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Lawmakers Debate Patent Immunity For Banks

kdawson posted more than 6 years ago | from the campaign-contributions-are-merely-a-coincidence dept.

Patents 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)."

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Well, now... (5, Insightful)

Anonymous Coward | more than 6 years ago | (#22469422)

...that's just fucking retarded.

Can't really say more than that, unfortunately.

Re:Well, now... (4, Insightful)

brxndxn (461473) | more than 6 years ago | (#22469734)

The sad thing is that sheer disgust is pretty much the most insightful way to look at this..

Ugh (3, Insightful)

Anonymous Coward | more than 6 years ago | (#22469432)

Problem is, in this case it might be required as such a distinction in law might not exist.

Bank Patent #1 (1)

tristian_was_here (865394) | more than 6 years ago | (#22469440)

Charge people for withdrawing their money

Bank Patent #2 (3, Funny)

fireman sam (662213) | more than 6 years ago | (#22469696)

Charge people for depositing their money.

Or, instead of feeding the patent troll (5, Insightful)

FireballX301 (766274) | more than 6 years ago | (#22469444)

They can cashier the USPTO Commissioner, appoint a new one, and order a comprehensive review.

A billion dollars. Talk about misuse of taxpayer funds.

Too tactical (1)

smitty_one_each (243267) | more than 6 years ago | (#22469522)

A more general strategic review is required.
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 (1, Funny)

Anonymous Coward | more than 6 years ago | (#22469788)

A billion dollars. Talk about misuse of taxpayer funds.

Wow, better to spend on a patent than avoid an unnecessary war!

Re:Or, instead of feeding the patent troll (2, Insightful)

Anonymous Coward | more than 6 years ago | (#22469850)

STFU there's no reason to bring up the "unnecessary" war in every government action.

Re:Or, instead of feeding the patent troll (4, Informative)

thegrassyknowl (762218) | more than 6 years ago | (#22469966)

A billion dollars. Talk about misuse of taxpayer funds.

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.

I better get started on that letter! (0)

Anonymous Coward | more than 6 years ago | (#22469448)

So, I go back in time a few weeks ago, write a letter to my senators and representative about this, and by the time it clears all their anthrax-detectors and security checks, I might get an auto-generated response 3 months after they give my money to this guy (why can't they tell the banks to pay the $1 billion?) thanking me for my input and telling me that they don't care what I think because I didn't attach a large enough check.

And people wonder why nobody participates in this shit anymore.

Well can't say I blame em. (3, Interesting)

Chris Burke (6130) | more than 6 years ago | (#22469456)

I mean, it's not like substantive patent reform -- in particular reform that as a side effect fixes this specific case -- is something they can exactly toss together before the term is up. And now that pretty much everyone realizes our economy is treading water before a recession, keeping the banks up seems like a good idea. I mean if we're going to be spending billions in tax payer money to keep banks afloat after the subprime mortgage fiasco, this doesn't seem like that big a deal.

Sometimes a band aid is better than a hastily planned and thus ill-conceived surgery.

Re:Well can't say I blame em. (2, Insightful)

moderatorrater (1095745) | more than 6 years ago | (#22469550)

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 has to at least be investing something into the economy when they enforce the patent.

Probably the worst thing about this fiasco is that, by creating this law, they're admitting that there's a problem with the patent system, but not fixing it. If congress were to have plans to enact real patent reform, but they want to get this done first so banks don't have to wait, that'd be reasonable. Instead, we have a congress that's only going to do anything this time because it's affecting a rich industry.

Re:Well can't say I blame em. (1)

Opportunist (166417) | more than 6 years ago | (#22469658)

Problem in this: What if you have the greatest idea since sliced bread, but to implement it, you'd have to invest a ton of money, more money than you could raise or any sensible investor would give you?

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. (3, Insightful)

moderatorrater (1095745) | more than 6 years ago | (#22469770)

What if you have the greatest idea since sliced bread, but to implement it, you'd have to invest a ton of money, more money than you could raise or any sensible investor would give you?
First, the idea was that you could get a patent just like normal right now, but to enforce it you'd need a working product.

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.

Re:Well can't say I blame em. (0)

Anonymous Coward | more than 6 years ago | (#22469946)

We're treating water on the edge of a recession, why? would 30 years of foreign oil dependence? 20 years of 'cheap Chinese' imports, and to top it all off a bunch of laws making it harder for companies to stay in business unless they have 'niche' markets that the foreigners don't want, or don't understand well enough to replace local production.

