We recently posted about how Alabama Republican Senator Jeff Sessions stuck an amendment into the patent reform bill designed to take the burden off his pals at the nation’s largest commercial backs and screw a small company that owns the patents that the banks want to use for free. The net of the amendment will be to shift the cost of the infringement off the banks and onto the taxpayers.
The battle has now taken a turn for the worst, with banks trying smear DataTreasury and its principles publicly in order to turn attention away from the facts, according to this post at Politico.
Bank lobbyists categorize DataTreasury as a “patent troll,” a slur used in the intellectual property world to describe small companies that hold patents but do not produce any products.
“DataTreasury is Exhibit A of what’s wrong in the system,” says Steve Bartlett, CEO of the Financial Services Roundtable, an association that represents the country’s 100 largest financial services firms. “The law is tilted so badly in favor of plaintiffs that have no products and yet extort billions of dollars.”
When the word “patent” is mentioned, people’s eyes generally glaze over. There’s nothing sexy about patents. Sorry, patent lawyer guys, but that’s the truth. But add the word “troll” after it, and it suddenly gets interesting. Of course, another name for “patent troll” is the owner of a patent that somebody else wants to use without having to pay for it.
“This is a desperate smear by a group of companies that have tried every other trick in the book and failed. Now what they are trying to do is assassinate the character of DataTreasury’s officers,” says company spokesman Eric Wetzel. “This special interest legislation is a clear example of large corporate infringers aggressively going after small companies.”
Unfortunately, it appears that smear tactics are working fairly well, judging from the reactions to this post. Since so many people know so little about patents, and the smear is so much more interesting than the facts, many people are doing what comes naturally, jumping to erroneous baseless conclusions because it’s just so much easier than knowing what you’re talking about.
On the flip side, people who are knowledgeable about patents, the law and the facts are coming out in overwhelming support of DataTreasury, trying their best to respond to those who prefer smear to facts and clarify this arcane area of the law.
The funny part about this campaign by the big banks to buy their way out of patent infringement with donations to Jeff Sessions’ campaign is that everybody will take sudden, but belated, interest in this fiasco when the bill comes due and has to be paid by the American taxpayer. But you don’t mind, do you? After all, I’m sure you want to show as much love to Citibank as Citibank shows to you.
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Another meaning of “patent troll” is “someone who spends hours or hundreds of hours of intellectual capital to develop an idea that is useful to commerce, tries to market that idea, but then gets hijacked by a company that calculates it would be easier to steal the idea than pay for it.”
I appreciate your perspective and agree that specific legislation targeted at Data Treasury is not the answer. I have served on patent committees for large corporations for over 6 years. My issue is with the US Patent Office and for the life of me I cannot understand why they granted the patent or why they have allowed it to stand. One of the major tests of patent viability is “novelty.” Where prior art exists, the novelty difference must be in the concept or the operation of the invention rather than its physical manifestation. The concept of remote collection and central processing of documents has been around within enterprises for years. In the health claim processing industry, claim forms have been scanned remotely and processed centrally since 1990.
The Data Treasury patent does not pass the “Unobviousness” test. This test states that an invention must not be one in which the differences or improvements to a process would not have been obvious to a person having “ordinary skill” in the area. Trust me, I have ordinary skill in the are and the Data Treasury process is very obvious to me. So obvious that over 100 companies and banks came up with the same concept. My argument is they did so because there is no other logical way to execute a process like that patented by Data Treasury.
All that said, these conditions and tests are open to interpretation and apparently there are strong arguments that have kept the patent office from dismissing the patent.
If the patent is ultimately upheld by the courts, I think the legislation will be passed.
I’m not equipped to question your assessment of the merit of the patent, but the place to challenge it is in the courts, not here. DataTreasury has thus far been completely successful in the courts, and numerous banks have already settled with it.
If the banks keep losing their challenges to the patent, then it would appear that your assessment is wrong. We can’t claim to respect the decision of the legal system only when we agree with it. Either we honor the decisions of the courts or we don’t.
And if DataTreasury continues to prevail in court, then what business does Congress have in passing an amendment for the sole purpose of taking DataTreasury’s property and giving it away to the banks, thus shifting the cost to the taxpayer to pay for the benefit of the banks as a public taking?
