Sessions Backs Off Immunity Plan

Posted by Mark Brousseau

Interesting article from the Washington Post on the latest developments on a congressional proposal that would give banks immunity from the DataTreasury patent infringement lawsuit:

Immunity Plan for Banks Loses Backer
Billions of Dollars at Stake Over Patent

By Jeffrey H. Birnbaum
Washington Post Staff Writer
Saturday, April 12, 2008; D03

Sen. Jeff Sessions (R-Ala.) has withdrawn his support for legislation he had written that could save the nation's banks billions of dollars by granting them immunity from a lawsuit accusing them of infringing a check-processing patent.

Sessions's about-face reduces the odds that the measure, which has been advocated by banking interests, will become law this year.

Sessions announced his decision in a letter last week to Senate Judiciary Committee Chairman Patrick J. Leahy (D-Vt.). In the letter, he noted that the U.S. Patent and Trademark Office said his amendment to a larger bill could affect more patented check technologies than originally thought and might undercut U.S. patent-protection efforts with trading partners.

"I wanted you to be aware of these developments," Sessions wrote to Leahy.

The Sessions amendment was adopted without dissent by the committee in July. It would prevent a small Texas company, DataTreasury, from collecting damages from banks for infringing on its patented method for digitally scanning, sending and archiving checks. The patents were upheld last summer by the Patent and Trademark Office after they were challenged.

Although the amendment would not invalidate DataTreasury's patents, it would spare the banks from having to pay for infringing them should the courts decide that was warranted. If DataTreasury collected a royalty of just a couple of cents per check, the amount would run into billions of dollars.

Under the amendment, the government would have to pay $1 billion to DataTreasury over 10 years as compensation for taking the company's property, according to estimates by the Congressional Budget Office.

The Sessions amendment is part of a patent-overhaul bill that stalled in the Senate this week. A senior committee aide said the outlook for the amendment is uncertain.