The banking technology vendor NetDeposit Inc. plans to announce today that it has received two patents covering aspects of check-image processing.
The unit of Zions Bancorp. in Salt Lake City also said it has additional applications pending in the U.S. Patent and Trademark Office.
Danne Buchanan, NetDeposit's chief executive, said the company plans to develop "a portfolio of intellectual property" protecting its technological innovations regarding digital check imaging capabilities.
"We want to provide broad intellectual property protection for our customers," he said in an interview last week. "Anybody else's customers are on their own."
The $48.6 billion-asset Zions has long been a technological innovator. It was an early mover in online identity using public key encryption, and it sold that business, Digital Signature Trust, in January 2004 to a company now known as IdenTrust Inc.
Zions began exploring the potential of digital check images years before the Check Clearing for the 21st Century Act took effect in 2004, which made such images legally acceptable as substitutes for the original paper checks.
And through NetDeposit, Zions was the first banking company to license patents held by DataTreasury Corp. in Plano, Tex., a small payment processor that has sued more than 60 banks and other companies, claiming broad patent rights covering the encrypted transmission and long-term storage of check images.
(A patent examiner overturned DataTreasury's patent claims in December in a re-examination, setting the stage for their eventual revocation, though an expected appeals process could last for years.)
Mr. Buchanan said that the NetDeposit patents focus on the role of an online service bureau, or application service provider, "where a processor may be running a service that is not a bank of first deposit."
NetDeposit said its first patent covers a method of deposit processing at a central system for checks deposited at a remote site with accompanying deposit information.
The second patent covers processing, at a central site, deposits that are received from remote image capture sites.
Zions and NetDeposit have not decided whether it would be willing to license the two patents to other vendors that also operate image-processing service bureaus, Mr. Buchanan said.
"We're bankers by trade," he said. "We'll take our time to see what we want to do and how we want to do it," he said.
The U.S. Supreme Court, in a decision issued in April, tightened the standard for issuing patents, ruling that "advances that would occur in the ordinary course without real innovation" should not qualify for special protection.
Mr. Buchanan said he endorsed that decision.
"What you don't want is bad patents getting approved for bad intellectual property," Mr. Buchanan said.
