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Lawmakers Debate Patent Immunity For Banks 382

Posted by kdawson
from the campaign-contributions-are-merely-a-coincidence dept.
I Don't Believe in Imaginary Property writes "Now that a small Texas company has a patent on scanning and archiving checks — something every bank does — that has survived a USPTO challenge, lawmakers feel they have to do something about it. Rather than reform patent law, they seem to think it wiser to protect the banks from having to pay billions in royalties by using eminent domain to buy the patent for an estimated $1 billion in taxpayer money, immunizing the banks. The bill is sponsored by Sen. Jeff Sessions (R-AL)."
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Lawmakers Debate Patent Immunity For Banks

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  • Well, now... (Score:5, Insightful)

    by Anonymous Coward on Monday February 18, 2008 @07:19PM (#22469422)
    ...that's just fucking retarded.

    Can't really say more than that, unfortunately.
    • Re:Well, now... (Score:5, Insightful)

      by brxndxn (461473) on Monday February 18, 2008 @07:53PM (#22469734)
      The sad thing is that sheer disgust is pretty much the most insightful way to look at this..
    • by PatentMagus (1083289) on Monday February 18, 2008 @09:02PM (#22470364)
      and looked at the re-exam history, and looked to see if there is any obvious payola going into the good senator's pockets, I have to support the earlier conclusion.

      That is just fucking retarded.

      Seriously retarded. A billion taxpayer dollars on the line after the banks have spent, by my estimate, around 30k. I guess it's cheaper to send a teenage male hooker to the senate chambers than to fight this thing. More seriously, there are good reasons to fight this thing in court. Write your senator. Here's a few points:

      KSR v. Teleflex modified the definition of obvious. Making the banks fight will pull in that case law.

      eBay v. MercExchange will make it harder for the patent holder to enjoin the banks from scanning and transmitting check data. so, there's no real danger of banking being shut down as the case is tried.

      It's doubtful that this technology saves the banks a billion dollars. They can always turn to low tech fax machines if they don't want to ship pallets of checks. You can fax an awful lot of checks for a billion dollars.

      If the senate wants to pass a law, pass one that legalizes something else that the banks can do without infringement.

      The banks can easily afford a billion dollars. Bankers award themselves more than that each year as annual bonuses. Furthermore, it gives the banks a legitimate excuse (for a change) to raise fees. The reason will only last a year or two and after that they can use the money to fund reelection campaigns.
  • Ugh (Score:3, Insightful)

    by Anonymous Coward on Monday February 18, 2008 @07:20PM (#22469432)
    Problem is, in this case it might be required as such a distinction in law might not exist.
    • Re:Ugh (Score:5, Insightful)

      by aldousd666 (640240) on Tuesday February 19, 2008 @12:39AM (#22471762) Journal
      I'm not sure you need an advanced degree to figure out that a patent granted based on 'what' you are scanning as opposed to say 'inventing the scanner' is a bit on the obvious side. We should also see patents on scanning each other thing that it's possible to scan. These guys didn't invent a scanner, nor the idea that you should store digital data once you've scanned it, they've only articulated that it's something they'll be doing using a scanner that what they'll be scanning and storing are 'checks'. That's fucking ridiculous. I'll take on out on Newsprint media then. How about Comic Books? perhaps I can 'invent' a system that will 'enable' you to scan your ass on a copier and archive it for later ensuing hilarity. This doesn't show anything but the fact that the guys who granted this patent didn't actually think about it, and that the guys debating it right now are being paid not to admit that they've thought about it by some lobbyist. I'm all for freemarkets and IP, but god damnit, someone vet these things.
  • by FireballX301 (766274) on Monday February 18, 2008 @07:22PM (#22469444) Journal
    They can cashier the USPTO Commissioner, appoint a new one, and order a comprehensive review.

    A billion dollars. Talk about misuse of taxpayer funds.
    • A more general strategic review is required.
      There may be some tragedy involved, of course, but the conclusion at 3:19 in this clip holds true [youtube.com]:
      "This town needs an enema!"
    • by thegrassyknowl (762218) on Monday February 18, 2008 @08:19PM (#22469966)

      A billion dollars. Talk about misuse of taxpayer funds.

      At least it's a start. Somebody realised that the patent could be abused to fuck practically everyone (if you fuck the banks the banks fuck the people; bankers aren't about losing money).

      $1B is a lot of money. Perhaps in the future someone will look back and decide that they could have saved that money by reforming the patent system. It's all too easy to nay-say (I am guilty) but some small movement, even backwards sometimes, is good in what is a mostly stagnant area.

      Also, don't forget that this small Texas startup sold their patent for $1B then paid half back in tax on their earnings.

