Tim Lee

DataTreasury’s “Property Rights”

Here is one of the two patents that the nation’s major banks have been “stealing” from DataTreasury. The first claim is as follows:

A system for central management, storage and report generation of remotely captured paper transactions from documents and receipts comprising: one or more remote data access subsystems for capturing and sending paper transaction data and subsystem identification information comprising at least one imaging subsystem for capturing the documents and receipts and at least one data access controller for managing the capturing and sending of the transaction data; at least one central data processing subsystem for processing, sending, verifying and storing the paper transaction data and the subsystem identification information comprising a management subsystem for managing the processing, sending and storing of the of the transaction data; and at least one communication network for the transmission of the transaction data within and between said one or more data access subsystems and said at least one data processing subsystem, with the data access subsystem providing encrypted subsystem identification information and encrypted paper transaction data to the data processing subsystem.

As near as I can tell, this patent covers the concept of scanning and security transmitting paper documents. If you build a system for scanning and securely transmitting images of paper documents, you’re probably infringing on this patent. Or to put it a different way, this patent would, if strictly enforced give DataTreasury a 20-year monopoly on the concept of electronic check clearing.

It’s absurd that our legal system allows companies to engage in this kind of rent-seeking. It’s even more absurd that people invoke the concept of property rights to justify it. Property rights do not and should not give companies monopolies over entire industries.

March 31, 2008 | Comments |

Viewing 8 Comments

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    does that mean, that if Bayer has a new medizin for cancer, everybody can produce and sell it without paying royalties ?
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    Edgard, to improve your metaphor, the current software patents landscape is more akin to Bayer creating a cancer curing-drug and instead of getting a patent on their specific formula, they get a patent covering the general ability to cure cancer. Meaning anyone else who creates a different drug to do the same thing would be infringing.
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    Enabling and promoting innovation. That seems to be the number one answer on the campaign trail to solving problems with global warming issues and our troubled economy. As the candidates are out there pounding the pavement touting American innovation and how it holds the answers to our problems of rising food and fuel costs, the Congress is busy behind closed doors legislating away the very incentives that make inventing something viable and profitable to the inventor. If actions speak louder than words, as I believe they do, then what kind of message are we sending to our future innovators. Spend your time, your money and your investors money to fund and invent something valuable and then have your property rights legislated away so someone else who is more well funded and politically connected so that they can profit from it. I find it very interesting how everybody else is so generous with other peoples money. “Charity begins at home”. What happened to Democracy...and in an election year!
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    Nick- Are you seriously trying to sugest that DataTreasury should really be used as a poster child for innovation? As Mr. Lee points out, it is somewhat of a stretch to state the company has actual property rights that entitle them to license a process as mundane and general as scanning documents. Were they trying to protect an different "invention" that was less obvious, their arguments - and yours - would have much more credibility.
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    Datatreasury did everything by the book. In hindsight everything is obvious, but 10 plus years ago when it was conceived it was not. Datatreasury's patents describe a process that is much more intricate than many of it's critics describe or even understand for that fact. It is for these reasons that the patents in question have already withstood the most vigorous attempts to invalidate them. The amendment, by the way isn't even 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 to the American taxpayer. The Congressional Budget office went as far as posting a cost estimate for such takings(albeit grossly under valued, even by the CBO's own formula): http://datatreasury.com/pdf/CBO%20Scoring%20-%2...
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    Scanning documents may seem general and mundane to you because it is applied everyday. But you wouldn't have been able to create a biometric system to securely and electronically transfer these images on the best day of your life. Everything seems simple and obvious after the fact. Think about putting wheels on luggage, you tell me thats not general. The bottom line is that Datatreasury is right and has licensed with companies other then banks that agree they were the first to patent this system.
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    Subject: Senator Jeff Sessions, honesty and justice and integrity.
    An amendment to the Patent Reform Bill, sponsored by Senator Jeff Sessions, has been withdrawn by the Senator himself. The amendment, received approval from the entire Senate Judiciary Committee. It had the backing of (The Coalition for Patent Fairness) - (fairness by definition - freedom from dishonesty and injustice). The coalition, a group of one hundred and fifty high-tech companies, was, backed by (The Financial Round Table.) The Financial Round Table, represents the countries one hundred largest banks. These banks, now have a serious financial problem. (*They are presently involved in a patent infringement lawsuit*). A finding of willful infringement, will subject the banks to treble damages. (Three times the amount, that a jury would award, as per existing patent legislation.) The potential cost to the banks,? Billions of dollars!If passed, the amendment would also shift a one billion dollar expense, from the banks, to the American tax payer., By Senator Sessions own admission, "I don’t know how (the provision) can be modified to pass a constitutional muster. This Senator was attempting to add, an unconstitutional amendment, to the Patent Reform Bill. I question his motivation. I assure you, It had nothing to do with honesty, justice or a burning desire to perform his civic duty. The Senator stated," I think this has more to do with lobbyists, than it has to do with merit". ( Lets call a spade a spade). This action had to do with lobbyists, buying politicians! It had to do with, personal gain! It had to do with a lack of integrity!( It had nothing at all to do with merit)!
    (*The case, Data Treasury VS. Wells Fargo, and numerous other banks, was filed on Feb 24,2006 and is still in progress.*)
    In the interest of honesty and justice ,let this issue be resolve in court! ( There is no room in this equation,for banks attempting to buy an unconstitutional amendment,)
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    After Thomas Edison invented the light bulb it bacame obvious also. We have a separate part of the government called the US Commerce Department that posses the US Patent Department . The US Patent Department has just received praise from all the other countries on how good it is, and Tim Lee sponsors his opinion . The Datatreasury Patents have with stood the toughest test of challenge , since everybody knew what was at stake. Infact the U S Patent Department accepted an additional 127 claims to those patents. Those are the facts and the banks are not victims as they profited by using this technology that they STOLE. Those are the facts , don't kid yourself. PNC just settled and so should the others.

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