A Partnership in Patents -- and Litigation
Wade, Will, American Banker
When William Randle left Huntington Bancshares Inc. in 2001, he took with him four patents covering various electronic payment technologies.
Since then he has tried to persuade several major banks to license those patents, but to no avail. Now he has joined forces with a company that has emerged in recent years as an aggressive player in the patent litigation field.
DataTreasury Corp., a Melville, N.Y., company that offers transaction processing and archiving software, is perhaps better known for its legal successes. It claims that its patents are crucial elements of check image exchange systems. It has numerous infringement lawsuits pending against banking companies and technology vendors, and has won some significant licensing deals after filing suits.
Mr. Randle said that he was in no position to mount court battles, but that DataTreasury was already doing so. The net effect of his February sale of the four patents to DataTreasury was to outsource their enforcement, he said.
"Having a patent is one thing, but being able to enforce them is something altogether different," he said Thursday.
A suit DataTreasury filed Feb. 24 in U.S. District Court for the Eastern District of Texas accuses 56 banks, bank holding companies, providers of check image-exchange services, and other technology vendors of infringing on the four patents.
These include Bank of America Corp., Wells Fargo & Co., Wachovia Corp., SunTrust Banks Inc., and First Horizon National Corp. "We don't believe there is any validity to the allegations against Wells Fargo, and we plan to vigorously defend ourselves," wrote Julia S. Tunis, a spokeswoman for that company, in an e-mail. Representatives for the other banking companies either did not return calls or said they could not discuss the suit.
Neither DataTreasury nor Mr. Randle would say how much he got for the patents, but the deal gave him a seat on the company's board.
Ed Hohn, a lawyer with Nix, Patterson & Roach LLP of Daingerfield, Tex., is DataTreasury's lead attorney. He declined to say whether Mr. Randle would share in any settlement payments or licensing revenue, but he added: "What's good for DataTreasury will also be good for Bill."
Mr. Randle said that in the past few years he had offered licensing deals for his patented technologies to several major banking companies. "They came back and said, 'We're not going to do it -- not going to license them,' " he said.
As a small-business owner he felt unprepared to initiate a patent-infringement suit. "It takes a great deal of resources to engage them in a process that would end in licensing," he said.
But DataTreasury, already engaged in litigation on similar issues with many of the same companies, was in an ideal position to do so, he said.
Other small patent holders may be drawn to DataTreasury for the same reason, Mr. Randle said. "The mission of DataTreasury is to license patents" and derive value from them, he said. …