      • by superswede (729509) on Monday February 18, 2008 @09:20PM (#22470476)
        > $1B is a lot of money. Perhaps in the future someone will look back and decide that they could have saved that money by reforming the patent system. It's all too easy to nay-say (I am guilty) but some small movement, even backwards sometimes, is good in what is a mostly stagnant area. ...or maybe it's time to reform the US bank system - checks belongs to the 20th century!

        Start by providing real electronic transfers and bill payments. For example, to transfer money electronically between accounts in two different US banks (e.g. BofA, WellsFargo, ...) costs something like 20-40 USD and the receiving bank may charge an additional 10 USD. As a comparison, most transfer within the EU is free across banks and countries! It is even cheaper to send money from EU to the US, than within the US.

        The cheapest solution in the US is to send the money via a check. <sarcasm>We've got this beautiful service where we can do "online" payment, which in practice means that a physical check is printed somewhere in the US, mailed to the recipient who then drop it of at her/his bank to cash it. The bank then probably send the check off to another location where it is *scanned* so it can be archived and verified later. That is what I call an efficient bank system.</sarcasm>

        So, maybe DataTreasury is doing us a favor - we might get an improved bank system without checks.

  • by Chris Burke (6130) on Monday February 18, 2008 @07:24PM (#22469456) Homepage
    I mean, it's not like substantive patent reform -- in particular reform that as a side effect fixes this specific case -- is something they can exactly toss together before the term is up. And now that pretty much everyone realizes our economy is treading water before a recession, keeping the banks up seems like a good idea. I mean if we're going to be spending billions in tax payer money to keep banks afloat after the subprime mortgage fiasco, this doesn't seem like that big a deal.

    Sometimes a band aid is better than a hastily planned and thus ill-conceived surgery.
    • Re: (Score:3, Insightful)

      And now that pretty much everyone realizes our economy is treading water before a recession...Sometimes a band aid is better than a hastily planned and thus ill-conceived surgery

      Something is better than nothing, and a small, quick fix is better than a large, bad one. However, in an economy that's teetering on the edge of recession (if not already in it), it seems like a good idea to kill patent trolls as best they can. It doesn't even have to be much; make it so that the company has to have a viable product on the market to be able to sue for infringement and limit the licensing fees to the time that the product was on the market. Quick, simple fix that makes it so that a company

      • Problem in this: What if you have the greatest idea since sliced bread, but to implement it, you'd have to invest a ton of money, more money than you could raise or any sensible investor would give you?

        This would not encourage to innovate. Worse, it would take away any incentive to invest into young enterprises. Instead, large companies would simply try to bleed them dry so their patents become "unused" and thus free.
        • by moderatorrater (1095745) on Monday February 18, 2008 @07:56PM (#22469770)

          What if you have the greatest idea since sliced bread, but to implement it, you'd have to invest a ton of money, more money than you could raise or any sensible investor would give you?
          First, the idea was that you could get a patent just like normal right now, but to enforce it you'd need a working product.

          In this instance, if you have this great idea and can't get the money any other way, what's the use of the patent you have currently? All it's doing is stopping others from making the best thing since sliced bread while you'll never be able to do so. If you were to approach one of the corporations that would profit from your invention, work out a licensing deal with the company so that they can use the patent and nobody else can.

          This is in your best interest since you'll get the money to develop the invention and you will, presumably, be getting large amounts of money for it. It's in the corporation's best interest since they have a monopoly for a while. It's in the economy's best interest because the person with enough talent to come up with the idea in the first place now has the money and the leisure to come up with more ideas while schoolteachers can show their students how all they need are brains and creativity to make it in this country.
        • by iamhassi (659463)
          "Problem in this: What if you have the greatest idea since sliced bread, but to implement it, you'd have to invest a ton of money, more money than you could raise or any sensible investor would give you?"

          Actually the problem is the fucktards at the patent office allowed these assholes to patent sliced bread even though slice bread already existed everywhere, so now they've been given free reign to run around raping the banks.

          The real question is what can't you patent? Has anyone tried patenting doork
    • I bet all the money in the world that the patent holder is heavily contributing to both parties. Why sue when you can get a cool easy billion?
    • by TubeSteak (669689) on Monday February 18, 2008 @07:56PM (#22469768) Journal
      FTFA:

      The banks allege that DataTreasury bought up patents for the system that underlies electronic transfers and is trying to shake down companies for licensing fees. But DataTreasury asserts that Ballard is the inventor of the system and built a company to sell it before being squashed by banks that stole his idea. Court battles have raged between the two sides for six years.
      ...
      He said he talked to some bank officials at an early stage of the check system's development and, despite having signed nondisclosure agreements with them, soon lost control over his invention.
      It sounds like maybe the banks got themselves into this mess and perhaps deserve what is coming to them.

      Not to mention that Senator Session's explanation sounds a bit dishonest:
      "in the wake of the grounding of aircraft laden with billions of dollars in checks after the Sept. 11, 2001, attacks -- federal law was changed to allow electronic transfers as well."

