Within hours of the Senate’s passage of the Leahy-Smith America Invents Act (“the Act”), DataTreasury filed a new infringement suit in the U.S. District Court for the Eastern District of Texas against dozens of defendants in the financial services industries. DataTreasury has asserted its “Ballard Patents,” U.S. Patent Nos. 5,910,988 (“the ’988 Patent”) and 6,032,137 (“the ’137 Patent”), in 17 cases since 2002 alleging infringement by more than 150 providers of image-based check processing. According to the Complaint, the Ballard Patents are among the most valuable U.S. Patents as evidence by the fact that the leading twenty-five banks in the country have “collectively paid more than $350 million to license the Ballard patents.”

The timing of the new lawsuit’s filing by DataTreasury is not likely coincidental. The Act contains a specific provision requiring the Director of the USPTO to within one year establish a transitional post-grant review proceeding to review the validity of issued business method patents used in the financial services industry.22 Congress envisions that this proceeding will be similar to the new Chapter 32 proceedings set forth in the Act; however, the nine-month post-grant period limitation will not apply to business method patent reviews when requested by a party who has been sued for, or charged with, infringement of the patent. The regulations establishing the transitional review will remain in effect for eight years after implementation. Parties to civil actions may request a litigation stay during the pendency of a transitional review, with the courts having wide discretion to grant the stay based on the status of the case. While the Act does not specifically mention DataTreasury, it is widely believed that Congress added the business method review at the bequest of banks sued by DataTreasury.23 Importantly, the Act clearly points out that nothing in the Act establishing the transitional review limits the categories of patent eligible subject matter in 35 U.S.C. § 101.