Well, I'd say that is a recipe for recession add on top of it the fact that we've had standing army forces in Germany, Japan and South Korea, and on top of that are fighting a war in Afghanistan and Iraq...

Just where exactly is the money coming from?

the auto industry hasn't been that great, Japan and Korea both export to us, while neither import very many American made cars. It is true, that American movies, television etc are exported globally, and windows is exported globally, and American tobacco is sold world wide... plus you can get coca-cola anywhere...

Microsoft brought a lot of money back to America, only to start sending it to 'India' when they realized they could make more money investing overseas than in the USA...

Unless an American revolutionized hydrogen fusion, i really don't see a viable path to renewed 'prosperity' for America. China has won the war by poisoning their rivers, and blackening their skies with soot.

add-in the fact that many American children are totally unwilling to work at jobs that, involve doing work. and we've got a recipe for a collapse of a once great country.

Re:Well can't say I blame em. (0)

Anonymous Coward | more than 6 years ago | (#22469568)

Yes because scanning and archiving data is so novel. what a great idea, I wonder if anyone did this kind of thing on BBSs. OH WAIT! How about eminent domain and pay the fucker a dollar. Then disbar all they lawyers who signed on to it. Or, instead we could lynch the whole bunch of them for being pedantic. Which incidentally is the outcome I'd prefer. The fact that it's a check that's important data someone as opposed to pics of Traci Lords is irrelevant.

Re:Well can't say I blame em. (1)

TheGeneration (228855) | more than 6 years ago | (#22469620)

I bet all the money in the world that the patent holder is heavily contributing to both parties. Why sue when you can get a cool easy billion?

Re:Well can't say I blame em. (5, Interesting)

TubeSteak (669689) | more than 6 years ago | (#22469768)

FTFA:

The banks allege that DataTreasury bought up patents for the system that underlies electronic transfers and is trying to shake down companies for licensing fees. But DataTreasury asserts that Ballard is the inventor of the system and built a company to sell it before being squashed by banks that stole his idea. Court battles have raged between the two sides for six years.
...
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.
It sounds like maybe the banks got themselves into this mess and perhaps deserve what is coming to them.

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. (4, Insightful)

slashqwerty (1099091) | more than 6 years ago | (#22469894)

To use eminent domain on a patent is to reinforce the notion that patents are property rather than an exclusive right. Congress doesn't even have the authority to do this. If our forefathers wanted congress to grant money to inventors they would have placed that power in the constitution. Instead they carefully limited what congress could do:

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries

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.

Re:Well can't say I blame em. (1)

acvh (120205) | more than 6 years ago | (#22470004)

There is no "reform" in this legislation. We pay the patent holder $1,000,000,000 dollars and take his patent. If I'm him it's a no brainer. No lawsuits, no possibility of losing, and I get a billion dollars.

As an American citizen all I can say is, that billion dollars better come from the banks, and not from taxpayers.

Re:Well can't say I blame em. (1)

mog007 (677810) | more than 6 years ago | (#22470082)

While I disgree with what Congress is doing, you're implying that the patent owner has an option to disallow Congress to buy the patent.

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? (4, Interesting)

ashridah (72567) | more than 6 years ago | (#22469458)

If you consider that pretty much all money in existence today is backed solely by debt [google.com] , is anyone really surprised?

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? (4, Insightful)

evanbd (210358) | more than 6 years ago | (#22469622)

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?

Re:Is anyone really surprised by this? (1)

ashridah (72567) | more than 6 years ago | (#22469682)

I don't, on hand, no, but see referenced video in my previous post, it mentions a few, and there are probably references for them available.

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/or more capable person worth more work units? if so, that makes less capable people worthless, and doomed to remain worthless.

Re:Is anyone really surprised by this? (1, Insightful)

Cadallin (863437) | more than 6 years ago | (#22469766)

It worked the last time, and we got a good 30-40 years out of it, before the republicans destroyed it. The New Deal & Great Society did not collapse on their own. They are struggling under a concerted 50 year campaign by the Republican party to destroy them. Social Security is still around, despite every effort of the republicans to kill it (up to and including stealing the entire trust fund). Bretton Woods took a long time to show its flaws, and it was undermined by republicans pushing for unfair advantages to export nations (which the USA was at the time), and it took the combination of Vietnam and Richard Nixon's trade with communist China (a horrible, horrible idea) AND the Oil Crisis to bring it down.