      "Stephen Boyd, a spokesman for Sessions, said the provision "is designed to protect banking institutions complying with post-9/11 security requirements from the abusive practices of patent trolling trial lawyers"

      Which is it?
      Were electronic transfers allowed by the Feds or required by post 9/11 security requirements?
      This whole thing reeks of corporate asshattery.
      • by greenbird (859670) * on Monday February 18, 2008 @08:54PM (#22470290)

        It sounds like maybe the banks got themselves into this mess and perhaps deserve what is coming to them.

        You would have to be an idiot not to see this idea as the most obvious thing to anyone with even half a wit. This idea was inevitable and the idiot that got the patent didn't "invent" anything. It was simply an idea waiting for the cost of the technology and the legal system to catch up with it. That this patent was upheld pretty proves the USPTO is run by morons who would think tying your shoe with a double knot is original enough to be patentable. Digitally scanning documents and using the scans as legal instruments, yeah that took a genius to think up. The banks didn't steal this guy's idea they just took the obvious next step probably oblivious that anyone even talked to the shyster with the patent. I come up with 100's of more original ideas every month in my daily work.

    • by slashqwerty (1099091) on Monday February 18, 2008 @08:10PM (#22469894)
      To use eminent domain on a patent is to reinforce the notion that patents are property rather than an exclusive right. Congress doesn't even have the authority to do this. If our forefathers wanted congress to grant money to inventors they would have placed that power in the constitution. Instead they carefully limited what congress could do:

      To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries

      There is nothing in that statement about congress purchasing someone's rights.

      Consider another intellectual right. Congress has retroactively extended copyrights with every copyright extension in history. Certainly they should be able to retroactively shorten it. But if that day ever comes copyright holders are going to start screaming eminent domain.

      • by Kaseijin (766041) on Monday February 18, 2008 @11:37PM (#22471410)

        Congress doesn't even have the authority to do this...There is nothing in that statement about congress purchasing someone's rights.
        One could make a somewhat principled argument that treating patents as property is "necessary and proper" [wikipedia.org] to exercise the enumerated power. But who needs principles? Under Wickard v. Filburn [wikipedia.org], Congress can do pretty much whatever they want in the name of interstate commerce. Even before that, Frothingham v. Mellon [lectlaw.com] gave Congress license to spend for any purpose not specifically forbidden by the Constitution--naturally, the Ninth and Tenth Amendments don't count.
    • by acvh (120205)
      There is no "reform" in this legislation. We pay the patent holder $1,000,000,000 dollars and take his patent. If I'm him it's a no brainer. No lawsuits, no possibility of losing, and I get a billion dollars.

      As an American citizen all I can say is, that billion dollars better come from the banks, and not from taxpayers.
      • by mog007 (677810)
        While I disgree with what Congress is doing, you're implying that the patent owner has an option to disallow Congress to buy the patent.

        If they use eminent domain, then you have no choice in the matter, you make the sale and take the money, or you go to jail.
  • by ashridah (72567) on Monday February 18, 2008 @07:24PM (#22469458)
    If you consider that pretty much all money in existence today is backed solely by debt [google.com], is anyone really surprised?

    Why does anyone entertain the idea that the banks need to be bailed out? I would be inclined to let the economy finally crumble, and rebuild it. Sure, it'll suck, but we'll be better off because of it, if we fix it the right way.
    • by evanbd (210358) on Monday February 18, 2008 @07:39PM (#22469622)

      if we fix it the right way.

      And what makes you think we would do better the second time around? Is there any actual evidence that anyone knows how to do better (as in, backed by at least a modicum of data, not just a few papers and manifestos)? Is there any evidence that if they do, the people actually rebuilding the economy would pay any attention?

      What makes you think that drastic economic changes would actually succeed? Do you know of any significant examples of replacing a capitalist system with something drastically different and having it work?

      • by ashridah (72567)
        I don't, on hand, no, but see referenced video in my previous post, it mentions a few, and there are probably references for them available.

        There are various schemes based on units of work, etc, although I'm not optimistic about those personally.

        Since then we need to value a job in terms of units of work as well, which means we need to accurately determine how much work is required. What's more, we'd need to consider whether we scale work appropriately based on ability of the participants. Is a smarter and/
    • Re: (Score:3, Informative)

      by Anonymous Coward
      If you consider that pretty much all money in existence today is backed solely by debt, is anyone really surprised?

      Backed by debt? So what? Is a shiny yellow metal any better? Why is gold valuable? There are two main reasons:

      1. people think it is valuable
      2. it has innate industrial value

      Reason #1 can apply to anything else: seashells, silver, euros or dollars. As long as people think it is valuable, it is valuable. Believing in the value of pieces of paper that say "this note is legal tender" is no less val
      • by m0nkyman (7101)
        Missed one: Rarity.

