In April 2015, the Patent Trial and Appeal Board held that DataTreasury’s patents relating to check-imaging methods and processes were invalid because the two patents, known as the Ballard patents, claim nothing more than the abstract idea of transmitting encrypted information from one place to another. However, that victory has apparently not slowed down the Patent Trolls. Since the ruling in the DataTreasury case, several Patent Trolls have already resurfaced, demanding significant sums from various banks and financial institutions.
In April 2015, Finnavations, LLC filed 17 lawsuits against various banks and financial institutions in the Eastern District of Texas. It is asserting that the Mobile Banking Platform utilized by the financial institutions allegedly infringes Finnovations’ patent entitled “Financial Management System.”
In May, Plano Encryption Technology (Plano) started sending out numerous demand letters to various banks, credit unions and other financial institutions alleging that the financial institutions infringe Plano’s patents related to the secure transmission and storage of data from customers. Subsequently, beginning at the end of June, Plano began filing a series of lawsuits against banks in the Eastern District of Texas. So far, Plano has filed three separate lawsuits.
Then, at the beginning of July, Turn IP filed 23 separate lawsuits, again in the Eastern District of Texas. It is asserting that various banks and financial institutions allegedly infringed its patent, entitled “User Interface for Defining and Automatically Transmitting Data According to Preferred Communication Channels,” which relates to the sending and storing of data and information over a network having a plurality of network subscribers. Turn IP accuses the various banks of violating the patent by providing services “which allowed its customers to choose their preferred method of contact such as by choosing paperless billing or allowing the customer to choose the address, e-mail, or phone number to be contacted at” of infringing the Turn IP patent. Although the patent expired on October 4, 2013, Turn IP now seeks monetary damages for the six years prior to filing of the lawsuit.
If you have received one of these letters or been served, below are steps to take immediately:
- Check your appropriate vendor contract for an indemnity and duty to defend. In any event, promptly notify the vendor(s) in writing about these claims and ask them to provide a defense to the bank.
- Implement a “litigation hold” to make sure that you don’t inadvertently destroy records that might relate to the threatened litigation. Don’t overlook emails that might relate to the programs that are under attack.
- Send a copy of the letter or pleadings to Shannon Phillips at IBAT.
We are working collaboratively to develop a joint strategy on this new round of claims so that no one bank or entity need stand alone. The Dykema Cox Smith team of IP counsel has begun researching the validity of these patents and is working toward a proactive approach through IBAT.