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J.P. Morgan Settles Patent Suit Over Check-Imaging Process; Victor DataTreasury Grants The Bank License for Usage; Accord Had Been Explored
 
Wall Street Journal (7.07.05)

By Robin Sidel

J.P. Morgan Chase & Co., putting an end to another piece of nagging litigation, settled a patent-infringement lawsuit filed by a small New York firm that accused the big bank of using its technology to capture images of checks and store them electronically.

In settling the matter, J.P. Morgan, the nation's third-largest bank, acknowledged that it infringed on patents obtained by DataTreasury Corp., a Melville, N.Y.-based company founded by Claudio Ballard, a longtime computer dabbler. Mr. Ballard contended that J.P. Morgan was using technology contained in two of his patents that were pending when DataTreasury explored a potential partnership with the bank in 1998. Those discussions ended without an agreement and Mr. Ballard ultimately received the patents in 1999 and 2000.

DataTreasury later sued J.P. Morgan and other financial institutions in the Texarkana division of U.S. District Court for the Eastern District of Texas. The settlement covers claims made by DataTreasury against Bank One last year, and Viewpointe Archives Services. J.P. Morgan, which together with Bank One processed five-billion checks last year, is one of several companies that own Viewpointe, one of the nation's biggest check-archiving companies. DataTreasury still has litigation pending against other financial institutions.
Financial terms of the settlement weren't disclosed, but DataTreasury granted a license to J.P. Morgan to use the patents.
In a statement, J.P. Morgan said: "Given the uncertainty of litigation and the three years of legal efforts invested, we concluded that it was in the best interest of the business to settle this case."

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