The sources of the current problems are not mysterious. We know how every one happened. There's just too much misdirection by the Neo-Conservatives and Libertarians ranting about how the market is so "magical" and "mysterious" that no one can understand it. That's bullshit. You approach scientifically just like any other field of study.

Re:Is anyone really surprised by this? (1, Interesting)

Anonymous Coward | more than 6 years ago | (#22469826)

There's just too much misdirection by the Neo-Conservatives and Libertarians ranting about how the market is so "magical" and "mysterious" that no one can understand it. That's bullshit. You approach scientifically just like any other field of study.
I've never met a conservative or libertarian who called the market magical or mysterious or claimed it was beyond understanding.

Re:Is anyone really surprised by this? (1)

corbettw (214229) | more than 6 years ago | (#22470074)

How the hell did this drivel get scored Insightful?

First off, there was no new economic system created by the New Deal, nor by the Great Society. They both functioned as government programs within a capitalistic economic system. If there was any new economic system in the last 100 years, it was the creation of the Federal Reserve, which predates the New Deal. Social Security is most certainly NOT an economic system.

Secondly, to insist that Bretton Woods was "undermined" by Republicans is pure partisan drivel. Its collapse had as much to do with poor monetary policy in every administration starting with Truman and ending with LBJ, neither of whom were Republicans (though they probably both would be today, along with the other Democrat during that period, JFK). Nixon can be credited with trying to save the system, or at least inject new life into it, when he abolished the gold standard. But it was an inherently flawed system in the first place that ignore the effects of markets on trading of currency. The modern FOREX system is considerably more advanced and effective because it embraces markets.

Lastly, no one says the market is "magical" or "mysterious". The under pinnings of the Free Market system are well understood by economists and theorists, and it is studied quite well as the science that it is. Saying it isn't is such a twisting of how things really are that I suspect you are not merely misinformed, but are outright lying. Though I'll take General Napoleon's advice on this matter and grant you the benefit of the doubt.

Re:Is anyone really surprised by this? (0)

Anonymous Coward | more than 6 years ago | (#22469726)

There are many unsolved fundamental problems with the way market economies work. The amount and source of money is only one of those, self-perpetuating wealth without merit another. Unless you have a really good idea for solving these problems (without losing sight of the competitive nature of mankind,) making the system crash will just cause another expensive and dangerous iteration. Even though that is probably inevitable in the long run, I would prefer that it isn't caused by such a rather unimportant and ultimately cheap irritation.

Re:Is anyone really surprised by this? (3, Informative)

Anonymous Coward | more than 6 years ago | (#22469732)

If you consider that pretty much all money in existence today is backed solely by debt, is anyone really surprised?

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 valid than believing in the value of gold.

Re:Is anyone really surprised by this? (1)

m0nkyman (7101) | more than 6 years ago | (#22469902)

Missed one: Rarity.

Re:Is anyone really surprised by this? (1)

Lord Pillage (815466) | more than 6 years ago | (#22470072)

Of course money has value because it cannot be reproduced (easily) and therefore can hold value greater than its innate worth since this, in a way, creates rarity (since there is only one source, the mint).

Re:Is anyone really surprised by this? (2, Interesting)

ashridah (72567) | more than 6 years ago | (#22469912)

The problem is, backing it by debt is inherently untenable in the long term. Once the debt is paid off (a noble goal, but not actually possible in practice,) there is no longer *any* money, resulting in the downfall of the economy.

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 principle is created out of debt, then there can never be enough money to pay off the interest. It's worse than a zero sum game.

Obviously, we cannot base the economy on physical objects either. They're not convenient, and we'd wind up replacing them with some kind of convenient representation, and we'd wind up back where we started, as the representation would need to be controlled. There are things that cannot be replicated however. Work is one of them. See LETS [wikipedia.org] (Local Exchange Trading System) for instance. It's unfortunate that it sounds similar to communism, yet you can easily turn it into a capitalist-like society, since it can be built without government control (and thus, is not actually communist either)

Re:Is anyone really surprised by this? (1)

Metasquares (555685) | more than 6 years ago | (#22469934)

There's a fixed amount of gold.