      • Re: (Score:3, Interesting)

        by ashridah (72567)
        The problem is, backing it by debt is inherently untenable in the long term. Once the debt is paid off (a noble goal, but not actually possible in practice,) there is no longer *any* money, resulting in the downfall of the economy.

        This problem is compounded when you consider that even if the economy is based on some amount of principle, and money is created out of the principle, and adds overhead of interest, then the only way to pay back any loans requires the creation of more principle. But when all princ
      • There's a fixed amount of gold.
      • by Daimanta (1140543)
        It's rare(it take considerable effort to take it from the ground)
        It is limited(it's not possible to produce new gold so it's rarity does not fluctuate)
        It is durable(gold decays extremely slow, if you leave it lying around it won't change one bit)
        You can use it for a few things(it's a good conductor and makes shiny jewelry)

        All these points combined make a pretty decent holder of value.

        Euros, dollars and seashells don't have all these properties so their inherent value is different. And yes, silver has pretty
    • It is far easier for a politican to print more money and leave the problem for the next generation, even if in doing so the problem gets worse.

      The biggest problem is that nobody wants to stop the party.

    • Re: (Score:3, Informative)

      by rabtech (223758)
      So what? There are two major things you need to understand about money systems, then it all makes sense.

      1. Commodity-backed currency is not inflation or deflation proof! Instead of being impacted by elected or appointed government officials (who must adhere to various standards of transparency around the world), the value of the currency is impacted by the availability of the commodity compared to the real growth of the economy. If you strike a new major source of Gold your economy experiences massive infla
      • by EllisDees (268037)

        True, the value comes from somewhere, and that "somewhere" is the inflation "tax".
        Then why does the government bother to tax us at all when it can just print money as it is required? If they are going to deflate the value of our money, why not make us happy by letting us keep all of our soon to be worthless money?
    • by bmartin (1181965) on Monday February 18, 2008 @08:14PM (#22469918)
      I have to disagree. The problem here isn't the banks; it's the patent system.

      Patents were designed to help people with new, nontrivial ideas (or new nontrivial ways of doing things that provided some great benefit) protect their investments. They were primarily used for mechanical processes. Unfortunately, when America went from being an industrial nation to a service-oriented one, the rules about patents were perverted into our current catastrophic state. They're more of a legal weapon now than they are a means to secure the fruits of labor.

      There once was a time when the scientific masses used patents as a way to ensure their research would pay off. Modern parents are usually loopholes or technicalities discovered by legal teams; the businesses and the lawyers get rich; the companies that would benefit from the ability to use such technologies to help the economy progress and make the lives of the average Joe easier end up at the short end of the stick.

      Really, patents are about greed and hindering technological progress. They discourage innovation by providing an instant monopoly on technology.
    • Re: (Score:3, Insightful)

      by IronChef (164482)
      I would be inclined to let the economy finally crumble, and rebuild it. Sure, it'll suck, but we'll be better off because of it, if we fix it the right way.

      That is a big if. I have basically completely lost confidence in our culture and government when it comes to The Big Issues.
    • by Skippy_kangaroo (850507) on Monday February 18, 2008 @09:34PM (#22470582)
      It's not backed by debt. It is backed by the power of the government to tax their residents.

      The power to tax is what gives it enduring value because the government can tax current and future generations in order to pay its bills. Thus, it is backed by the sum total production of the economy rather than any one particular commodity. Gold backing is just like the government being able to tax gold producers. But modern money is backed by the ability of the government to tax everyone: gold producers, silver producers, paper producers, Microsoft, etc. That is a much more enduring, less distorting and stable way to determine the value of the currency than the amount of one particular commodity that is subject to a lot of volatility in its supply and demand.
  • ...oooh! Those pesky activist judges! [slashdot.org]
  • Heh... (Score:5, Funny)

    by TheSpengo (1148351) on Monday February 18, 2008 @07:25PM (#22469464)
    Our legal system reminds me of when you write a huge undocumented, uncommented program in C and have other people do additions and debugging.
    • Re:Heh... (Score:5, Insightful)

      by russotto (537200) on Monday February 18, 2008 @07:32PM (#22469546) Journal
      You're close. It's not C, it's an unholy combination of COBOL (used for bit manipulation and other detailed machine-level stuff), FORTRAN (used for database access), and SQL (used for business logic). With plenty of assembler thrown in, and gotos galore.

      (OK, there may be some C in there. Used for string manipulation, probably).

      • Re: (Score:3, Funny)

        by JustShootMe (122551) *
        You're describing what happens when salespeople and politicians try to do a geek's job.
      • Re:Heh... (Score:5, Funny)

        by dgatwood (11270) on Monday February 18, 2008 @08:06PM (#22469852) Journal

        You're kidding, right? No, our legal code is almost entirely like an entire operating system written in undocumented Perl.

