DataTreasury, located in Plano, Texas, United States, develops, acquires and licenses technology for secure check image capture and storage. As of 2010 the company had 2 employees, about 1000 shareholders and had generated over $350 million in licensing revenue in the previous four years.[1][2]

The company has a patent portfolio relating to these technologies which it enforces. Several banks have settled, and in 2010 U.S. Bank, Viewpointe (a company set up by some major banks and I.B.M. to store and retrieve digital images of checks for large banks[3]) Clearing House Payments Company and its subsidiary, SVPCo, were found guilty of infringing DataTreasury’s patents.[4][5]

There has been controversy concerning the company. In 2004, The New York Times characterized DataTreasury as “a company whose only business, other than one client, appears to be suing other companies.”[3] The banking industry has accused DataTreasury’s lawyers of patent trolling and DataTreasury themselves of abusing the patent system by buying the patents they are enforcing.[6] The US Senate version of the Patent Reform Act of 2007 (which was never enacted) contained an amendment, lobbied for by banks, tailored to protect banks from DataTreasury infringement litigation.[6] On the other hand, in 2010, just after DataTreasury won their first lawsuit, Claudio Ballard, who founded the company, was named inventor of the year.[7]

Company foundation and early years

Claudio Ballard founded DataTreasury in 1998 in Melville, New York, to market technology that processes electronic checks and other documents and related payment-processing tools utilizing patents prosecuted and filed prior to DataTreasury’s founding.[8][9] Patents were issued in 1999 and 2000.[10]

According to Ballard, DataTreasury had as many as 100 employees but almost went out of business in late 2001.[6]

In 2002, DataTreasury licensed their first imaging system, eImageVault, to Bank Hapoalim of Israel.[11]

According to a 2010 article in the Minneapolis Star Tribune, DataTreasury said that in its early days, “DataTreasury discussed a joint venture with Chase Manhattan Bank, now known as J.P. Morgan Chase. But according to the company, J.P. Morgan Chase instead helped start up competitors, Small Value Payments Co. (SVPCO) and Viewpointe Archive Services, which now process most of the nation’s checks.”[4]

Patent infringement suits

Ballard patents

In 2002, DataTreasury sued 56 banks and other companies, including JPMorgan Chase and First Data,[12] for infringing the Ballard patents.[13]

In 2003, the U.S. Congress passed the Check Clearing for the 21st Century Act, known as “Check 21”. The act allows banks to take digital images of checks, exchange those images with other banks, and destroy the original paper copies.

By December 2004, two companies that DataTreasury had sued had settled.[3] Affiliated Computer Services, a large information technology supplier, paid $50,000, and the RDM Corporation, a small Canadian company that sells hardware and software for payment processing, agreed to “pay a fee for each check imaging terminal it deploys and ‘a per-click royalty for storage of electronic documents and check information, calculated at around a 50 percent royalty rate,'” according to a DataTreasury press release reported by The New York Times.[3] In mid-2005 JPMorgan Chase settled their suit.[13][14][15] The pending suits were put on hold pending the outcome of a reexamination of the patents (see below), but after the USPTO confirmed the validity of the patents, the cases moved forward.[13]

The company relocated to Plano, Texas, in October, 2005.[16]

In November 2005, First Data filed a request for a reexamination of the DataTreasury Ballard patents citing numerous earlier publications that it claimed either anticipated the DataTreasury inventions or made them obvious. In 2007, the USPTO upheld both patents and further allowed DataTreasury to claim additional inventions that were disclosed but not claimed in the original applications.[17]

In August 2006, Merrill Lynch and DataTreasury settled their suit.[18]

In 2007, the United States Senate version of the Patent Reform Act of 2007 (S. 1145) moved forward with an amendment to Section 14 of the Act, supported by a number of financial services companies, which would prevent DataTreasury from collecting damages on the patents.[6] However, the Congressional Budget Office (CBO) predicted that if such a provision were passed, owners of check-processing patents (such as DataTreasury) would sue the federal government, arguing that their property had been unlawfully seized. The CBO estimated that the suit would have a high likelihood of success and that the government’s liability from this lawsuit could reach $1 billion, to cover royalties of 5 cents per check, over the remaining life of the patents.[13][19]

On March 26, 2010, a jury found that U.S. Bank, Viewpointe, and Clearing House Payments Company and its subsidiary, SVPCo, were guilty of infringing DataTreasury’s patents.[20][5][21] The jury entered a decision $26.6 million in damages and found that the infringement was willful. Because of the willful infringement finding, the trial judge doubled the damages.[21]

WMR e-Pin patents

In February 2006, DataTreasury purchased four patents from WMR e-Pin, LLC. These patents were U.S. Patent 5,265,007, U.S. Patent 5,583,759, U.S. Patent 5,717,868, and U.S. Patent 5,930,778.