STEVE BARTLETT IS ALL WET!!
this is the industry that Sessions champions:
The innocent banks and their ilk:
From: Chief Executive (U.S.)5/1/2001 Author: PRINCE, C.J
It’s not every CEO who freely admits to swiping other people’s ideas–although, truth be told, the vast majority of successful chief executives have probably taken the liberty. But ask Richard Kovacevich, CEO OF WELLS FARGO, whether he prefers inventing ideas or stealing them and he’s quick with his response. “Oh, I’d much rather steal an idea,” the 57-year-old CEO says matter-of-factly. “Quite frankly, it’s much easier mentally. I have no pride about that.”
Following up on DB’s comments, it does seem like DataTreasury’s claim on the check imaging process is a clear case of failing to meet the “unobviousness” test — much like the controversy surrounding Amazon’s “one-click purchase” patent. With that in mind, you can hardly accuse the banking companies of “stealing” a concept when they began using imaging t to comply with the Check 21 legislation passed by Congress specifically in response to 9/11. DataTreasury – not the banks – is the party that seems most interested in capitalizing on the situation to make a profit; after all, it is unclear what else the company does besides pursue frivolous lawsuits. And while you are correct that the issue could eventually be settled within a courtroom, history has shown that Congress can, will and should intervene when the circumstances warrant.
Since the patents were developed by DataTreasury before the banks started using them and they knew that they violating the patents, there is no other way to describe what they were doing but stealing. I have to assume that your comment is just a deliberate effort to spread deceptive information and spin in favor of the banks. Are you being paid to do this? If not, you’re the only one.
And what history are you speaking of that has shown that when a corporate sector loses in the courts, they should buy Senators through campaign donations to save them from their theft?
Isn’t it ironic…don’t you think. Congress isn’t disputing the validity of these patents or the right of Datatreasury to collect royalties. The only thing that this legislation proposes doing is shifting the liability for paying those royalties away from the banks (who are making a fortune off of this valuable technology) to the taxpayer (who is already paying out the a-hole for these services at their local bank). The banks are using Congress to double dip the public!
Why yes, that’s exactly what I think. And for all the efforts of the apologists and paid provacateurs, it will end up the taxpayers who will compensate DataTreasury for the taking of its property, now estimated to be between $20-30 billion.
But shouldn’t our Senators love commercial banks enough to cover their bottom line? And shouldn’t we love our banks enough to foot the bill?
Call a spade a spade…The Banks are the ones who are stealing. They knowingly infringed on Datatreasury’s patents and have made very good money doing so. Now they want the tax payers to spend billions to pay for their illegal actions. Datatreasury had their cases either dismissed, or served some time and probation. Now it is the Banks turn to pay the price for the wrongs they did. Hopefully Congress will not let the banks steal, lie and buy their way out of this. The banks knew what they were doing and now they should have to pay, not us.
The banks are not smearing Data Treasury. Anyone who thinks Data Treasury is an innocent party in this matter is fooling themselves, plain and simple. Isn’t it obvious they (Data Treasury) are now turning their attention towards the banks where there’s an even greater windfall of money to get?
With regards to the Amendment…. the bill has bipartisan support. It seems like Congress will find a way to avoid shifting the burden on the taxpayers — I find it hard to believe that American taxpayers are going to come home to find a bill in their mailbox that needs to be paid directly to the banks. That seems about as plausible as Data Treasury’s claim that they “invented” a process to make a digital image of a check.
Well, Kathryn Kennedy, does it embarrass you at all to post the bank smear? Obviously, not.
The fact that banks are roaming the internet to pursue their campaign against DataTreasury makes clear how much money this is worth to them and how overwhelmingly they fear their liability. The banks are desperate, which is why the little people like KK here flagrantly smear others. What a pathetic showing.
Even if Keith DeLucia was a baf guy, which he is not , that does not give the right to Banks to steal . That is what you are insisting. You are a shill for the banks and have write what ever you are told with no brains and no back bone. The fact is the US Patent office reviewed these patents again and not only recertified them but also allowed an addition 124 points to be added , you do not know what you are talking about and have little knowledge of what a true patent is . People that are smart realize when they do not know and admit it and refrain from commenting . This is not the case for you , making you a dangerous ill advisded character.
They’re banking on getting away with it
By TOM GIOVANETTI
Special to the Star-Telegram
Property rights protect the little guy. It doesn’t matter how wealthy or politically connected you are — you have control and full legal standing with regard to your property. Because of your property rights, you can’t be run over and abused.
