DataTreasury Corp. has announced another patent licensing agreement, with the automated teller machine company NCR Corp.
The Melville, N.Y., item processing and archiving software vendor has claimed its patents are a crucial element of check image exchange systems, and has filed several infringement suits against major banking and technology companies.
DataTreasury has struck licensing deals with some of these companies, but the NCR agreement, announced Monday, is the first one that also includes a cross-licensing deal, giving DataTreasury access to NCR’s patent portfolio.
Ed Hohn, a lawyer with Nix, Patterson & Roach LLP of Daingerfield, Tex., and DataTreasury’s lead attorney, said the settlement also involves a “substantial” cash payment to DataTreasury, payable in “several weeks.”
“NCR needs some time to put the money together,” he said.
John Hourigan, NCR’s director of corporate communications, said by e-mail that the company does not comment on settlements.
The case was filed last February in the U.S. District Court for the Eastern District of Texas, and the two companies reached the settlement last Thursday, just before DataTreasury was to begin deposing NCR executives as part of the discovery phase of the case.
Rod Cooper, a lawyer with Cooper Law Firm of Dallas and DataTreasury’s patent counsel, said that DataTreasury could use NCR’s patents to expand DataTreasury’s archiving software, Global Repository Platform. For example, it could incorporate NCR’s biometric and signature-capture technology.
Mr. Hohn said the NCR technology “opens the door for” using electronic transactions within the repository software as well, especially automated clearing house payments.
Alenka Grealish, the manager of the banking group at the Boston research and consulting firm Celent Communications LLC, said the cross-licensing deal could prove a big advantage to DataTreasury. “NCR is a leader in in-house archiving,” she said. “Most big banks with image archives are using NCR software.”
NCR’s technology is especially good at image compression and ATM capture, Ms. Grealish said. “There are all kinds of things” that DataTreasury “could add value to,” she said. “I can see how there would be a lot of complementary technologies.”
In November the French point of sale terminal maker Ingenico Group signed a licensing agreement with DataTreasury, and Community Banking Systems Ltd., a Dallas imaging vendor, did so in October. Its most high-profile legal settlements have been with JPMorgan Chase & Co., last July, and with Zions Bancorp. in June.
Several suits are still pending. Mr. Hohn said trials are to begin in July against the Denver payment processor First Data Corp. and in October against the Carson, Calif., card-reader vendor MagTek Inc. and The Clearing House Payments Co. LLC. The Clearing House’s SVPCO unit operates a check image exchange network.
Robert Hunt, a senior analyst for the market researcher TowerGroup of Needham, Mass., a unit of MasterCard International, said the string of settlements does not guarantee other companies would be willing to settle. But it does suggest that DataTreasury has a strong argument, he said.
“Just because nine other companies might have settled, the 10th can still challenge the patents,” Mr. Hunt said. “But it obviously raises the question of why the nine settled if they didn’t think the patent was enforceable. I don’t think an industry leader like NCR would agree to a deal if they didn’t think that DataTreasury had a strong case.”
Ms. Grealish said that DataTreasury’s legal strategy has yielded some significant short-term revenue from the settlements, but she questioned the company’s long-term ability to sell its software. “The industry doesn’t like them,” she said. “I don’t know what DataTreasury will be able to sell to banks after burning them.
