DataTreasury
Encyclopedia
DataTreasury, located in Plano, Texas
, United States
, develops, acquires and licenses technology for secure check
image capture and storage. The company has a patent portfolio relating to these technologies which it is has been enforcing since 2002 through several patent infringement lawsuits directed at numerous banks it alleges are infringing the patents. Several banks have settled.
Claudio Ballard founded DataTreasury in 1998 to market technology that processes electronic checks and other documents and related payment-processing tools utilizing patents prosecuted and filed prior to DataTreasury's founding, and then assigned to it by Ballard's holding company, CSP Holdings LLC..
The company now has about 1000 shareholders and has generated over $350 mm in licensing revenue in the past four years. Ballard is now only a small percentage shareholder and the company has only two employees.
In 2006, DataTreasury sued dozens of financial institutions, many of which have settled with the company.
On March 26, 2010, a jury provided DataTreasury Corp.'s first courtroom victory over U.S. Bancorp. The jury found that U.S. Bancorp had infringed on DataTreasury patents.
In April of 2011, Ted Doukas sued Data Treasury claiming that he was a financial backer of Claudio Ballard when Ballard was working on the image capture technology and was therefore entitled to one half of the proceeds from the invention. The total amount sought is $15 billion.
The secure check imaging technology claimed by the DataTreasury patents was invented by Claudio Ballard in July 1994. He got his idea when he would meet regularly with his father at a local pizza
diner
after his mother died. When he saw the shoe box
es full of receipts that the restaurant kept for records, he realized that, if he could develop a secure method of image storage and replace the shoe boxes, it would be a tremendous help to these small businesses.
Claudio built the original working prototype
in 1995 at his own expense while he was unemployed. He filed his first patent application
in August 1997 after receiving angel investment
funding from an acquaintance, Peter Lupoli, who was impressed with the prototype's capabilities.Patents were issued in 1999 and 2000 respectively and, in 2002, DataTreasury license
d their first imaging system, eImageVault, to Bank Hapoalim
of Israel
.
DataTreasury has had as many as 100 employees. In 2004, the New York Times characterized DataTreasury as "a company whose only business, other than one client, appears to be suing other companies."
s and other companies for infringing
the Ballard patent
s.
Some financial institutions, including JPMorgan Chase and Merrill Lynch, settled the suits, while suits against 56 other financial institutions are continuing. These suits were put on hold pending the outcome of a reexamination
of the patents, but after the USPTO confirmed the validity of the patents, the cases are now moving forward.
Simultaneously with the suits, the United States Senate
version of the Patent Reform Act of 2007
(S. 1145) moved forward with an amendment to Section 14 of the Act, supported by a number of financial services companies, which would prevent DataTreasury from collecting damages on the patents. However, the Congressional Budget Office
(CBO) predicted that if such a provision were passed, owners of check-processing patents (such as DataTreasury) would sue the federal government, arguing that their property had been unlawfully seized. The value of this lawsuit could reach $1 billion, this being the CBO's estimate for royalties to which the companies might otherwise be entitled.
At the heart of the dispute is image-capture and sharing technology managing hundreds of billions of paper checks written each year.
In 2003, the U.S. Congress passed the Check Clearing for the 21st Century Act, known as "Check 21". The act allows banks to take digital images of checks, exchange those images with other banks, and destroy the original paper copies. This process generated an estimated $2 billion to $4 billion in annual savings by eliminating the expense of shipping hundreds of billions of paper checks around the country, according to a DataTreasury source.
DataTreasury, founded in 1998, received two patents covering its check-imaging technology in 1999 and 2000. According to the company Web site, DataTreasury began discussing a check-imaging joint venture with officials from Chase Manhattan Bank (now known as JPMorgan Chase), but the bank launched a separate check image processing venture called Viewpointe Archive Services LLC with IBM Corporation and another bank. DataTreasury filed the first in a series of lawsuits against dozens of banks in 2002. U.S. Bank was one of several banks to invest in Viewpointe, which is also a party to the litigation set for trial next week. JP Morgan settled with DataTreasury in 2005.
Banks have alleged that DataTreasury bought up patents for the system that underlies electronic transfers and is trying to shake down companies for licensing fees, saying that DataTreasury's patents are "an example of what's wrong with patent law." Others have characterized the company as a patent troll
. DataTreasury has stated that Ballard is the inventor of the system and built the company to sell it before the banks stole the idea.
