Schumer: Strike Affirmed Patents That Cost Banks $400m

Senator Seeks Free IP Pass for Banks -

Senator Charles Schumer, D-NY, a staunch supporter of financial institutions in his home state, is seeking a double standard for patent rights that have been both granted and re-examined.

He is helping banks try to reverse a patent ruling that has required them to pay $400 million in legal settlements and license fees to a small Texas company, Data Treasury Corp.

A provision inserted by Schumer into the long-awaited “American Invents Act” (H.R. 1249), which according to sources is will come before the House starting on Wednesday, June 22 at noon EST, appears to have only one aim: Strip DataTreasury Corp., of Plano, Texas, of a patent for processing digital checks that has made the company wealthy at banks’ expense. At least two House members are said to want the provision removed.

In November 2005, First Data Corporation filed a request for a reexamination of the DataTreasury Ballard patents citing numerous earlier publications that it felt either anticipated the DataTreasury inventions or made them obvious. In 2007, the USPTO not only upheld both patents but further allowed DataTreasury to claim additional inventions that were disclosed but not claimed in the original applications.

Reported the The New York Times:

“[Inventor Claudio Ballard] bristles at the characterization of DataTreasury as a company that merely exploits dubious patents.

“It is true that the company now is just a holding company for the patents with only a few employees. At one time it had more than 100 — before the banks stole his patented technology, he said.

“‘I didn’t invent the scanner; I didn’t invent networking, or computers or software,” he said. “But I am an expert at systems integration, and I created this complete end-to-end solution” for digital check processing.'”

More than three dozen banks and financial institutions have settled with or signed license agreements with DataTreasury to use its inventions, including Bank of NY Mellon, Bank One, Citibank, Diebold, First Data, JP Morgan Chase, Mellon Bank, Merrill Lynch, NCR and PNC Financial Services.

Read more on Newsmax.com: Schumer Sides With Banks Against Patent Holder.

*     *     *

What is Schumer thinking? The courts via Bilski have already spoken on business method patents. Besides, financial institutions and their local Senator should be careful what they wish for.

The House of Representatives should not permit valid, licensed and reexamined patents to be held to a separate, higher standard so that a select group of infringers can avoid paying licensing fees. If it does, expect fewer investors to risk their capital on innovative businesses and new technologies.

Illustration source: bastiatinstitute.org

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House Republicans Reach Accord on Bill

*     *     *

A note from Hal Wegner via the Internet Patent News Service:

“A tentative deal has apparently been reached amongst House Republican leadership factions on the America Invents Act that makes it “likely” that it will start to be considered in the House floor this Wednesday:

Thus, the House GOP leadership has announced a schedule for next week which includes the following: ‘On Wednesday, June 22, 2011 the House will meet at 12:00 p.m. for legislative business… and likely begin consideration of H.R. 2021 1249 – America Invents Act.'”

About Bruce Berman

IP trend spotter, consultant and editor.

4 Responses to “Schumer: Strike Affirmed Patents That Cost Banks $400m”

  1. Concerned Patriot Reply June 21, 2011 at 7:51 pm

    I feel like I live in 1984 when our Congress passes an “American Invents” act that screws the inventors.

  2. Giving the large banks a free pass to infringe on patents already granted by the USPO and defended successfully in Federal courts is not only the height of hypocrisy it is a mark of shame on legislators for sale. I’d always admired Senator Schumer as a man of integrity, but he turns out to be just another guy who’s vote is available for campaign contributions. Very depressing.

  3. “a staunch supporter of financial institutions”

    Thomas Jefferson warned us about the banks.

    Even the leading patent expert in China has stated the bill will help them steal our inventions. Who are the supporters of this bill working for??

    The bill is improperly named. It should be titled the “America Kills Inventors Act”.

    Just because they call it “reform” doesn’t mean it is. Patent reform is a fraud on America. This bill will not do what they claim it will. What it will do is help large multinational corporations maintain their monopolies by robbing and killing their small entity and startup competitors (so it will do exactly what the large multinationals paid for) and with them the jobs they would have created. Yet small entities create the lion’s share of new jobs. According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, “startups aren’t everything when it comes to job growth. They’re the only thing.” This bill is a wholesale slaughter of US jobs. Those wishing to help in the fight to defeat this bill should contact us as below.

    Small entities and inventors have been given far too little voice on this bill when one considers that they rely far more heavily on the patent system than do large firms who can control their markets by their size alone. The smaller the firm, the more they rely on patents -especially startups and individual inventors.

    Please see http://truereform.piausa.org/ for a different/opposing view on patent reform.
    http://docs.piausa.org/

Trackbacks/Pingbacks

  1. Battle Between Tessera and Activist IP Investor is Heating Up | IP CloseUp - May 9, 2013

    […] designed to crackdown on a growing problem. (Schumer led the effort to prevent patents held by Data Treasury that read on financial institutions from being […]

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