Re:Is anyone really surprised by this? (1)

Daimanta (1140543) | more than 6 years ago | (#22470020)

It's rare(it take considerable effort to take it from the ground)
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 much the same properties as gold making it a good holder of value.

And who would vote for that? (2, Insightful)

EmbeddedJanitor (597831) | more than 6 years ago | (#22469796)

It is far easier for a politican to print more money and leave the problem for the next generation, even if in doing so the problem gets worse.

The biggest problem is that nobody wants to stop the party.

Re:Is anyone really surprised by this? (3, Informative)

rabtech (223758) | more than 6 years ago | (#22469900)

So what? There are two major things you need to understand about money systems, then it all makes sense.

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 inflation and a huge shock (see: Spain, 1600s). If you fail to discover new sources of gold, you experience deflation as the same ol' amount of gold must now account for your increased population, productivity, and/or GDP.

2. The Federal Reserve does not adjust the money supply purely by open market operations or reserve requirements; what you were taught in high-school economics is wrong. The Feds have a target overnight lending rate, which is how they control inflation. Banks have set reserve requirements that they MUST meet or they cease operating.

If a bank is below its reserve requirement, the overnight rate will tend toward infinity; if the choice is paying 45% interest or shutting down operations, the bank will pay 45%. The problem is if the Fed buys or sells bonds, or adjusts reserve requirements, that changes the total amount of reserves in the system, which affects the Banks, which in turn requires an off-setting operation by the Fed to push the overnight rate back where the Fed wants it to be.

The real way money is injected or removed from the economy in a fiat money system is through government debt... after all, the only reason you and I need that fiat money is to pay the government's taxes, otherwise we could just use our own money or some other country's money.

Whenever the government takes in more money than it spends (surplus), this tends toward deflation. The Treasury pays off its loans from the Fed, resulting in money evaporating from the Reserve Banking system entirely! All those people calling for the government to balance its budget have no idea what they are talking about - if the government did that over the long term it would cause major shocks to our financial system.

When the government spends more than it takes in, the Fed issues new currency (injecting cash into the Reserve system) by buying bonds from the Treasury. If you understand the debt this way, you realize that over half of the "National Debt" is nothing more than accounting entries at the Federal Reserve and don't represent money owed to anyone... nor even money that must ever be paid back!

True, the value comes from somewhere, and that "somewhere" is the inflation "tax". All spending by the government above receipts is captured in the form of inflation, which itself (in small doses) encourages people to put their money to work, lest it sit and have a portion of its value evaporate every year.

Re:Is anyone really surprised by this? (0)

Anonymous Coward | more than 6 years ago | (#22470058)

>Instead of being impacted by elected or appointed

>value of the currency is impacted by the availability

I think the word you're looking for is 'affected'. 'Impacted' is what happens to your wisdom teeth, unless you just like talking like a business school flunky.

Re:Is anyone really surprised by this? (1)

EllisDees (268037) | more than 6 years ago | (#22470100)

True, the value comes from somewhere, and that "somewhere" is the inflation "tax".
Then why does the government bother to tax us at all when it can just print money as it is required? If they are going to deflate the value of our money, why not make us happy by letting us keep all of our soon to be worthless money?

Re:Is anyone really surprised by this? (4, Insightful)

bmartin (1181965) | more than 6 years ago | (#22469918)

I have to disagree. The problem here isn't the banks; it's the patent system.

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.

Re:Is anyone really surprised by this? (2, Insightful)

IronChef (164482) | more than 6 years ago | (#22470052)

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.

That is a big if. I have basically completely lost confidence in our culture and government when it comes to The Big Issues.

I'll bet Mr. Congressthing's steaming... (1)

autophile (640621) | more than 6 years ago | (#22469460)

...oooh! Those pesky activist judges! [slashdot.org]

Heh... (5, Funny)

TheSpengo (1148351) | more than 6 years ago | (#22469464)

Our legal system reminds me of when you write a huge undocumented, uncommented program in C and have other people do additions and debugging.

Re:Heh... (4, Insightful)

russotto (537200) | more than 6 years ago | (#22469546)

You're close. It's not C, it's an unholy combination of COBOL (used for bit manipulation and other detailed machine-level stuff), FORTRAN (used for database access), and SQL (used for business logic). With plenty of assembler thrown in, and gotos galore.

(OK, there may be some C in there. Used for string manipulation, probably).

