PTAB Invalidates Two Check-Imaging Patents

Case: Fidelity National Information Services, Inc. v. DataTreasury Corp.

Issue: Whether DataTreasury Corp.’s (DataTreasury) two patents for digital checking imaging are too abstract for patenting.

Case Summary: The U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) issued decisions invaliding two of DataTreasury’s check-imaging patents as too abstract.
Respondent DataTreasury Corp. holds a pair of patents, known as the Ballard patents, claiming methods for creating digital images of checks and other financial documents and transmitting and storing the images at a central facility. The Ballard patents were designed to provide an automated, reliable, and secure system to process electronic and paper transactions. DataTreasury described its patents as “among the most thoroughly validated and valuable in the United States” and were a “foundation to modern day, image-based check processing” that have saved banks billions in dollars in costs.

In May 2013, DataTreasury sued Fidelity National Information Services, Inc. (Fidelity) in Texas federal district court for infringement of the Ballard patents. Fidelity filed a petition to the PTAB to review the Ballard patents under the American Invents Act’s business method review program. Fidelity argued the patents are invalid because they recite abstract ideas that “do not invent any new machine or process” and use “off-the-self components to perform their known functions.”

The PTAB determined the Ballard patents are ineligible for patent protection because the patents claim to narrow the abstract application of transmitting encrypted information to a particular field, which the U.S. Supreme Court ruled is invalid under Alice and Mayo. The Board concluded the patent claims “recite nothing more than conventional equipment and steps” and are not eligible for patent protection.

Bottom Line: The ruling is a victory for Fidelity after it became the latest major bank to be sued by DataTreasury over alleged infringements. JPMorgan, Bank of America Corp. and Citigroup Inc. collectively paid DataTreasury $350 million to settle infringement claims. The patents are now worthless unless DataTreasury prevails on appeal.

About Thomas Pinder

Thomas Pinder
Thomas Pinder is senior vice president and senior counsel for litigation in the office of ABA's general counsel.
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