Settlement with NCR Positions DataTreasury to Move into ACH and Cards

With its settlement today with NCR Corp., DataTreasury Corp. will be able to tap technology that will allow it to move beyond check processing and into technology supporting automated clearing house and card transactions, the company's lead counsel says. The small Melville, N.Y. technology company, which had sued NCR early last year for patent infringement, says today's settlement agreement with the maker of ATMs, check scanners, and other equipment includes access to a wide array of NCR technology patents covering such areas as biometrics and signature capture. This technology will dovetail with work DataTreasury has had underway but could not fully develop because of NCR's patents, the company's lawyers say. “This opens the door for DataTreasury,” says Ed Hohn, a partner at Nix, Patterson, & Roach and lead counsel for DataTreasury. “DataTreasury will expand its position from purely checks to the ACH, debit, and credit card arena.” Hohn refuses to be more specific about DataTreasury's plans outside of the check business, saying such talk is “premature.” It isn't clear how many of NCR's 2,800 patents are now available to DataTreasury. Dayton, Ohio-based NCR is the latest of a string of defendants sued by 7-year-old DataTreasury for patent infringement over the past several years to settle with the company (Digital Transactions News, Nov. 11, 2005). This settlement, however, is the first in which plaintiff and defendant are exchanging technology, with NCR paying an undisclosed sum to DataTreasury and gaining use of the company's two patents, which were issued in 1999 and 2000 and cover the imaging, centralized processing, and electronic storage of documents. Up to now, DataTreasury has targeted software vendors, networks, and banks that have been building systems to take advantage of Check 21, the federal law that has largely cleared the way for the exchange among banks of check images rather than paper checks. Remaining defendants in DataTreasury's pending suits include vendors First Data Corp., SVPCO, Viewpointe Archive Services LLC, and MagTek Inc., as well as Citigroup Inc., Bank of America Corp., Wachovia Co., and Wells Fargo Co.