Lawmakers Debate Patent Immunity For Banks 382
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)."
Well, now... (Score:5, Insightful)
Can't really say more than that, unfortunately.
Re:Well, now... (Score:5, Insightful)
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Unfortunately, it does seem a lot of "fiscal conservatives" have stolen the title from the real fiscal conservatives. Too bad that truth in advertising is outlawed in politics.
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If a bunch of people calling themselves Scotsmen behaved a certain way, would you say that Scotsmen generally behave that way? No, not if they're not true Scotsmen. How do you determine if they're true Scotsmen or not? That's simple: where were they born? What country are they citizens of? These facts are easily checked. I, an American, could call myself a Scotsman, but it wouldn't make me one, since I have no known ancestral ties to Scotland, don't live there, and have never even been there. I
having read the claims... (Score:5, Informative)
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.
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Ugh (Score:3, Insightful)
Re:Ugh (Score:5, Insightful)
Or, instead of feeding the patent troll (Score:5, Insightful)
A billion dollars. Talk about misuse of taxpayer funds.
Too tactical (Score:2)
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!"
Re:Or, instead of feeding the patent troll (Score:5, Informative)
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.
Re:Or, instead of feeding the patent troll (Score:4, Insightful)
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,
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.
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Re:Or, instead of feeding the patent troll (Score:4, Informative)
Just to clarify, given the current spending to date: your reasons cost about $2 each.
Well can't say I blame em. (Score:4, Interesting)
Sometimes a band aid is better than a hastily planned and thus ill-conceived surgery.
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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
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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.
Re:Well can't say I blame em. (Score:4, Insightful)
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.
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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
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Re:Well can't say I blame em. (Score:5, Interesting)
...
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.
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.
Re:Well can't say I blame em. (Score:5, Insightful)
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.
Re:Well can't say I blame em. (Score:5, Insightful)
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.
You must be new here (or very old) (Score:4, Insightful)
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As an American citizen all I can say is, that billion dollars better come from the banks, and not from taxpayers.
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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.
Is anyone really surprised by this? (Score:4, Interesting)
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.
Re:Is anyone really surprised by this? (Score:5, Insightful)
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?
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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:Is anyone really surprised by this? (Score:4, Interesting)
You'll see stock prices are random. Study after study proves it. It's not a mystery but there isn't a formula either.
You'll see that cutting tax rates leads to increased Gov't revenues by growing the economy. (Don't give me the crap about Reagan, he spent it and then some but it busted the Soviet Union..not a bad use of the money).
You'll see the greater than 50% of the Budget goes to Social Programs started in the New Deal and continued to this day. Remember the real cost of Social Security is not well known, it's an off-budget item. And these costs are growing. Medicare alone is predicted to outgrow the growth in GNP (and thus increases in taxes if rates remanin constant) by several hundred percent.
You'll see most people who are retired can't live on Social Security alone. So much for that program.
You'll see that black Americans still are very improverished, and we now have a class of citizens who have been on welfare for generations. Is that helping anyone?
You'll see that other than in 1996 when the Republicans kept their majorities in both the Senate and the House, marking the first time since the late 1920s that Republicans comprised a majority of the House for two consecutive sessions. Republicans held a majority in the U.S. Senate from 1981 through 1986 as well (Reagan 1st term), for one year in 2000 again in 2002 but not since. You can't blame long term problems on groups who haven't been in control of the process.
You'll see a failure to increase a program budget by the proposed X% is called a "cut". If your boss didn't give you that 10% raise did your salary go down?
It's just flat incorrect when you look at facts (scientific methods look at facts not opinions) to blame anyone but the liberal Democrats for the social spending problems we have. Democrats controlled Congress for 80% of the time, and they built the programs and they continued to fund them at increasing rates. Yes, the War in Iraq has taken money in recent years and made things worse but that's a blip of 6 yrs on the radar screen of close to 70 yrs of social spending.