The same is true of intellectual property rights. There is something heroic, even romantic, about the small inventor who comes up with a breakthrough idea. The patent is his property right; his protection. It means that big companies can’t just steal his idea and kick him down the road. A just society is reinforced by property rights that protect the weak against the strong, and the small against the large.
At least, that’s how it’s supposed to work. But sometimes the powerful and politically connected see property rights as an annoyance. Unfortunately, that is happening on Capitol Hill, where a consortium of major banks that have repeatedly infringed a patent are asking Congress to give them immunity for their violations.
Worse, these banks also are asking Congress to make taxpayers pay the patent holder for their illegal actions. According to the Congressional Budget Office, the bailout would cost the federal government at least a billion dollars.
If granted, this would reward the banks for ignoring patent rights. It also would set a precedent by which wealthy, politically connected patent infringers could go to Congress and ask for similar immunities and taxpayer bailouts. Such a precedent would undermine the U.S. patent system and American innovation.
Unfortunately, the banks have managed to persuade a number of senators to support this harmful legislation.
The story starts more than a decade ago, when the founder of a small Plano company called DataTreasury Corp. invented a system for digitally scanning and sending images of checks. The inventor received patents for it in 1999 and 2000.
DataTreasury Corp. tried to sell its technology to the banks, but instead of buying or licensing the technology, several big banks expropriated it and began using it to change the way they processed checks.
The value of that technology grew exponentially in 2003, when Congress legalized the digital processing of check transactions. Instead of physically returning cancelled checks to their signers, banks could perform the whole process electronically.
DataTreasury’s technology created a windfall for the banks. According to the industry’s own experts, the banks save between $2 billion and $6 billion annually because of the switch to digital processing.
Of course, that switch would not have been possible without DataTreasury’s technology, which was covered by patents that the banks callously ignored. Understandably, the company has sued for damages.
The banks initially responded by trying to get the patents invalidated with some legal jujitsu. But the U.S. Patent and Trademark Office upheld the validity of DataTreasury’s patents in their entirety. So rather than face a jury, where they obviously feared losing, the banks decided to call on their friends in Congress for legal protection.
The politicians who have pushed to grant banks immunity from their patent violations should reconsider. The U.S. Commerce Department has objected to this legislative provision, which was added onto the pending Patent Reform Act. Such a law would pave the way for Congress to start interfering in legal cases on behalf of the highest bidder.
The Commerce Department — the parent agency of the Patent and Trademark Office — also pointed out that “limiting patent holders’ rights and remedies in this instance could reduce innovation in this technology area.”
In other words, revoking someone’s property rights affects not only the disenfranchised property holder but also the next round of inventors. In this instance, moreover, Congress is sending the bill for the bailout to us — the taxpayers.
All this makes for quite a lobbying coup. The banking industry makes off with a few extra billion dollars, robs a small business of its intellectual property and sticks taxpayers with the tab.
Legislation should not be used to grant retroactive legal immunity to large corporations that willfully ignored the property rights of a small, innovative company. And no elected official who has pledged to maintain the integrity of our legal system should be a party to such a travesty.
The windfall is not 2-6 billion of savings to the bank , but at 40 billion checks per year for the major institutions at 1 to $2 per check the savings is 40 to 80 billion dollars . Ofcourse Datatreasury is suing for 5 cents per check and settling for even less . The industry used to clain that it cost close to $2 per check so what justifies the banks STEALING this for FREE , except why pay if you are not forced to.
It isn’t very fair, or civil, to call someone a “shill” for the banking industry, Fred. KK brings up some good points. The amendment has unanimous bi-partisan support in the Senate Judiciary Committee (which isn’t something to be take lightly given today’s bare knuckle politics). Further, banks aren’t stealing, they are simply following the legal mandate of Check 21. Finally, like KK said, the idea of taking an image of a check is nothing knew and as far as I know, the patent office is still reviewing the “business method” portion of the patent.
It would be decidedly unfair, but for the fact that KKs post is sheer and utter nonsense, as is yours. Take whatever money the banks are paying you to spout this crap and go ply your trade elsewhere.
If anything is unfair on this page, it is this op ed. It is one of the more general and incorrect pieces I have seen lately that somehow got published in anything resembling a major publication.