. These patents were , , , and . On February 24, 2006, DataTreasury filed a complaint in the United States District Court for the Eastern District of Texas
accusing over 30 banks and other companies of infringing the patents. These cases are still pending.
s with DataTreasury and/or taken a license
.
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 upheld both patents and further allowed DataTreasury to claim additional inventions that were disclosed but not claimed in the original applications.
Plano, Texas
Plano is a city in the state of Texas, located mostly within Collin County. The city's population was 259,841 at the 2010 census, making it the ninth-largest city in Texas and the 71st most populous city in the United States. Plano is located within the metropolitan area commonly referred to as...
, United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, develops, acquires and licenses technology for secure check
Cheque
A cheque is a document/instrument See the negotiable cow—itself a fictional story—for discussions of cheques written on unusual surfaces. that orders a payment of money from a bank account...
image capture and storage. The company has a patent portfolio relating to these technologies which it is has been enforcing since 2002 through several patent infringement lawsuits directed at numerous banks it alleges are infringing the patents. Several banks have settled.
Claudio Ballard founded DataTreasury in 1998 to market technology that processes electronic checks and other documents and related payment-processing tools utilizing patents prosecuted and filed prior to DataTreasury's founding, and then assigned to it by Ballard's holding company, CSP Holdings LLC..
The company now has about 1000 shareholders and has generated over $350 mm in licensing revenue in the past four years. Ballard is now only a small percentage shareholder and the company has only two employees.
In 2006, DataTreasury sued dozens of financial institutions, many of which have settled with the company.
On March 26, 2010, a jury provided DataTreasury Corp.'s first courtroom victory over U.S. Bancorp. The jury found that U.S. Bancorp had infringed on DataTreasury patents.
In April of 2011, Ted Doukas sued Data Treasury claiming that he was a financial backer of Claudio Ballard when Ballard was working on the image capture technology and was therefore entitled to one half of the proceeds from the invention. The total amount sought is $15 billion.
Invention of secure check imaging technology
Pizza
Pizza is an oven-baked, flat, disc-shaped bread typically topped with a tomato sauce, cheese and various toppings.Originating in Italy, from the Neapolitan cuisine, the dish has become popular in many parts of the world. An establishment that makes and sells pizzas is called a "pizzeria"...
diner
Diner
A diner, also spelled dinor in western Pennsylvania is a prefabricated restaurant building characteristic of North America, especially in the Midwest, in New York City, in Pennsylvania and in New Jersey, and in other areas of the Northeastern United States, although examples can be found throughout...
after his mother died. When he saw the shoe box
Shoe Box
"Shoe Box" is a song by Canadian band Barenaked Ladies, released as a single from their 1995 album, Born on a Pirate Ship. It is notable for being featured on the first soundtrack to the television series Friends, as well as the last track on the band's Born on a Pirate Ship album...
es full of receipts that the restaurant kept for records, he realized that, if he could develop a secure method of image storage and replace the shoe boxes, it would be a tremendous help to these small businesses.
Claudio built the original working prototype
Prototype
A prototype is an early sample or model built to test a concept or process or to act as a thing to be replicated or learned from.The word prototype derives from the Greek πρωτότυπον , "primitive form", neutral of πρωτότυπος , "original, primitive", from πρῶτος , "first" and τύπος ,...
in 1995 at his own expense while he was unemployed. He filed his first patent application
Patent application
A patent application is a request pending at a patent office for the grant of a patent for the invention described and claimed by that application. An application consists of a description of the invention , together with official forms and correspondence relating to the application...
in August 1997 after receiving angel investment
Angel investor
An angel investor or angel is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity...
funding from an acquaintance, Peter Lupoli, who was impressed with the prototype's capabilities.Patents were issued in 1999 and 2000 respectively and, in 2002, DataTreasury license
License
The verb license or grant licence means to give permission. The noun license or licence refers to that permission as well as to the document recording that permission.A license may be granted by a party to another party as an element of an agreement...
d their first imaging system, eImageVault, to Bank Hapoalim
Bank Hapoalim
Bank Hapoalim is Israel’s largest bank. As of 31 December 2008 it had total consolidated assets of NIS 306.85 billion. The Bank has a significant presence in global financial markets. In Israel, the Group has over 260 full-service branches, eight regional business centers, and industry desks...
of Israel
Israel
The State of Israel is a parliamentary republic located in the Middle East, along the eastern shore of the Mediterranean Sea...
.