Re:Is anyone really surprised by this? (Score:5, Insightful)
Let's see the data. Seriously. I've seen a lot of people attempt to see the Laffer curve in the data (my favorite being this train wreck of reasoning [wsj.com], but as far as I can tell, they're not doing much better than the people who are attempting to see Jesus in their toast.
I don't remember seeing a lot of vetoes of profligate spending under Republican presidencies when Democrats ran congress, and for the brief period when they ran both, I can't say that they were an example of fiscal restraint. Face it: Politicians have strong incentives to borrow and spend.
If inflation is greater than 10%, yes it did.
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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
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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
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Banks do not need 'money on hand' to create a loan. A Loan, currently, based on fiat, is created out of a ratio of money on hand, and in many cases, out of nothing!
If a bank can create money at will, based on nothing, then where does the money to pay interest come from?
For that matter, if you lower the price of milk by producing more of it, then all milk producers earn less, overall. Less is available to pay their worker
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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
And who would vote for that? (Score:3, Insightful)
The biggest problem is that nobody wants to stop the party.
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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
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Okay- lets take a look at the end result of retiring some of our federal debt.
Before: The private sector has $X in cash and $X in interest bearing assets in the form of securities from the Treasury
The government then forcibly takes $X from the public through taxes and transfers it to the bond holders, dissolving those interest bearing assets in the process.
After: The private sec
Re:Is anyone really surprised by this? (Score:4, Insightful)
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.
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That is a big if. I have basically completely lost confidence in our culture and government when it comes to The Big Issues.
Re:Is anyone really surprised by this? (Score:5, Informative)
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.
I'll bet Mr. Congressthing's steaming... (Score:2)
Heh... (Score:5, Funny)
Re:Heh... (Score:5, Insightful)
(OK, there may be some C in there. Used for string manipulation, probably).
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Re:Heh... (Score:5, Funny)
You're kidding, right? No, our legal code is almost entirely like an entire operating system written in undocumented Perl.
What's grass got to do with it (Score:2)
You've got to be kidding (Score:5, Insightful)
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.
Re:You've got to be kidding (Score:4, Informative)
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.
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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 (Score:2)
"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!"
How about some more ... (Score:2)
other option... (Score:3, Interesting)
I Dont Get It... (Score:5, Informative)
Re:I Dont Get It... (Score:5, Informative)
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)
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.
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Not sure who the bad guys are here - the banks? (Score:4, Insightful)
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?
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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.
Re:Not sure who the bad guys are here - the banks? (Score:4, Insightful)
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
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.
Whose idea was this?! (Score:2, Insightful)
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
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From the 5th Amendment:
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
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Intellectual property is a misnomer. It's not property. If anything, it's more of a temporary grant... it's
I Can See The Future... (Score:4, Interesting)
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?
Wait a minute... (Score:2)
prior art (Score:2)
way to go though, take a broken system and suggest a worse alternative.
If you RTFA you would see (Score:5, Informative)
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.
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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
Oh wait. Thats what many higher-tech lawyers do at their law firms, as do doctors with MR's, and other professional peoples.
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Re:If you RTFA you would see (Score:4, Insightful)
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.
This might be a Good Thing (Score:2)
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
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Smells Fishy (Score:2)
Shenanigans (Score:2)
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
this reeks (Score:2)
What happened to the free market? (Score:4, Insightful)
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.
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IBM (Score:4, Informative)
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.
How did it survive a challenge? (Score:3, Informative)
For Those That Are Interested... (Score:3, Informative)
Business methods should not be patentable (Score:4, Interesting)
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 think Dr. Evil got it right this time (Score:3, Funny)
Number 2, "uh, one Billion, sir."
"Thanks, Number Two.... ahem... for ONE BILLION DOLLARS!"
I don't get it. (Score:3, Interesting)
So what is so special about the Check 21 (check truncation) that warrants a patent?
