To the Editor:

Several points in the Jan. 31 article "Checkfree Suit Raises Worry that Patents Will Stifle Home Banking" (page 19) need to be clarified or corrected.

First, the "stumbling block" syndrome. It is a favorite phrase of those opposed to patents in the banking industry. But there are many industries in which patents are not stumbling blocks.

If a patent holder denies use of an important technology to the industry, then the patent is likely to be a stumbling block. But if the patent holder agrees to license the technology to others, the terms of that license may or may not be an impediment.

Many companies pay licensing fees to take advantage of valuable technology. In these cases, modest licensing fees enable rather than inhibit the industry.

For the record, my company, Online Resources, stated when it announced its patent in August 1993 that we intend to license our process and will ask only modest licensing fees.

Second, the suit brought by Citibank against Online Resources does not involve Online's process patent. Citibank claims Online's ScreenPhone violates three of the bank's more than 40 patents.

Online has countersued, saying it does not violate the patents. We also requested the court to rule that Citibank's patents are invalid in view of "prior art."

That is the totality of the suit. No ruling in this case can have any impact on Online's process patent, because it is not an issue in the suit.

Third, your article was the first I have seen in which anyone charged that Online's patent covered automated teller machine transactions. Online's process patent clearly doesn't cover ATMs, because they preceded Online's patent.

Online has never made claims about its process patent vis-a-vis ATMs, and never will. On the contrary, Online has said that one of Citibank's patents is for an ATM and may cover most ATMs in use across the country.

The so-called Glaser patent, issued 16 years ago and one of the patents Citibank has asserted in the suit against Online, may expose all manufacturers of modern ATMs to claims by Citibank.

And let me clarify one more point: Online Resources provides interactive financial services. This includes transaction processing, data communications links, on-premises customer service software, home banking, bill payment and investment service applications, marketing support, network management, merchant services, fulfillment, and billing services, as well as ScreenPhones. We also recently announced voice response and personal computer interfaces.

To describe our company as a maker or manufacturer of screen telephones is like saying Visa makes plastic cards. The ScreenPhone is only part of what Online offers, and this should be taken into account when defining Online's business. Gene Riechers Senior VP, Online Resources and Communications Corp. McLean, Va.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.