On February 24, 2006, DataTreasury filed an infringement suit with respect to these patents against 30 banks and other companies in the United States District Court for the Eastern District of Texas.[4][22][23]


The following banks and corporations have settled their lawsuits with DataTreasury and/or taken a license.[24][25]

  • Affiliated Computer Services
  • Bank of New York Mellon Corp
  • Bank One
  • Citibank
  • City National Corporation[25]
  • Community Banking Systems
  • Compass Bancshares Inc.[25]
  • Diebold
  • First Data
  • First Tennessee Bank
  • Groupe Ingenico[26]
  • Groupe Ingenico
  • JP Morgan Chase
  • Mellon Bank[25]
  • Merrill Lynch
  • NCR
  • NetDeposit
  • PNC Financial Services[27]
  • RDM Corp

Other litigation

In April 2011, Ted Doukas sued DataTreasury claiming that he was a financial backer of Claudio Ballard when Ballard was working on the image capture technology and was therefore entitled to one half of the proceeds from the invention. The total amount sought was $15 billion.[28] Doukas’ claim was dismissed against DataTreasury (and its officers and directors) in May 2013. The case is currently pending appeal.[29]


Former congressman Steve Bartlett, president of the Financial Services Roundtable, said that DataTreasury’s lawsuits are “an example of what’s wrong with patent law.”[6] Stephen Boyd, a spokesman for Senator Jeff Sessions who supported an amendment to shift the potential liability from the banks to taxpayers, characterized the company’s lawyers as patent trolls.[6] DataTreasury has stated that Ballard is the inventor of the system and built the company to sell it before the banks stole the idea and nearly destroyed his business.[6]


  1. ^Joe Mullin for The Prior Art. April 05, 2010 Patent Litigation Weekly: DataTreasury Wins First Patent Trial, Against U.S. Bank
  2. ^Jeff Bounds for the Dallas Business Journal, April 25, 2010. $27M win for DataTreasury in big case
  3. ^ Jump up to:ab c d Kingson, Jennifer A. (2004-12-25). “Small Company Is Specializing in Suing Banks”. The New York Times. Retrieved 2008-09-08.
  4. ^ Jump up to:ab c Dan Browning for the Minneapolis StarTribune February 24, 2010. Banking dispute involving U.S. Bank is going to 3 trials Archived 2010-03-30 at the Wayback Machine
  5. ^ Jump up to:ab Robin R. Richardson and DD Turner for, March 26, 2010. Banks lose patent suit: DataTreasury awarded $26.6M
  6. ^ Jump up to:ab c d e f g Jeffrey H. Birnbaum for The Washington Post, February 14, 2008. Lawmakers Move to Grant Banks Immunity Against Patent Lawsuit
  7. ^S. Business and Industry Council press release, October 05, 2010. DataTreasury Founder Claudio Ballard Named 2010 “Inventor of the Year” by U.S. Business and Industry Council
  8. ^US 6032137
  9. ^US 5910988
  10. ^DataTreasury “About Us” web page
  11. ^Staff, Technology Marketing Corporation, January 30, 2002 Data Treasury Signs Agreement With Israel-Based Bank
  12. ^Robin Sidell for The Wall Street Journal. December 14, 2004 J.P. Morgan Is Sued Over Patents For Check-Processing Technology
  13. ^ Jump up to:abc d Lisa Lerer, Senate, old legal woes drawn into patent fight, The Politico, March 25, 2008.
  14. ^DataTreasury press release, July 6, 2005 JPMorgan Chase and DataTreasury Corporation Settle Landmark Patent-Infringement Litigation; Bank Licenses DataTreasury’s Check-processing Technology
  15. ^United States District Court for the Eastern District of Texas
  16. ^DataTreasury Press Release, February 17, 2006 DataTreasury Shifts HQ to Texas
  17. ^Staff, Digital Transactions. Oct. 30, 2007. Other Shoe Drops As USPTO Affirms Second DataTreasury Patent
  18. ^Steve BIlls. August 15, 2006. Merrill Lynch Signs With DataTreasury American Banker 171(156):18
  19. ^Congressional Budget Office Cost Report, pages 2, 5 and 11
  20. ^“”Banking dispute involving U.S. Bank is going to 3 trials”Minneapolis Star Tribune, February 24, 2010”. Archived from the original on March 30, 2010. Retrieved March 15, 2010.
  21. ^ Jump up to:abJim Hammerand for the Minneapolis / St. Paul Business Journal/ September 28, 2010 U.S. Bank ordered to pay $53 million in check imaging lawsuit
  22. ^Patently-O. Apr 17, 2008 Arbitration Agreement Does Not Encumber Patent
  23. ^Jeremiah Armstrong for Mondaq. June 20, 2008. United States: That Check Won’t Clear—Patent Assignee Not Bound By Assignor’s Arbitration Agreement
  24. ^DataTreasury Press Release index[permanent dead link]
  25. ^ Jump up to:abc d Staff, Digital Transaction News, September 9, 2008 “Latest DataTreasury Settlements Add to Pressure on Defendants”
  26. ^United States District Court for the Eastern District of Texas
  27. ^United States District Court for the Eastern District of Texas
  28. ^Andrew Smith, “Investor sues Nassau DA Kathleen Rice, seeks $370M”, Newsday, October 29, 2011
  29. ^“Gregory Zeller, “Doukas Case Dismissed”, Long Island Business News, May 24-30, 2013″ (PDF). Archived from the original (PDF)on 2016-03-04. Retrieved 2013-06-30.

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