Re:Heh... (2, Funny)

JustShootMe (122551) | more than 6 years ago | (#22469656)

You're describing what happens when salespeople and politicians try to do a geek's job.

Uncalled For (0)

enoz (1181117) | more than 6 years ago | (#22469700)

In Soviet Russia, perl writes legal system.

Re:Heh... (5, Funny)

dgatwood (11270) | more than 6 years ago | (#22469852)

You're kidding, right? No, our legal code is almost entirely like an entire operating system written in undocumented Perl.

  • There are no hints as to what any part of it is supposed to do and it is written in a language that to most people looks like line noise.
  • Every significant patch is applied by adding an additional Perl module that overrides an existing method in an existing module, replacing all of the code in that method with a complete new copy of the method that is almost identical to the old one but adds or removes a backslash in a single regular expression.
  • The entire core logic was written in a crunch session by a bunch of geeks locked in a room together and forced to design it by committee.
  • The application was a rewrite of another application that never really worked well in the first place.
  • Every function name is chosen explicitly to provoke an emotional response in the developer, e.g. thisFunctionSucks() or callMeNow().

Re:Heh... (0)

Anonymous Coward | more than 6 years ago | (#22469754)

You mean Sendmail was written by the government? It figures...

Good for them (1)

Tuor (9414) | more than 6 years ago | (#22469476)

I'd rather get my canceled checks back anyway.

Re:Good for them (1)

MountainLogic (92466) | more than 6 years ago | (#22469612)

The parent sounds flippant, but in fact that is how it was done for decades. Why not jut go back to the way it was rather than pay $Bs

Re:Good for them (0)

Anonymous Coward | more than 6 years ago | (#22469846)

merchant scans in check and destroys it, sends data to bank vs the cost of keeping all those checks, shipping them to 100s of individual banks, having those banks ship it to their clients... much easier to shift bits, since everything is heading that anyway.

Re:Good for them (1)

Firethorn (177587) | more than 6 years ago | (#22469884)

Because such a company is smart enough to charge just below what it would cost to do such a move.

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 general.

Of course, my personal thoughts on a submarine patent is one from a company with no product using that patent that doesn't attempt to enforce the patent until it becomes at least some level of industry standard practice.

What's grass got to do with it (1)

emj (15659) | more than 6 years ago | (#22469478)

Lawnmaker...

You've got to be kidding (5, Insightful)

nine-times (778537) | more than 6 years ago | (#22469480)

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 (3, Informative)

theMerovingian (722983) | more than 6 years ago | (#22469858)

Patents are supposed to benefit the common good. That's their only purpose.

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.

Re:You've got to be kidding (1)

plierhead (570797) | more than 6 years ago | (#22469964)

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 trolls get zip - worse than zip, their taxes are used to help out the Banks.

To quote the most important person in the universe (1)

kimvette (919543) | more than 6 years ago | (#22469492)

To quote the most important person in the universe, I say:

"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 ... (1)

Alain Williams (2972) | more than 6 years ago | (#22469502)

let's give them a nice long list of other stupid patents that they ought to pay off from the public purse. They will eventually get the idea that what they are proposing is stupid ... unless they get large 'research grants' from banks and/or patent trolls in which case they will keep their eyes tightly shut.

other option... (3, Interesting)

youthoftoday (975074) | more than 6 years ago | (#22469510)

The US government has consistently demonstrated innovation in this area. I think the ideal course of action would be to bomb the headquarters of the patent troll company. End of bank cheque problem. End of patent troll problem. Zero litigation.

What the heck is wrong with Alaska? (-1, Offtopic)

Dr.Dubious DDQ (11968) | more than 6 years ago | (#22469516)

I guess it's not just Ted Stevens, then...

Re:What the heck is wrong with Alaska? (0)

Anonymous Coward | more than 6 years ago | (#22469574)

Alaska?
AL is Alabama... Alaska is AK

Re:What the heck is wrong with Alaska? (2, Informative)

ameyer17 (935373) | more than 6 years ago | (#22469600)

Except AL is Alabama. Alaska is AK.

Re:What the heck is wrong with Alaska? (1)

corbettw (214229) | more than 6 years ago | (#22470124)

Except AL is Alabama. Alaska is AK.
Stupid Alaska can't even get their state code right!

