Digital Transactions Authoritative, insightful and timely information for payments professionals
DataTreasury Corp. has scored another victory in its ongoing litigation against major banks, networks, and vendors over alleged infringement of DataTreasury patents covering processes involved in check-image exchange, and now says it is preparing to fight cases it has filed against nine other outstanding defendants. With the decision by France's Groupe Ingenico, a worldwide maker of point-of-sale devices, to settle with DataTreasury, the small, Melville, N.Y.-based technology company has now obtained settlements with half a dozen organizations. The largest of these, JPMorgan Chase & Co., sent shockwaves through the payments world this summer when the banking giant admitted it infringed DataTreasury's patents and recognized the patents' validity and enforceability (Digital Transactions News, July 6). In a consent judgment entered last week in U.S. District Court for the Eastern District of Texas, Ingenico also recognizes the validity and enforceability of the patents, but does not admit infringing them. And, like JPMorgan Chase, it agrees to license the company's software under undisclosed terms. Targeted in the litigation were devices Ingenico makes that scan checks and capture electronic versions of signatures. Two other defendants, Tasq Technology Inc. and Retriever Payment Systems Inc., joined in the settlement but are not involved in the license deal, according to DataTreasury's counsel. The settlement has further emboldened DataTreasury to fights its claims against the remaining defendants, which include transaction-processing kingpin First Data Corp. as well as image-exchange networks SVPCO and Viewpointe Archive Services LLC and banking giants Citigroup Inc. Bank of America Corp., Wachovia Co., and Wells Fargo Co. “We will not back down,” says Ed Hohn, a partner at Nix, Patterson & Roach LLP and lead counsel for DataTreasury. Hohn estimates defendants so far have spent $50 million in efforts to invalidate DataTreasury's patents, but “we've beaten [them] every step of the way,” he says. Larry S. Nixon, a partner at Arlington, Va.-based Nixon & Vanderhye P.C. who represented Ingenico, refused to comment on the case. The case against FDC is scheduled for trial next July, while cases against SVPCO, Viewpointe, and MagTek Inc., another terminal maker, go to trial in October. A case against NCR Corp. is currently set for March 2007. Trial dates for the actions against the banks have not yet been determined. Founded in 1998, DataTreasury in 1999 and 2000 received two patents (numbers 5,910,988 and 6,032,137) covering document imaging, centralized processing, and electronic storage?the underpinnings of what the company calls its global repository platform. With the passage in 2003 of the Check Clearing for the 21st Century Act (Check 21), which encourages banks to swap electronic images of checks, the financial industry's interest in check imaging and image-exchange networks took off, and at least four national networks have begun operation in the past year. With paper check volumes declining, banks see image exchange and the remote deposit capture capability it makes possible as a means to cut costs on check processing and boost revenues on corporate treasury services. At the same time, DataTreasury in 2002 began filing a series of patent-infringement suits against vendors and financial institutions it saw as trying to cash in on Check 21 using technology it owned.
