs of social spending.

    3. Re:Is anyone really surprised by this? by ashridah · · Score: 2, Interesting

      Because the bank has more money on hand, it can loan someone else money to open a bakery

      Banks do not need 'money on hand' to create a loan. A Loan, currently, based on fiat, is created out of a ratio of money on hand, and in many cases, out of nothing!
      If a bank can create money at will, based on nothing, then where does the money to pay interest come from?

      For that matter, if you lower the price of milk by producing more of it, then all milk producers earn less, overall. Less is available to pay their workers, and thus, the milk industry loses in proportion to the amount of milk produced. Thus, the system creates no new value at all. Also, if you're opening the dairy, where does the capital come from? The bank? If you take out a loan, your Dairy belongs to the bank. In order to pay it off, you need to pay off the debt, which includes the principle *AND* the interest. But in a system founded on debt, the interest represents an amount that cannot exist.

      So, inevitably, all things will eventually belong to the bank, since the system *must* crash, eventually.

  3. other option... by youthoftoday · · Score: 3, Interesting

    The US government has consistently demonstrated innovation in this area. I think the ideal course of action would be to bomb the headquarters of the patent troll company. End of bank cheque problem. End of patent troll problem. Zero litigation.

    --
    -1 not first post
  4. I Can See The Future... by GaryPatterson · · Score: 3, Interesting

    ... and it's not pretty.

    Giving a patent holder a billion dollars to buy their patent will encourage patent trolls to come out in force. The government's giving away billions here, why not give it a go? You can patent something obvious, sue the banks and donate to the political parties. Soon enough someone will buy you out, and you get to retire a very wealthy person!

    Sure, it may not work out so easily, but what's to stop anyone from trying?

  5. Business methods should not be patentable by belg4mit · · Score: 3, Interesting

    And that includes 1-click, etc. BofA has a patent on "Keep the Change," an admittedly clever idea,
    and so Wachovia has to opt for the less user-friendly: take a dollar on every transaction. (Actually,
    they could presumably go for the "X% of the transaction value")

    --
    Were that I say, pancakes?
  6. I don't get it. by ACMENEWSLLC · · Score: 2, Interesting

    There must be something special about the check 21 aspect of this. We have been scanning and indexing checks in an imaging system and mentioned in the patents, since 1991. We've used ASCII and EBCDIC, Optical Jukeboxes, etc as described by the patent. Some of the checks use overlays so we can save disk space by storing the ASCII text separate from the check image. All of this since 1991.

    So what is so special about the Check 21 (check truncation) that warrants a patent?

  7. Re:Well, now... by bl4sphemy · · Score: 2, Interesting

    As an Alabamian, I have to completely agree with this statement. Jeff Sessions (and our other senator, Richard Shelby) are both retarded and corrupt to the depths of their nonexistent souls. If only other people in Alabama had half a fucking clue about how terrible they are we would be a lot better off. Buuuuuut instead we get shafted by putting the same corrupt politicians in power that don't give a damn about their constituents and are only there to pad their wallets. Fucking disgusting...