        • There are no hints as to what any part of it is supposed to do and it is written in a language that to most people looks like line noise.
        • Every significant patch is applied by adding an additional Perl module that overrides an existing method in an existing module, replacing all of the code in that method with a complete new copy of the method that is almost identical to the old one but adds or removes a backslash in a single regular expression.
        • The entire core logic was written in a crunch session by a bunch of geeks locked in a room together and forced to design it by committee.
        • The application was a rewrite of another application that never really worked well in the first place.
        • Every function name is chosen explicitly to provoke an emotional response in the developer, e.g. thisFunctionSucks() or callMeNow().
  • by nine-times (778537) <nine.times@gmail.com> on Monday February 18, 2008 @07:26PM (#22469480) Homepage

    WTF?

    Patents are supposed to benefit the common good. That's their only purpose. Now that they recognize one case (in many) where patents are crippling productivity, harming the economy, and working against the common good, they do nothing to address the problem of people abusing the patent system. Instead, they take more money from the people, harming the common good further, in order to bail out banks.

    That is completely absurd.

    • by theMerovingian (722983) on Monday February 18, 2008 @08:06PM (#22469858) Journal
      Patents are supposed to benefit the common good. That's their only purpose.

      Actually the original purpose was to reward and protect technological innovators. This was subsequently expanded to innovators of "business methods" with the State Street case [wikipedia.org], a Federal Circuit decision with incredible ramifications.

      Now that they recognize one case (in many) where patents are crippling productivity, harming the economy, and working against the common good, they do nothing to address the problem of people abusing the patent system.

      Patents serve as a limited form of government-granted monopoly. It is sort of like a social contract - if you fully and completely disclose your invention to the public through the patent application process, the government will reward you with a temporary exclusive grant to benefit economically from the invention.

      The patent system itself is legitimate, and has been in effect in various incarnations since medieval Italian city-states. The main controversies are 1) the recent acceptability of business method patents; and 2) the Federal Circuit standard of review on patent cases is de novo, which means that they reconsider the patent from scratch instead of relying on the USPTO's findings of fact. As a result, the Federal Circuit does not fully benefit from the federal agency's domain expertise. All other federal courts (to the best of my knowledge) have to give deference to the findings of federal agencies under the Chevron test [wikipedia.org].

      **Note: Any patent law attorneys out there are invited to take issue with this, as my understanding is not very nuanced.

      Instead, they take more money from the people, harming the common good further, in order to bail out banks.

      This is a separate issue entirely, and I agree that it is an absolutely horrible idea. The very thought of the US taxpayer bailing out enormous corporate banks makes the bile rise in my throat.
    • by plierhead (570797)

      Totally true. This is utter madness.

      Banks are businesses just like any other, though admittedly rather vital to the functioning of the economy.

      Suddenly patent trolls (and according to the article, this guy doesn't really even fit the definition of a troll) have something as big as a Bank in their site, so the powers that be decide its time to hurl taxpayer money at this one patent problem.

      Meanwhile thousands of people in small software companies held back by living under the shadow of these lame troll

  • To quote the most important person in the universe, I say:

    "Fix it, fix it, fix it, fix it, fix it, fix it... fix it, fix it, fix it!"

    Or:

    Congress: "We've blown out our patent system."
    Citizens: "Fix it, fix it, fix it, fix it, fix it, fix it... fix it, fix it, fix it!"
    Congress: "That makes too much sense, you bastards!"
  • let's give them a nice long list of other stupid patents that they ought to pay off from the public purse. They will eventually get the idea that what they are proposing is stupid ... unless they get large 'research grants' from banks and/or patent trolls in which case they will keep their eyes tightly shut.
  • other option... (Score:3, Interesting)

    by youthoftoday (975074) on Monday February 18, 2008 @07:28PM (#22469510) Homepage Journal
    The US government has consistently demonstrated innovation in this area. I think the ideal course of action would be to bomb the headquarters of the patent troll company. End of bank cheque problem. End of patent troll problem. Zero litigation.
  • I Dont Get It... (Score:5, Informative)

    by vajrabum (688509) on Monday February 18, 2008 @07:39PM (#22469618)
    I saw equipment at Recognition Equipment Inc. in 1982 or 1983 ago that did exactly that--scan checks and store the images. How can they have issued a patent on this.
    • Re:I Dont Get It... (Score:5, Informative)

      by shiftless (410350) on Monday February 18, 2008 @08:23PM (#22470018) Homepage
      [quote]I saw equipment at Recognition Equipment Inc. in 1982 or 1983 ago that did exactly that--scan checks and store the images. How can they have issued a patent on this.[/quote]

      I used to work in the banking industry doing data conversions for check imaging systems, so I am somewhat familiar with the way this works, although far from an expert.

      This is not the same thing as what you're talking about. Similar, but not the same.

