First Union Corp. is the latest financial company to announce that it has bought a license from a California technology inventor that has successfully sued four companies, including AT&T Corp., for patent infringement.
The license, from Ronald A. Katz Technology Licensing LP in Los Angeles, covers call processing activities such as paying bills, transferring funds, activating credit cards, and creating or changing personal identification numbers. It also includes automated securities transactions such as purchasing, selling, or trading by phone, as well as customer service functions such as finding out the status of an order.
First Union would not discuss the matter. In a statement issued Wednesday it said the license will let it provide customers with "the latest forms of automated service in a fashion that is friendly and efficient."
Mr. Katz, who cofounded a check authorization company in 1961 and was later vice chairman of American Express Information Services Corp., said in an interview Wednesday that he holds 40 patents for technology used in interactive telephone systems and in accumulating and processing data. He estimated that about 2,000 companies use his technology. He has so far licensed 44 of them, including Marshall & Ilsley Corp., International Business Machines Corp., and MoneyGram Payment Systems Inc., he said.
Mr. Katz said the negotiations with First Union began after the November settlement of his 1997 suit against AT&T.
The suit claimed unlicensed use of Mr. Katz's technology. The settlement has not been disclosed, but an intellectual property expert has estimated that AT&T agreed to pay at least $100 million.
Mr. Katz said the settlement with AT&T and accompanying media attention have probably smoothed the way for negotiations with other companies. He confirmed that his company had approached First Union about purchasing a license, but he would not release details of the agreement, saying only that the bank was "fair minded."
He said discussions are under way with other financial service companies and that he expects to license some in the next couple of months.
He also said he hopes to avoid further lawsuits.
Mr. Katz had sued three other companies for patent infringement before AT&T. Two of the cases - against Omaha-based West Interactive Corp., a unit of West Teleservices, and MicroVoice Applications Inc., which provides electronic dating services - ended in settlements. Third case, against 900 Million Inc., a Los Angeles company using interactive call processing for a contest, resulted in an injunction against its further use of Mr. Katz's technology.