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Think about it. Even if it only costs 1 cent per check to avoid the scanning, there are billions of checks written each year. The number might be dropping, but the forced $1B purchase would still be far cheaper than switching back.
Though if this is a true submarine patent I think that they should lose it and get nothing but lawyer bills for their trouble.
Of course, I think that about submarine patents in gener
Bank Patent #2 (Score:4, Funny)
Re:Bank Patent #3 (Score:5, Informative)
In come the regulators. They say, "You can loan the money back out, but you have to keep 10% of it on hand." So you get your $10 in deposits and loan out $9 to another person. He spends the $9 and it trickles back to you. Of that $9, you can loan out another $8.10. Eventually, you asymptotically approach zero dollars loaned out (and you've loaned out $100 for your original 10). At the end of it all, you have a balance sheet that looks like this:
Assets: $100 (Loans: People owe you $100, so that's an asset.)
Liabilities: $90 (Savings accounts: *You* owe your depositors $100, which they could choose to withdraw at any time.)
Equity: $10 (You're holding $10 in a drawer somewhere.)
Here's where your thought experiment goes wrong: Let's say people decide not to pay $50 worth of loans back to you. Where are you now?
Assets: $50 (Loans: People owe you $100, but you'll only ever see $50 of it.)
Liabilities: $90 (Savings accounts: *You* owe your depositors $100, which they could choose to withdraw at any time.)
Equity: $-40 (You're in some serious shit if people decide to pull their money out. Your business is worthless now.)
In the real world, odds are good that your depositors aren't going to eat it because the government will bail them out, but you can bet that you're going to get shut down. You see, the banks didn't "create" the money so much as they borrowed it. Even if borrowers don't pay back their debt to the banks, you can bet that demand deposit account holders are going to want the banks to pay them back. This is why the banking industry is regulated. It's a huge leverage machine. There's nothing wrong with that in general, but it's inherently risky. That's why there's all manner of risk pooling and rules about what banks can and can't do with the money they control.
The real world, obviously, is more complicated, but this is a rough illustration of the money multiplier effect. In the US, normal banks don't "create" money as much as they multiply it. For every $1 that the Fed creates, banks multiply the effect in the real economy. It's not any sort of a trick. It's just how the system works.
Re:Bank Patent #3 (Score:5, Informative)
In the case above, the bank got shut down and the FDIC member banks lost out because they had to cover the demand deposits for a failed bank. In the case of the mortgage crisis, the loans weren't paying back into savings accounts. The debt was owned by investors all over the place (check your 401k). Anybody who bought a mortgage backed security lost some value on this one, and there's no FDIC to step in to pay you back. The issue here is the same, though: Somebody paid some money to buy some debt and then the debt became worthless. In the first example, the bank and the bank's insurer got screwed. In the second case, some insurers got screwed along with anybody holding the debt. No matter how you slice it, this mortgage crisis thing is going to hurt a lot of people. It does, however, have the nice side effect of me being able to afford a house and say "I told you so" to people who advised me to buy one when the market was clearly dangerously screwed up. I just feel like a bad guy for enjoying it so much.
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What's wrong with current patents is that they are worded so broadly that they encompass far too much. The one-click patent is a shining example for this. A one-click-buy ability is a no brainer. Getting a patent for that is silly. It's like a patent for a machine that converts chemical energy into kinetic energy, thus including everything from steam engines to rocket engines.
We'd need to get back to patents bein
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Why should anyone apply for a patent in your system then? Just keep your details secret and you've got the same result. Patents were originally developed specifically to discourage this behavior.
One of the ideas behind the patent system is that when you make a valuable invention, I can pay you money to license it since I lack the cleverness needed to figure it out myself. So when I need a good idea (like: How on earth are we going to process all these cheques? ) I read about your patent, and decide to pay you to get use of your brilliant invention. That wouldn't be possible if you kept it secret. So this idea (keeping the implementation of patents secret) makes a lot of sense - if you take the sys
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