Proposed (radical) Patent Reform (1)

hudsucker (676767) | more than 6 years ago | (#22469578)

I thought that the reason for granting exclusive rights to the patent owner was that society would benefit from disclosure of the details of the invention (so the invention or discovery wouldn't remain a secret forever.)

But how many of the patents discussed in /. reveal anything in the patent application that any programmer or engineer couldn't figure out just by hearing the idea of the patent?

For example, are developers of web commerce sites going to look to the Amazon patent to see how to develop a one-click purchase procedure?

My idea is that a patent should not prevent anyone else from developing the same thing, as long as they don't use the detailed implementation described in the patent to do it.

How do you tell that? Keep the patent details a secret.

That is, if someone wants to know the implementation details of a patent (before it expires), they should have to submit an application. The details won't be publicly available.

Of course, this proposal would never be allowed in the real world, because companies want to use patents to prevent other companies from having the same ideas, no matter if they are trivial to implement or not.

Re:Proposed (radical) Patent Reform (1)

Opportunist (166417) | more than 6 years ago | (#22469748)

Quite the opposite. Make it public, but also make it illegal to implement it just this same way.

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 being issued for specific implementations. Right now, especially in the IT sector, we're getting patents that are no brainers (i.e. something anyone who ever ran into the problem could have come up in less than a day), worded widely enough to include half the known IT world (and about half of what isn't known yet) or a combination thereof.

Re:Proposed (radical) Patent Reform (1)

Anakron (899671) | more than 6 years ago | (#22469828)

My idea is that a patent should not prevent anyone else from developing the same thing
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.

Re:Proposed (radical) Patent Reform (1)

gnasher719 (869701) | more than 6 years ago | (#22469980)

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 system as it is by face value.

In the pharmaceutical industry, it would actually work. You find a cure for cancer - you patent it and all the patent says is "I found a cure for cancer". A competitor who was one week behind wouldn't be unfairly penalised anymore (that is one of the more ridiculous parts of the patent system in my opinion. Two inventors happen to have the same idea, and the one who is quicker gets it all. Why? This shouldn't be a lottery!). The fact that you found a cure doesn't give anything of your idea away.

In other areas, like "one-click-patent", that wouldn't work because disclosing the idea would be enough for anyone to copy out. But then maybe that is a good idea that it shouldn't be patent worthy. Like a cure for cancer is surely worth a patent, but if I just had the ingenious idea that when people have cancer, instead of letting them die, we just give them the right treatment and heal the illness - that shouldn't be patentable. And that kind of idea seems to be exactly what people get patents for.

Re:Proposed (radical) Patent Reform (1)

budgenator (254554) | more than 6 years ago | (#22469970)

The courts have nullified patents because they were so vague that "a person skilled in the arts" couldn't reproduce to "device"

I Dont Get It... (5, Informative)

vajrabum (688509) | more than 6 years ago | (#22469618)

I saw equipment at Recognition Equipment Inc. in 1982 or 1983 ago that did exactly that--scan checks and store the images. How can they have issued a patent on this.

Re:I Dont Get It... (4, Informative)

shiftless (410350) | more than 6 years ago | (#22470018)

[quote]I saw equipment at Recognition Equipment Inc. in 1982 or 1983 ago that did exactly that--scan checks and store the images. How can they have issued a patent on this.[/quote]

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 (4, Insightful)

Anonymous Coward | more than 6 years ago | (#22469638)

So in effect, the banks are stealing technology, asking Congress to litigate their loses, and now this Senator is front-man for a huge expenditure of _our_ money to bail them out?

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.

Why the slashbash is a shithole to discuss in. (0)

Anonymous Coward | more than 6 years ago | (#22469670)

In this case there is only one relevant questions:

1. Is there obvious prior art to this way of scanning cheques?

- If yes, then lawmakers could in this case grant extra speedy judicial review of whether that prior art is valid.

- If no, that means this way of scanning cheques is unique and has never been done before, and hence is patentable.

To discuss in the shithole of slashbash is to discuss whether someone who is perceived to be evil deserves to be in prison for having an evil mindset - you will find a lot of shit and no good or consistent arguments.

I predict that question not being asked in the first 50 comments to the summary, other than this one.

