Late last month, Data Treasury, an N.P.E., won a judgment of $27M against U.S. Bancorp for infringement of two business method patents related to processing of checks. The jury found the infringement to be willful, opening the door to a possible trebling of the damages amount. Granted, this was an East Texas jury, but an award of this magnitude to a non-practicing entity (a “troll” in corporate lingo) with respect to business method patents is rather remarkable and merits some study. How did the plaintiff achieve this remarkable result?
First, the plaintiff painted a sympathetic picture of itself. It started life as a high-tech data processing company, only to fail for lack of clients. The two patents-in-suit were the only assets of the company after it burned through $25M in investment capital. It financed its patent enforcement efforts by selling stock to over 1,000 shareholders – some of whom, no doubt, are widows and orphans.
Then, the plaintiff repeatedly emphasized that the patents-in-suit had survived re-examination. When the defendants derided the plaintiff’s technical experts as mere paid witnesses, the plaintiff responded, “[f]our qualified, experienced, unbiased experts have decided whether or not the … patents [are] new and novel. They are the patent examiners … They are paid by the United States of America. They are paid by the United States of America to help protect and make America strong by protecting American inventors and protecting American invention … Trust the Patent Office, folks.”
Finally, the plaintiffs closed by reminding the jury of a DEFENSE expert – whatever was he thinking – who testified that, “… if we disregarded intellectual property rights … we’d end up like India and Egypt where people don’t invent things. Instead, they go around talking about ways they hate America and ways they want to fly airplanes into our buildings.”
It was apparently a safe bet that no East Texas juror wants to be like an Indian or Egyptian. Certainly, none of them was ready to find the patents-in-suit invalid and thereby cause another 9/11. Loyal Americans all, they found for the plaintiff!
THE LESSON TO BE LEARNED: When in doubt, wave the flag – at least in East Texas.
WHAT are you talking about . Your article is nonsense . Claudio Ballard showed the system to Chase and Chase stole it. PERIOD . The patents are architectural not business . Calling Datatreasury a troll after they were forced to sue instead of running their business when Chase cancelled their contract is a plain old lie . What bank do you represent. The banks original cost is estimated at anywhere between $1 to $2 a check asking for a penny and half is way below what they are entitiled to. The fact that if you read the day by day storys of the case , it is perfectly ok for the Vice President of US Bank to get on the stand and say he knew that there was a Claudio Ballard and he had a system in 2003 and then US Bank got sued in 2006 and that is not knowingly and willfully infringing . Futhermore one of the only industries left in our country is the patent system that allows an inventor to invent something and get fairly compensated , destroying the ability for an inventor to make money on his invention and you destroy what is left of America, which is not much.