The U.S. Department of Justice has come to the aid of a Princeton, N.J., bank in its legal battle against the state of Florida.
The federal agency filed a brief last week supporting College Savings Bank's claim that Florida had infringed on the bank's patent and falsely advertised its competing college finance product.
College Savings Bank obtained a patent in 1988 for a method of funding certificates of deposit that prepay college tuition. In 1994, the privately held bank sued the Florida Prepaid Postsecondary Education Expense Board, a state agency that markets a product similar to the bank's CollegeSure CD.
In its brief, the Justice Department asked the U.S. District Court in Trenton, N.J., to deny Florida's motion to dismiss the bank's charges, saying the state had waived its immunity under the U.S. Constitution's 14th amendment. A hearing is scheduled Oct. 9.
"If states don't have to comply with federal statutes - especially those concerning patents - they're not accountable to anyone," said Peter A. Roberts, College Savings Bank's chief executive.
If Florida were successful in infringing on his patent, Mr. Roberts said, "it would be a license to steal for every state and its instrumentalities."
This year, a federal judge ruled against Florida Prepaid in its libel suit against Mr. Roberts. The state agency's claim arose from his vociferous criticism of its competing product.
The CollegeSure CD is College Savings' only product. The bank has 12,000 accounts and $95 million of deposits, Mr. Roberts said.