Think of what $1B at the USPTO would buy (1)

MikeRT (947531) | more than 6 years ago | (#22469684)

A better use for that money would be to hire people who have demonstrated strong work experience and education in technical fields. When he's up for retirement, a close relative of mine would be a great pick. He has experience in a number of very, very technical areas of Computer Science, and if you gave him a research staff to work under him, and good pay, he could easily rip patents like these to shreds. The problem is, the government would never pay an engineer with the depth of education and work experience that he has a salary commensurate with what he could bring to bear at an agency like the USPTO.

Nothing will change until two things happen: the government conforms to private sector at-will employment, and it stops being stingy with pay for qualified people. Then again, this is the same institution that will try to save money on the military by spending $1B on a stealth bomber, and then haggle over the salary of the pilots.

Re:Think of what $1B at the USPTO would buy (1)

winkydink (650484) | more than 6 years ago | (#22469870)

If your close relative is such a potential patent shredder, then why wouldn't he hire himself out for a $100-200 million now and destroy this patent on behalf of the banks? Don't you think the banks would pay that much right now?

Not sure who the bad guys are here - the banks? (4, Insightful)

Mr. Roadkill (731328) | more than 6 years ago | (#22469688)

If I understand correctly, Ballard claims to have developed these techniques and methods in the mid-90's, at a time when physical transfer of checks was required - federal law would not have allowed those methods at that time.

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?

Re:Not sure who the bad guys are here - the banks? (1)

ADRA (37398) | more than 6 years ago | (#22469792)

Oh my god, a comment that actually makes sense and doesn't pander to the lowest common Slashdot denominator? Give this person a cookie.

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? (1, Interesting)

Anonymous Coward | more than 6 years ago | (#22469820)

True - if the banks have implemented a valid patent, they should pay for it. Obviously they felt it was important enough to change their process to that method, meaning that it wasn't obvious to any of the banking staff before.

The issue at stake with the $1bn is the possibility that Ballard could simply refuse to license the cheques for any reasonable sum. I don't know how this method is even used or how integral a part it is to automated systems, but let's say he refused to sell it for any sum that was more than marginally below the cost of every banking branch in the country taking apart age-old machines.

The government has however the (much debated) right to 'eminent domain' - to force someone to sell something, for the greater good of the people, at a price they decide is fair. The issues there are wide, but consider e.g. someone discovers a cure to HIV and patents it - and wanted to charge $50m per dose. In that case his property rights would place that well within his rights, but eminent domain could have the government force him to give it away, because the cost to society of adhering to property rights in that specific instance is considered too heavy. In this case, if there is a massive cost and resource need to the entire banking system, and Ballard refuses any non-exuberant licensing terms, then eminent domain sounds like a possible way to go.

I wouldn't however object to eminent domain being used and then a one-off tax being levied on all the banks using the technology. That means less time spent by engineers switching out machines for no good reason when they could do things that really benefitted people.

Whose idea was this?! (2, Insightful)

erroneus (253617) | more than 6 years ago | (#22469728)

Was it the Banks' idea? Was it the patent troll's?

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 otherwise to the detriment of the public interest, that privilege should simply be REVOKED.

Re:Whose idea was this?! (1)

Carcass666 (539381) | more than 6 years ago | (#22469998)

From the 5th Amendment:

...nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use without just compensation.

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 administration's attempt to skirt the Constitution when it deems it convenient).

I Can See The Future... (3, Interesting)

GaryPatterson (852699) | more than 6 years ago | (#22469802)

... and it's not pretty.

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?

OMG (0)

Anonymous Coward | more than 6 years ago | (#22469808)

Why are stupid, greedy people in charge of the world?
Why can't the game assassin's creed be based off a true group?

Wait a minute... (1)

msauve (701917) | more than 6 years ago | (#22469816)

Patents are good for, what, 17-20 years. I have a hard time believing that banks weren't scanning at least some checks 20+ years ago (or photographing/microfilming them). How is this patent not invalidated by prior art (scanning) or obviousness (photograph/microfilm)?

prior art (1)

timmarhy (659436) | more than 6 years ago | (#22469834)

i'd say there's a fair bit of prior art for scanning and archiving something.

way to go though, take a broken system and suggest a worse alternative.

If you RTFA you would see (5, Informative)

WillRobinson (159226) | more than 6 years ago | (#22469838)

While I despise patent trolls, if you read the article this guy had a business with 150 people developing and selling this technology. SOME not all banks ripped him off, several of the large banks did license the technology. Others just ripped him off. To stay in business in 2001 he had to lay most of his people off, and sell most of the company.

