Guard against BSA Patent-Infringement Suits

By Young, Jeffrey E.; Miller, Jennifer F. | American Banker, July 1, 2005 | Go to article overview

Guard against BSA Patent-Infringement Suits


Young, Jeffrey E., Miller, Jennifer F., American Banker


Imagine that your company has developed a computer program to help pinpoint transactions that must be reported under the Bank Secrecy Act, and that one day you receive a letter demanding you stop using the program because it infringes on a competitor's patent.

If this sounds unlikely, consider the level of patent activity in this field.

A recent search of the U.S. Patent and Trademark Office's Web site, www.uspto.gov, indicated that four issued patents and 33 published applications refer to either the Bank Secrecy Act or the Patriot Act. Twenty-nine patents and 95 published applications refer to the term "money-laundering," and 19 issued patents and 213 published applications refer to "homeland security."

Since 1998 methods of doing business and computer programs are patentable if they are new, not obvious to a person familiar with the field of technology, and have a "practical utility" -- that is, they produce a "useful, concrete, and tangible result."

The U.S. Postal Service, banks, investment firms, online trading networks, and money transferring agencies have recognized this potential to acquire intellectual property rights. They have moved quickly to seek protection for the business methods and software inventions conceived by their personnel.

These organizations have patented inventions in a wide range of technologies. Some of the methods and systems that are the subject of these issued patents or applications include:

*Detecting suspicious financial transactions.

*Using biometric profiles to help identify participants in financial transactions.

*Identifying latent relationships among independent data elements in very large databases, such as Fincen's, on suspicious-activity reports.

*Screening applicants against anti-terror databases in loan-processing systems.

If your company is subject to the Bank Secrecy Act or similar legislation, you should be aware of patent activity relating to compliance and ensure that your company does not wind up at the wrong end of a patent infringement action. Patent infringement actions involving business method patents are already showing up in the courts.

To protect your company, assess where patent barriers are located in your industry and find out who controls them. You can implement inexpensive online "watching" searches to provide warnings when particular competitors or known "patent predators" publish new patents or applications.

Train your personnel to know the basics of patent law and to keep the records needed to prove public activities that can invalidate a threatening patent or prove your company was actually entitled to the patent. You can also train them to watch for patent notices on competitor materials and for news of patents in trade publications. …

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Guard against BSA Patent-Infringement Suits
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