      Banks have long had systems to scan checks and store the images to optical platters for easy reference. However, they ALSO had to keep the physical copies for seven years, by law. Also banks would physically transport checks back and forth to each other as the check image was [i]not[/i] a legal replacement for the check.

      The Check 21 Act, passed in 2003, basically says that a digital image of the front and back sides of the check can serve as a legal replacement. Banks can then destroy the physical checks instead of having to store them in huge warehouses and such. They can also transmit these checks electronically over secure networks to other banks and to clearinghouses instead of having to send the physical check, greatly reducing the cost and time required to process a check.

      Another benefit of this system is it allows retailers to do what's called "remote capture." Say you write a check at Wal-Mart; now, Wal-Mart scans and images the check right there on the spot and instead of sending the check anywhere, simply initiates an ACH (automated clearinghouse) debit to your bank account. (It's the same system used when your paycheck is direct-deposited into your account, or you use your routing and bank account number to make a credit card payment, for example.) This greatly reduces cost for the retailer.

      So anyway, while some of my details may not be 100% correct or somewhat vague, you see now that Check 21 really is a whole new way of doing things.

      You can find more info here: http://en.wikipedia.org/wiki/Check_21 [wikipedia.org]
  • Taxpayer's Money (Score:4, Insightful)

    by Anonymous Coward on Monday February 18, 2008 @07:42PM (#22469638)
    So in effect, the banks are stealing technology, asking Congress to litigate their loses, and now this Senator is front-man for a huge expenditure of _our_ money to bail them out?

    Something is amiss here, because I'm still paying for my checks. Let the banks and their huge reservoir of money pay for their technologies. With interest.

    I don't care one bit if the banks invested so much of their capital into inflated mortgage loans. That's their problem for not making _sound_ investments. They freaking have _economists_ working in those high-rise offices.
  • A better use for that money would be to hire people who have demonstrated strong work experience and education in technical fields. When he's up for retirement, a close relative of mine would be a great pick. He has experience in a number of very, very technical areas of Computer Science, and if you gave him a research staff to work under him, and good pay, he could easily rip patents like these to shreds. The problem is, the government would never pay an engineer with the depth of education and work experi
    • by winkydink (650484) *
      If your close relative is such a potential patent shredder, then why wouldn't he hire himself out for a $100-200 million now and destroy this patent on behalf of the banks? Don't you think the banks would pay that much right now?
  • by Mr. Roadkill (731328) on Monday February 18, 2008 @07:48PM (#22469688)
    If I understand correctly, Ballard claims to have developed these techniques and methods in the mid-90's, at a time when physical transfer of checks was required - federal law would not have allowed those methods at that time.

    Then, the world turned upside-down - and his invention became a necessity.

    DataTreasury has negotiated licencing with some financial institutions, but there are others that seem to feel that they shouldn't have to pay and aren't afraid to try to make the US taxpayer pay instead.

    While it may be possible to characterise DataTreasury as a "patent troll" by some readings of the term, Ballard appears to be the first to have come up with and documented those methods and techniques and that's been upheld by the USPTO. DataTreasury claims to have attempted to sell the patent-protected system to the banks, who went ahead and ran with their own implementations. Isn't the patent system supposed to be about providing a limited-term monopoly for those who come up with ideas, whether it's an idea for a better mousetrap or a method of performing financial transfers? Isn't it possible that the banks are trying to use their sheer size and influence to avoid paying for something that they really ought to?
    • by ADRA (37398)
      Oh my god, a comment that actually makes sense and doesn't pander to the lowest common Slashdot denominator? Give this person a cookie.

      PS: The patent could be remarkably weak for all I know the only difference between prior art and innovation could be: The ability to scan and copy 'image' for archival purposes VS. The ability to scan and copy 'check' for archival purposes.
    • by ScrewMaster (602015) on Monday February 18, 2008 @10:20PM (#22470868)
      Isn't the patent system supposed to be about providing a limited-term monopoly for those who come up with ideas

      No, and I don't know where you got that from. It's the root of the problem: the patent system was intended to protect implementations of ideas. Got a great new idea for a product? Fine. Make it work first. In fact, until fairly recently in U.S. history a working prototype was required for issuance of a patent. I believe it was a huge mistake to eliminate that requirement.

      Put it this way: if you can't show that your idea can be realized in the physical world then it's just that ... an idea. Fact is, almost all potentially-patentable ideas are either obvious or worthless. Hell, pretty much all ideas are worthless: they're a disposable commodity and very, very few are deserving of patent protection. The system was supposed to be more selective that it is now, and a patent was meant to protect, and more importantly preserve, implementations that were valuable to society. Whether they were valuable to the inventor was a secondary proposition, and it was up to him to make of it what he could in the time allotted.

      Please, read some of Thomas Jefferson's writings on this subject: he was not directly responsible for the patent system, but he was very influential. He expresses the intent of the patent system a lot better than I ever could.

