Infamous Check Scanning Patents, That Senators Tried To Bury, Wins First Lawsuit
from the scan-this dept
That said, it doesn't mean that the patents in question was a particularly good patent. In fact, there's a good argument that the patent is exceptionally broad, way beyond a reasonable level, and was the natural progression of where things were headed. Others have pointed out that, depending on what the Supreme Court rules in the Bilski case, this patent might soon get tossed under the new rules anyway. In the meantime, though, it hasn't stopped DataTreasury from collecting $350 million from banks it has threatened, and, as Joe Mullin points out, the company has also won its first patent lawsuit, against US Bank, who will now have to pay somewhere between $27 million and $90 million (depending on how "willful" the infringement is considered). The decision came out of an East Texas jury, so perhaps it's not surprising.
Mullin's article highlights how questionable a patent this is:
Steve Bartlett, CEO of the bank lobbying group Financial Services Roundtable, says DataTreasury's suit against U.S. Bancorp is a prime example of why business method patents need to be reined in. The patents don't amount to an invention, Bartlett says, just a description of a common business practice--processing checks--that has changed over time, as have answering the phone and opening mail. To Bartlett, that such a patent can be used to extract large sums from banks shows how far the patent system has spun out of control.Furthermore, as the lawyers pointed out at the trial, there appears to be tremendous prior art on the patents in question -- and the only way the company was able to secure the patents after they were initially rejected was to add a bit of encryption to it. Under the KSR test, it seems like that alone should invalidate the patents. Taking two known things -- check scanning and encryption -- and combining them shouldn't be patentable. But that's not how the patent system works, unfortunately. US Bank is planning to appeal, and the Supreme Court could help out quite a bit with a smart Bilski ruling (though that may be too much to hope for).
"This particular case involves check processing, which every bank in the nation has been doing for 200 years," says Bartlett. "And yet [DataTreasury] somehow got a patent on it."