This casts Data Treasury as the poor little guy fending off the banks. Giovanetti would have us think the underdog company is using only its guile and courage to repeatedly dodge the behemoth’s blows. My guess is Data Treasury’s weapon of choice more closely resembles the firearm one of its owners used to try and REALLY TRULY ROB A REAL BANK in the 90s. It is absurd to characterize a company as the underdog which is half owned by a felon and engaged in the dishonest business of ripping off the public.
Digiovanni misses the point completely of the amendment. It is not intended to give a windfall to the banks (though it is so easy to throw special interest charges at Congress). It is meant to give a windfall to the public, to Congress constituents. It will make for a safer financial industry and a more efficient one. It would be a complete disgrace to see a two-man heist damage the entire financial industry, and Congress not step in. Anyone who says otherwise either has stock in DT, or doesn’t know what they’re talking about.
Claudio Ballard is an inventor who patented a patentable process because he had a vision of a paperless world. This patent is property he owns not the banking industry . Period. He showed it to Chase and Chase stole it and set up a company called Viewpoint. A safer financial industry does can not be created by stealing. His patents after shown made the industry more effecient , Datatreasury is entitled to
charge the banking industry according to the laws of this land and what makes the USA a great country. You are saying lets rob this man , his company and the share holders of what is due them .
So shifting the burden of $20 billion due the patent owner from the Big Banks to the taxpayers is a some huge gift from our wonerful, friendly, loving banks? You shills are just too funny.
You guys really need to go back to the war room and come up with a better pitch. This one is just pathetic.
By the way, why is it all the paid bank shills use these names with first initials and “gmail” email addresses? Not one with the guts to use a real name or identify which bank you work for?
What makes the USA a great country is its economy and political process is not held hostage by dishonest self-interested corrupt individuals. I agree completely that the laws of this land are the most important issue at hand–this is why I support the amendment. The laws must change so the banks are not held captive by a criminal like Ballard. His lawsuits are making the industry less efficient, and hampering Congress’ efforts to make our nation more secure. If you’re really going to pretend your self-interested post has anything to do with Patriotism, perhaps you should remember that a committee in the Congress of the United States unanimously supported the amendment (Bipartisan, obviously) because they feel it will make our nation more secure. It is embarrasing that anyone in this great country would be worried more about Ballard and his cronies getting paid than making our nation more secure.
Seriously, how much do they pay you to spread this crap?
If the price is right, maybe I’ll go to work for the Roundtable spreading crap too. Is it a salary thing, or do they pay you per post?
Has anyone else noticed that DataTreasury is only suing the large banks? I looked it up in their original suit, and they’ve got really big banks by the balls, and have completely ignored the ones that don’t have as much capital. If that doesn’t suggest that they’re taking banks for a ride, I don’t know what does.
Your logic is a little backward. They sue the big banks to establish their rights, and the small banks settle because if the big banks lose (as they have), then there’s no need to spend on litigation.
Nice try, though. Much better than the bank shills with their “gmail” addresses, just like yours. Except how come yours is “lydia at gmail,” and yet you sign this as Benjy? Do you have some transgender thing going on? Don’t any of the bank shills have the balls to use their real name and email? Are you embarrassed by being shills? Come on, Benjy/Lydia, tell us how much they are paying for your services?
As I’m still getting comments from the shills, who are still using bogus emails and still trying to pass off the same tired garbage, I’m shutting down the comments on this post.
A few things have become evident: The banks are desperate to stop DataTreasury by subterfuge since they will crash and burn in the courts; They are willing to do anything or say anything to stop DataTreasury; This is an absolute disgrace.
And to my friendly bank shills, if you want to write more, do it at your own blog. I’m sure people will flock to read whatever you have to say.
FYI: I have received a flurry of comments since closing down this post from our shills. Just so we’re clear, there would be good reasons for people to discuss the patent reform act, or patent trolls, or any number of issues that challenge the basic premise of my post. However, there is absolutely no reason, save for being a shill, that anyone would perpetuate the effort to smear the personnel at DataTreasury, lie about the facts and use the bank spin, except for being a shill. There is no question, therefore, that these are shills. There is similarly no question that the banking industry is and will continue to do whatever it can to save itself billions of dollars, and it comes as no surprise that this has turned into a public relations campaign against DataTreasury.
Let me be clear: The comments to this post were shut down because I have no doubt whatsoever that these were shills.