      Had we just stuck with the original system as laid down by the Founders, we wouldn't have found ourselves in this mess. Once again, we find that the Founding Fathers did the job right: it took our modern politicians to corrupt it into the legal, financial and economic disaster that it is today.

      Seems like they've been repeating that scenario rather frequently lately. We've become a nation of falling intellectual and moral fiber being governed by people that have already reached bottom.

      Depressing, really.
  • by erroneus (253617)
    Was it the Banks' idea? Was it the patent troll's?

    It's moronic. Congress can simply act to invalidate the patent to favor public interest or need. They don't need to BUY it! "Eminent Domain" is about actual property, not Intellectual property! The concept of Intellectual Property is about TEMPORARY monopoly or ownership of something that is to be later claimed, owned or otherwise available for public or private use. It's a privilege given to people by the government. When that privilege is misused or
    • From the 5th Amendment:

      ...nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use without just compensation.

      In a lawful society, the government does not give priveleges to the People, the People consent to be governed by the government. The patent system may suck, but having the government taking property, intellectual or otherwise, without due process or compensation is against the law. Period. (Notwithstanding our current administr

      • Re: (Score:3, Insightful)

        by Pinckney (1098477)
        But patents are not property. The patent holders have no natural law right to their patents as they have to their land, their personal effects, their machines, etc. A patent is a limited monopoly granted by the state for the public good. In this sense, there literally is no such thing as intellectual property.
      • by erroneus (253617)
        "Intellectual Property" is a relatively recent invention if you could call it that and it's essentially an agreement... a public contract. When that contract threatens the public, then it's time to consider revoking that contract. If I had a patent on something like food that no one could live without and I simply refused to sell at any price, I'd say there was a good case for revoking that patent.

        Intellectual property is a misnomer. It's not property. If anything, it's more of a temporary grant... it's
  • by GaryPatterson (852699) on Monday February 18, 2008 @08:00PM (#22469802)
    ... and it's not pretty.

    Giving a patent holder a billion dollars to buy their patent will encourage patent trolls to come out in force. The government's giving away billions here, why not give it a go? You can patent something obvious, sue the banks and donate to the political parties. Soon enough someone will buy you out, and you get to retire a very wealthy person!

    Sure, it may not work out so easily, but what's to stop anyone from trying?
  • Patents are good for, what, 17-20 years. I have a hard time believing that banks weren't scanning at least some checks 20+ years ago (or photographing/microfilming them). How is this patent not invalidated by prior art (scanning) or obviousness (photograph/microfilm)?
  • i'd say there's a fair bit of prior art for scanning and archiving something.

    way to go though, take a broken system and suggest a worse alternative.

  • by WillRobinson (159226) on Monday February 18, 2008 @08:04PM (#22469838) Journal
    While I despise patent trolls, if you read the article this guy had a business with 150 people developing and selling this technology. SOME not all banks ripped him off, several of the large banks did license the technology. Others just ripped him off. To stay in business in 2001 he had to lay most of his people off, and sell most of the company.

    Now after a proper legal vetting the banks that just ripped him off are crying and asking the government to save them. Piss on them. They knew exactly what they were doing. This is not a submarine patent. What about the companies that did play the license fee?

    What will the guy who actually developed this get? 2% of the money, less all the legal fees. Just remember, it could have been yhou that developed this.
    • Re: (Score:3, Insightful)

      Fine. Tell me why it is novel?

      I could say the same about lawyer paperwork... I propose a patent on using auto-document feeders, OCR, and ODF data formats for storage on a ...SERVER!!!

      Oh wait. Thats what many higher-tech lawyers do at their law firms, as do doctors with MR's, and other professional peoples.

      • Guess you did not read the article, and this has already made it through the courts and been proven to be a novel idea (read no prior art).
    • by RightSaidFred99 (874576) on Monday February 18, 2008 @10:57PM (#22471144)
      Bullshit. This is the definition of a patent troll. He came up with an "idea" just so he could prevent the banks from doing it. And his "idea" is fucking stupid. Gee, let's scan documents and use them for something. But wait, _IN A BANK_! Genius! This guy is a fucking piece of shit and he doesn't deserve a penny.

      Invention: Apparatus for scanning a document.

      Invention: Mechanism for archiving scanned data to a new medium I've invented and will describe herein.

      Invention: I've discovered a new way to compress check images, using this very specific algorithm which is entirely new.

      NOT invention: I can scan a check (technology for this is old) and use it for this specific purpose!

      It's stupid and indefensible.

  • I'm all for patent change, but even if they pass it, it won't help this case.