Company foundation
Claudio Ballard founded DataTreasury in 1998 in Melville, NY.DataTreasury has had as many as 100 employees. In 2004, the New York Times characterized DataTreasury as "a company whose only business, other than one client, appears to be suing other companies."
Ballard patents
In 2002, DataTreasury sued a number of bankBank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
s and other companies for infringing
Patent infringement
Patent infringement is the commission of a prohibited act with respect to a patented invention without permission from the patent holder. Permission may typically be granted in the form of a license. The definition of patent infringement may vary by jurisdiction, but it typically includes using or...
the Ballard patent
Patent
A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....
s.
Some financial institutions, including JPMorgan Chase and Merrill Lynch, settled the suits, while suits against 56 other financial institutions are continuing. These suits were put on hold pending the outcome of a reexamination
Reexamination
In United States patent law, a reexamination is a process whereby a third party or inventor can have a patent reexamined by a patent examiner to verify that the subject matter it claims is patentable...
of the patents, but after the USPTO confirmed the validity of the patents, the cases are now moving forward.
Simultaneously with the suits, the United States Senate
United States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
version of the Patent Reform Act of 2007
Patent Reform Act of 2007
The Patent Reform Act of 2007 is a proposal introduced in the 110th United States Congress for changes in United States patent law. Democratic Congressman Howard Berman introduced the House of Representatives bill on April 18, 2007. Democratic Party Senator Patrick Leahy introduced the Senate bill...
(S. 1145) moved forward with an amendment to Section 14 of the Act, supported by a number of financial services companies, which would prevent DataTreasury from collecting damages on the patents. However, the Congressional Budget Office
Congressional Budget Office
The Congressional Budget Office is a federal agency within the legislative branch of the United States government that provides economic data to Congress....
(CBO) predicted that if such a provision were passed, owners of check-processing patents (such as DataTreasury) would sue the federal government, arguing that their property had been unlawfully seized. The value of this lawsuit could reach $1 billion, this being the CBO's estimate for royalties to which the companies might otherwise be entitled.
At the heart of the dispute is image-capture and sharing technology managing hundreds of billions of paper checks written each year.
In 2003, the U.S. Congress passed the Check Clearing for the 21st Century Act, known as "Check 21". The act allows banks to take digital images of checks, exchange those images with other banks, and destroy the original paper copies. This process generated an estimated $2 billion to $4 billion in annual savings by eliminating the expense of shipping hundreds of billions of paper checks around the country, according to a DataTreasury source.
DataTreasury, founded in 1998, received two patents covering its check-imaging technology in 1999 and 2000. According to the company Web site, DataTreasury began discussing a check-imaging joint venture with officials from Chase Manhattan Bank (now known as JPMorgan Chase), but the bank launched a separate check image processing venture called Viewpointe Archive Services LLC with IBM Corporation and another bank. DataTreasury filed the first in a series of lawsuits against dozens of banks in 2002. U.S. Bank was one of several banks to invest in Viewpointe, which is also a party to the litigation set for trial next week. JP Morgan settled with DataTreasury in 2005.
Banks have alleged that DataTreasury bought up patents for the system that underlies electronic transfers and is trying to shake down companies for licensing fees, saying that DataTreasury's patents are "an example of what's wrong with patent law." Others have characterized the company as a patent troll
Patent troll
Patent troll is a pejorative but questioned term used for a person or company who is a non-practicing inventor, and buys and enforces patents against one or more alleged infringers in a manner considered by the target or observers as unduly aggressive or opportunistic, often with no intention to...
. DataTreasury has stated that Ballard is the inventor of the system and built the company to sell it before the banks stole the idea.
WMR e-Pin patents
In February 2006, DataTreasury purchased four patents from WMR e-Pin, LLCLimited liability company
A limited liability company is a flexible form of enterprise that blends elements of partnership and corporate structures. It is a legal form of company that provides limited liability to its owners in the vast majority of United States jurisdictions...
. These patents were , , , and . On February 24, 2006, DataTreasury filed a complaint in the United States District Court for the Eastern District of Texas
United States District Court for the Eastern District of Texas
The United States District Court for the Eastern District of Texas is the Federal district court with jurisdiction over the eastern part of Texas and is a part of the Fifth Circuit. The court's headquarters are in Tyler, Texas and has five subdivision offices in Beaumont, Lufkin, Marshall,...
accusing over 30 banks and other companies of infringing the patents. These cases are still pending.
