Online Resources' Home Banking Patent Hits Hot Buttons throughout Industry

By Fickenscher, Lisa | American Banker, February 17, 1994 | Go to article overview

Online Resources' Home Banking Patent Hits Hot Buttons throughout Industry


Fickenscher, Lisa, American Banker


Online Resources and Communications Corp., a supplier of home banking devices, has been getting far more attentioin than it bargained for.

Though Online is one of the more successful manufactuers of telephones enhanced with data screens, the inordinate degree of attention stems from a patent it was granted last June.

That action caused an uproar in electronic banking and patent-law circles. The critics say that Online should not have been able to get a patent on a payment process - a patent that could result in its collecting royalties on certain types of consumer-initiated payments.

Online's patent, No. 5220501, is one of several to raise questions about the applicability of the patent system to new computer and communications technologies.

Online may not have the visibility of Compton's New Media, a division of Tribune Co., which was granted a similarly contro-versial patent last August that is now being reviewed by the U.S. Patent and Trademark Office.

But Online's case has created some nervousness among bankers who see a future in home-based systems, and has attracted its share of challengers.

All of this has Online's president, Matthew P. Lawlor, vigorously defending his coup.

NationsBank Supplier

Mr. Lawlor, 45, a former consumer banking executive at Chemical Bank in New York, co-founded Online Resources in 1989, shortly after earning an MBA from Harvard and serving a one-year appointment with the White House Office of Management and Budget.

The company, based in McLean, Va., has supplied the screen telephones for Nations-Bank's home banking program in the Washington-Maryland-Virginia area.

"We fully expected there would be challenges from day one," said Mr. Lawlor. "Bascially, we spent a lot of time and money very early on, when a lot of people were not thinking about this stuff."

So far, the opponents have been meeting behind closed doors, plotting how to respond in the arcane terms of patent law. Like boxers, the two sides are circling cautiously, gauging each other's strength before throwing a punch.

Patent experts and people familiar with Online's product say that nothing less than a good fight can be expected - once someone makes the first move.

Since June 15, when the patent was issued, Online's opponents have have been talking to each other. Some have formed alliance with the intent of taking Online on in force. Others have merely consulted their own attorneys to determine if they are in danger of infringing the patent.

One source - among many ho asked to remain anonymous for this article - said, "There are a lot of folks in the industry, from third-party procesors to ATM networks and banks, who are investigating how their own systems are affected by the patent and how they can prove that it is invalid.

"Quite a few of us are waiting for Online to identify someone who is violating its patent, because that will test the issue of whether it is valid."

Wide Scope

The patent appears to cover any home banking transaction or purchase of goods and services that debits a customer's bank account through a home terminal such as a personal computer, television, or screen-based telephone.

Online has the exclusive right to process a request for immediate payment for a product or service ordered from any home terminal using a personal identification code.

As in the NationsBank program, the process utilizes an automated teller machine network. The customer's account is debited immediately, and Online is responsible for paying the merchant or servicer on behalf of the customer.

Home users can check their balances, transfer funds, pay bills from a list of merchants, and review previous payments.

According to the Patent and Trademark Office, others had previously explored the use of an ATM network in connection with bill paying - a fact that can bolster claims that the patent is not original. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Online Resources' Home Banking Patent Hits Hot Buttons throughout Industry
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.