    You can't retroactively change the laws. The laws may be lousy, but the fact is that these people got their patent legally under the current system. Now that they've got it, Congress can't all of a sudden decide they don't like the law and tell them, "well, on second thought maybe you can't have this patent." Any change would only apply to new patents. If they tried to apply it retroactively, the courts would shoot it down in a
    • I think you're thinking of criminal law...
      • by Wateshay (122749)
        Civil law does loosen the restrictions on ex post facto, but it doesn't eliminate it completely. If applied retroactively, this would clearly be a law aimed at punishing a specific individual who had no reasonable expectation at the time he got the patent that the law would be changed to invalidate it. Regardless of whether this is a legitimate patent (it's not 100% clear from the article that it isn't), the people who own the patent have clearly spent a lot of money getting and defending it. I don't thi
  • Has anyone checked out whether Sessions has any personal interest in this bill, or whether he might be getting a kickback?
  • Isn't there a "Triviality" clause in patent laws somewhere? This is something no one needs to invent. It's an obvious application of available technology.

    If someone has patented "Taking a Photo", but no one's patented "Taking a Photo of a Bicycle" can I?

    This CRAZY check scanning idea is a trivial extension of Scanning and Archiving documents,
    which is a trivial extension of Scanning and Archiving paper items,
    which is a trivial extension of Scanning and Archiving Physical Objects Digi
  • Slashdot, keep us posted on this. I want to see how my Senators vote on this bill. I would also like people to suggest letters to write their Senators that don't include insults. It isn't as easy as you'd think because patent reform can be complex depending on how you look at it.
  • by BlackSabbath (118110) on Monday February 18, 2008 @08:30PM (#22470078) Homepage
    Great. Whatever happened to the party of the free market?

    When Democrats spend tax dollars propping up "unsuccessful" citizens its called welfare-state communism.
    When Republicans spend tax dollars propping up "unsuccessful" corporations its called...what exactly?

    The patent system may be knackered but the answer isn't this absurd gesture of government largesse.
    • When Republicans spend tax dollars propping up "unsuccessful" corporations its called...what exactly?
      It's called their party platform.
  • IBM (Score:4, Informative)

    by NullProg (70833) on Monday February 18, 2008 @08:34PM (#22470118) Homepage Journal
    IBM owns the bank check processing business (I did check payment programming for four years and have a 3lb MICR reader decorating my metallic file cabinet to prove it). I'm pretty sure IBM has a patent that covers this. If an IBM patent won't cover it then check with NCR (Bought by AT&T then released into the wild again as NCR).

    That being said,

    I believe what has been patented here is the method to process checks directly just like a debit card (Those little merchant machines that scan and process your check directly and/or the debit payment inserted into the network from a check by phone payment). Unlike a check which travels through the FED/ACH system, this transaction goes through the debit network (STAR, PULSE, HONOR) etc. There is no FLOAT time for the purchaser.

    This claim isn't exactly a software patent, and its sort of unique. Its not revolutionary (more like evolutionary) the banking industry shouldn't pay a dime for it (neither should congress).

    If I could find my notebook from 1995/1996 I could show prior art from designing a system to accept payments via users check routing/account info directly into the debit network via a web browser. And no, my design wasn't secure. Note that with this claim (I have no proof without the notebook) and a dime will still equal a dime.

    My two cents,
    Enjoy.

  • by SwashbucklingCowboy (727629) on Monday February 18, 2008 @08:36PM (#22470144)
    After scanning through the claims in both patents, this is about routing scanned images onto hierarchical storage. Even back in 1997 this shouldn't have passed the obviousness test.
  • by SwashbucklingCowboy (727629) on Monday February 18, 2008 @08:42PM (#22470190)
    Banking provides a decent amount of money to Sessions campaign coffers, but not an overwhelming amount. See http://www.opensecrets.org/politicians/indus.asp?CID=N00003062&cycle=2008 [opensecrets.org]
  • by belg4mit (152620) on Monday February 18, 2008 @08:48PM (#22470234) Homepage
    And that includes 1-click, etc. BofA has a patent on "Keep the Change," an admittedly clever idea,
    and so Wachovia has to opt for the less user-friendly: take a dollar on every transaction. (Actually,
    they could presumably go for the "X% of the transaction value")
  • "I'll patent a technology employing 'computers' to 'scan' checks, thereby holding the whole banking industry hostage... for ONE MILLION DOLLARS!"

    Number 2, "uh, one Billion, sir."

    "Thanks, Number Two.... ahem... for ONE BILLION DOLLARS!"
  • I don't get it. (Score:3, Interesting)

    by ACMENEWSLLC (940904) on Monday February 18, 2008 @09:38PM (#22470606) Homepage
    There must be something special about the check 21 aspect of this. We have been scanning and indexing checks in an imaging system and mentioned in the patents, since 1991. We've used ASCII and EBCDIC, Optical Jukeboxes, etc as described by the patent. Some of the checks use overlays so we can save disk space by storing the ASCII text separate from the check image. All of this since 1991.

    So what is so special about the Check 21 (check truncation) that warrants a patent?

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