Congress returns from its Easter recess this week with the Senate still yet to take up the Patent Reform Act.
But a spokesman for Senate Majority Leader Harry Reid, D-Nev., said Friday the bill is on the agenda for the forthcoming work period.
The bill, which the House passed last year, has been pending for months while supporters attempt to resolve differences between interested parties.
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As a small inventor I might concur that our patent system is in need of some reform, but I am very concerned that the bill in its present form picks winners and losers among industries with different business models in a way that has never before been attempted in patent law or practice.
Sen. Jeff Sessions (R-Ala.) has sponsored an unusual provision at the urging of the nation's banks granting them immunity against an active patent lawsuit, potentially saving them billions of dollars. The amendment would prevent a small Texas company called DataTreasury from collecting damages from banks for infringing on its patented method for digitally scanning, sending and archiving checks. The provision introduced by Sessions did not name DataTreasury but was carefully tailored to apply to that company and its "check collection" system. The patents were upheld last summer by the U.S. Patent and Trademark Office after they were thoroughly challenged.
Justification of the Sessions Amendment seems to be that the Check 21 Act forced the banks to adopt new check processing procedures with the innocent banks (who were merely complying with government regulation) thereby finding themselves opportunistically and indiscriminately sued for infringement by a“patent troll.” This view, however, fails to recognize that:
1). The (Data Treasury) patents in question were filed years before the Check 21 Act. That DT approached the Banks as early as 1999 to offer his technology to them and was rebuffed by the banks.
The Data Treasury patents have withstood the best legal challenges the banks could buy, and that some of the more responsible banks have admitted the validity of the patents by licensing them. And every entity that has been sued almost surely had opportunity to negotiate a license before being sued.
2). The Check 21 Act legalized “Check Imaging” and does not force Banks to comply with its usage. Banks remain free to process checks the old way or themselves invent a non-infringing new way or license use of the Data Treasury roadmap for a modest portion of the savings it offers. Nothing in the Check 21 Act requires banks infringe the Data Treasury patents.
3). Check 21 made it possible for the banks to dramatically reduce check clearance costs, relative to then current processes. Check 21 was opportunity, not burden!!
4). Immunity would be secured through government compensation to DataTreasury, which would in effect force taxpayers to finance the cost of patent infringement on behalf of banks, to the tune of approximately $1 billion +, according to the Congressional Budget Office. Scarcely any plausible justification has been given.
Any idea that the Sessions Amendment is justified as "relief" is simply preposterous. It is no more or less than the financial lobby buying a "Get out of Jail Free" card from congress and appears to be far less like meaningful reform and much more like a license for infringers to steal.
Overall, this bill with this Amendment is a great disservice to the small technology companies and independent inventors that drive American innovation. Reforms are needed. But this Bill, with or without Sessions, should go back to committee in a Congress with a purer heart.
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."
Ok, let's call a spade a spade here. To the person who posted the comment above -- I have been following this issue and reading about it in the blogosphere. You keep posting the same response -- whether it's relevant to the discussion at hand or not.
There are real questions about the validity of these Data Treasury patents. If the patent system is being abused don't you think Congress should intervene? And I'd like to point out something in your post that is glaringly obvious: this Data Treasury seems to be more interested in profit over national security.
And, you're being awfully hyperbolic in saying that immunity for the banks would mean the U.S. taxpayers would have to foot the bill. That's nonsense if you think any Senator is going to tie his name to legislation that would make the taxpayers pay over $1 billion for the so-called "patent infringement" costs.
It's called re-election. They typically like to hold onto their seats.
The functions of 1) Remote Check (Draft, Giro, Remittance or any other finacial document)Image Capture, 2) Image Storage, 3) Image Character Recognition, 4) Image Key Data Entry, 5) Image Data Transmission, 6) Central Image Archive, 7) Image Statement Rendering were all implemented on a very large commercial scale in 1986. All the functions of the Data Treasury Patent ran in production at multiple sites in a large Unix TCP/IP Network Environment for over 15 years before the Data Treasury Patent was issued. And many engineeers including ones from IBM, Xerox, Banctec, and Unisys saw these systems and could easily have re-produced them in the interveneing 15 years. It is hard to uderstand what all this fuss is about.
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