Consent decrees
J.P.Morgan Chase settled with DataTreasury.- JPMorgan Chase Acknowledges validity of DataTreasury's Patents
- PNC Bank Acknowledges validity of DataTreasury's Patents
- Groupe Ingenico Acknowledges validity of DataTreasury's Patents
Settlements
The following banks and corporations have settled their lawsuitLawsuit
A lawsuit or "suit in law" is a civil action brought in a court of law in which a plaintiff, a party who claims to have incurred loss as a result of a defendant's actions, demands a legal or equitable remedy. The defendant is required to respond to the plaintiff's complaint...
s with DataTreasury and/or taken a license
License
The verb license or grant licence means to give permission. The noun license or licence refers to that permission as well as to the document recording that permission.A license may be granted by a party to another party as an element of an agreement...
.
- Affiliated Computer ServicesAffiliated Computer ServicesAffiliated Computer Services Inc. provides information technology services as well as business process outsourcing solutions to businesses, government agencies, and non-profit organizations. ACS is based in Dallas, Texas and the current CEO is Lynn Blodgett. ACS is ranked at number 341 on the 2010...
- Bank of New York Mellon CorpBank of New YorkThe Bank of New York was a global financial services company established in 1784 by the American Founding Father Alexander Hamilton. It existed until its merger with the Mellon Financial Corporation on July 2, 2007...
- Bank One
- CitibankCitibankCitibank, a major international bank, is the consumer banking arm of financial services giant Citigroup. Citibank was founded in 1812 as the City Bank of New York, later First National City Bank of New York...
- City National BankCity National BankCity National Bank is an American financial institution headquartered in Los Angeles, California, owned by City National Corporation , with total assets of $21.8 billion . As of 2011, it is the 25th largest bank in USA...
- Community Banking Systems
- Compass Bancshares Inc.Compass BancsharesBBVA Compass is a United States financial holding company headquartered in Birmingham, Alabama, with US$65 billion in assets and primarily located in Alabama, Arizona, California, Colorado, Florida, New Mexico, and Texas. Compass Bancshares is one of the U.S.’s 25 largest banks, and was previously...
- DieboldDieboldDiebold, Inc. is a United States-based security systems corporation that is engaged primarily in the sale, manufacture, installation and service of self-service transaction systems , electronic and physical security products , and software and integrated systems for global financial and...
- First DataFirst DataFirst Data Corporation is an American payment processing company headquartered in Atlanta, Georgia. First Data is a provider of electronic commerce and payment solutions...
- First Tennessee BankFirst Tennessee BankFirst Tennessee is a financial services company based in Memphis, Tennessee. It is a subsidiary of First Horizon National Corporation.-Corporate history:...
- Groupe IngenicoIngenicoIngenico S.A. is a worldwide company, whose business is to provide the technology involved in secure electronic transactions. Its traditional business is based around the manufacture of point of sale payment terminals, but it now also includes complete payment solutions and related services.It...
- JP Morgan Chase
- Mellon Bank
- Merrill LynchMerrill LynchMerrill Lynch is the wealth management division of Bank of America. With over 15,000 financial advisors and $2.2 trillion in client assets it is the world's largest brokerage. Formerly known as Merrill Lynch & Co., Inc., prior to 2009 the firm was publicly owned and traded on the New York...
- NCRNCR CorporationNCR Corporation is an American technology company specializing in kiosk products for the retail, financial, travel, healthcare, food service, entertainment, gaming and public sector industries. Its main products are self-service kiosks, point-of-sale terminals, automated teller machines, check...
- NetDeposit
- PNC Financial ServicesPNC Financial ServicesPNC Financial Services Group, Inc. is a U.S.-based financial services corporation, with assets of approximately $264.3 billion...
- RDM Corp
Patent reexamination
In November 2005, First Data Corporation filed a request for a reexaminationReexamination
In United States patent law, a reexamination is a process whereby a third party or inventor can have a patent reexamined by a patent examiner to verify that the subject matter it claims is patentable...
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 upheld both patents and further allowed DataTreasury to claim additional inventions that were disclosed but not claimed in the original applications.
External links and further reading
- DataTreasury, company site
- DataTreasury Truth, a public relations site managed by DataTreasury shareholders
- http://www.businesswire.com/news/home/20101005007171/en/DataTreasury-Founder-Claudio-Ballard-Named-2010-%E2%80%9CInventor
- "U.S. Bank ordered to pay $53 million in check imaging lawsuit", Minneapolis / St. Paul Business Journal