On Monday, the jury of a federal district court in Texas has charged US Bancorp’s (USB) subsidiary, U.S. Bank, with $27 million for infringement on patents of DataTreasury Corp. DataTreasury alleged that the patents encroached by U.S. Bank were the ones that were originally invented by the company itself.
 
The check-imaging technology of DataTreasury helps to speed up the electronic exchange of checks that are reduced by banks to digital images and exchanged with other banks for easy and hurdle-free usage. This not only reduces the unnecessary clutter of paper copies of the checks but also saves the transportation cost of circulating these checks from one place to another. Hence, the company was granted two architectural patents for this technology in 1999 and 2000.
 
However, on Mar 15, US Bancorp challenged their validity, denying any infringement on DataTreasury’s intellectual property. The U.S. bank is still dissatisfied with the verdict and plans to take this trial to the higher level court. US Bancorp believes that the patents of DataTreasury remain invalid.
 
US Bancorp is not the first bank against which DataTreasury has filed lawsuits on patent infringement. The latter has also charged several big banks such as Bank of America Corp. (BAC), Wells Fargo & Co. (WFC) and JPMorgan Chase & Co. (JPM) over the last few years. While trials for BAC and WFC are scheduled in 2010, JPM recognized the company’s patents as valid in 2005, thereby settling the case and receiving a license from DataTreasury to use its check-imaging technology.
 
Overall, DataTreasury expects to seek over $1.6 billion from about dozen banks against whom it has filed the lawsuits. From US Bancorp alone, the company had previously estimated to earn about $200 million. These costs can weigh modestly on the US Bancorp and other banks’ bottom-line results, if the charges are proved valid.
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