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.

Re:If you RTFA you would see (2, Insightful)

Creepy Crawler (680178) | more than 6 years ago | (#22469886)

Fine. Tell me why it is novel?

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 ...SERVER!!!

Oh wait. Thats what many higher-tech lawyers do at their law firms, as do doctors with MR's, and other professional peoples.

Re:If you RTFA you would see (1)

WillRobinson (159226) | more than 6 years ago | (#22469938)

Guess you did not read the article, and this has already made it through the courts and been proven to be a novel idea (read no prior art).

Re:If you RTFA you would see (0)

Anonymous Coward | more than 6 years ago | (#22470056)

A bunch of lawyers and judges "proving" something to be novel is hardly going to convince a tech geek. It's time for patents to go, they are tools of oppression pure and simple.

This might be a Good Thing (1)

Wateshay (122749) | more than 6 years ago | (#22469860)

I'm all for patent change, but even if they pass it, it won't help this case.

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 heartbeat.

On the other hand, maybe a billion-dollar bailout will turn some heads and lead to some real reform down the road. This is $1B that our Congress-Critters can't spend on their own pet projects, and that's a language that they can all understand.

Re:This might be a Good Thing (1)

Lord Bitman (95493) | more than 6 years ago | (#22469922)

I think you're thinking of criminal law...

Cheque Processing Companies (1, Interesting)

Anonymous Coward | more than 6 years ago | (#22469868)

Wow. Even if they give the banks immunity, what would happen to those companies that provide cheque processing services to banks?? Or those such as NCR that actually provide the imaging equipment?? For instance, Fiserv Inc. operates over 50 centers worldwide doing item processing and archiving for upwards of 1700 client organisations. I worked for the Australian division which provides item processing and archiving services for 3 of the 4 largest banks here, and for one of those banks before we were outsourced. Banks here have been doing electronic exchange under the auspices of the Australian Payments Clearing Association since before I started in 2002. Trust me, they don't exactly need an increase in costs right now due to a patent troll.

Smells Fishy (1)

QuoteMstr (55051) | more than 6 years ago | (#22469872)

Has anyone checked out whether Sessions has any personal interest in this bill, or whether he might be getting a kickback?

What if the trolls don't want to settle? (0, Flamebait)

schwit1 (797399) | more than 6 years ago | (#22469888)

Can't they go to court and say the patent is worth more?

Publicity? (0)

Anonymous Coward | more than 6 years ago | (#22469916)

Can't find any mainstream press articles on this yet. If it were publicized heavily maybe could be a lightning rod for patent reform.

Shenanigans (1)

dmomo (256005) | more than 6 years ago | (#22470002)

Isn't there a "Triviality" clause in patent laws somewhere? This is something no one needs to invent. It's an obvious application of available technology.

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 Digitally,
      which is a trivial combination of Scanning and Archiving

What does that gray line that defines when something is an actual innovation look like?

Can't we just do the same thing and create a trivial extension to this patent?

Here, if anyone wants to get rich, steal this idea:

Patent Scanning and Archiving a Bank Check While Wearing Pants.

At least then, if you catch someone else using this innovation, you can sue their pants of.

this reeks (1)

CrazyJim1 (809850) | more than 6 years ago | (#22470010)

Slashdot, keep us posted on this. I want to see how my Senators vote on this bill. I would also like people to suggest letters to write their Senators that don't include insults. It isn't as easy as you'd think because patent reform can be complex depending on how you look at it.

What happened to the free market? (3, Insightful)

BlackSabbath (118110) | more than 6 years ago | (#22470078)

Great. Whatever happened to the party of the free market?

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.

Great Republican Ideas at work (0, Troll)

dkarma (985926) | more than 6 years ago | (#22470110)

Wow this is awesome! Yet another great idea by the political party that brought you:
Two endless wars, Failed Katrina Recovery (Great Job Brownie!), a bridge to nowhere, and Torture just to name a few.

IBM (3, Informative)

NullProg (70833) | more than 6 years ago | (#22470118)

IBM owns the bank check processing business (I did check payment programming for four years and have a 3lb MICR reader decorating my metallic file cabinet to prove it). I'm pretty sure IBM has a patent that covers this. If an IBM patent won't cover it then check with NCR (Bought by AT&T then released into the wild again as NCR).

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.

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