DataTreasury Corporation v. NCR Corp.

Case Overview and Background

This litigation was a key part of a large-scale patent assertion campaign by DataTreasury Corporation, a Plano, Texas-based company, against the U.S. banking and financial services industry. DataTreasury, widely regarded as a patent assertion entity (PAE) or "patent troll," was founded in 1998 by Claudio Ballard and holds patents related to digital check imaging and storage. The company's business model appears to center on licensing and enforcing this patent portfolio, having launched a sweeping litigation campaign in 2002 against dozens of banks and technology providers. The defendant, NCR Corp., is a major, long-standing technology company that provides hardware and software for the financial and retail industries, including check processing systems, self-service kiosks, and point-of-sale terminals.

The lawsuit accused NCR's check imaging hardware and related software systems of infringing two DataTreasury patents: U.S. Patent No. 5,910,988 and U.S. Patent No. 6,032,137. Both patents are titled "Remote image capture with centralized processing and storage" and generally describe systems and methods for capturing images of documents (like checks) at remote locations, transmitting the data to a central facility for processing, and archiving the images. This technology became foundational for modern electronic check processing, particularly after the passage of the "Check Clearing for the 21st Century Act" (Check 21), which facilitated the use of digital check images. DataTreasury alleged that NCR's systems, used by many banks, incorporated this patented technology without a license.

The case was filed in the U.S. District Court for the Eastern District of Texas, a venue notoriously popular for patent plaintiffs during this era. The district was known for its fast docket, plaintiff-friendly local patent rules, and a reputation for juries that favored patent holders, which collectively created pressure on defendants to settle. This litigation is notable as an early and highly successful PAE campaign that ultimately extracted over $350 million in licensing fees and settlements from the financial industry. The campaign had a significant impact, forcing major institutions like JPMorgan Chase, U.S. Bank, and Bank of America to either take licenses or face costly litigation. The DataTreasury v. NCR case, which settled in January 2006 for an undisclosed fee and a license agreement, was one of many victories that solidified DataTreasury's controversial but impactful role in the evolution of digital banking.

Legal Developments and Outcome

This litigation was an early battle in DataTreasury Corporation's sweeping, multi-year patent enforcement campaign against the U.S. banking and financial services industry over its check processing patents. The case against technology provider NCR Corp. was filed in the U.S. District Court for the Eastern District of Texas, a venue known for handling a high volume of patent cases. The dispute was resolved through a settlement less than a year after its inception, positioning NCR as one of the earlier defendants to license the technology.

2005-02-17: Filing of Complaint
DataTreasury Corporation filed a patent infringement lawsuit against NCR Corp. in the Eastern District of Texas (Case 2:05-cv-00073). The complaint alleged that NCR's products and services, particularly those related to check imaging and processing, infringed upon U.S. Patent No. 5,910,988, titled "Remote image capture with centralized processing and storage," and U.S. Patent No. 6,032,137, which shares the same title. This case was one of numerous similar suits filed by DataTreasury against various banks and technology vendors around this period.

While the specific complaint document is not available through public web searches, the basis of the litigation campaign was that DataTreasury's patents covered the fundamental technology for digital check imaging and clearing, which became widespread after the passage of the "Check 21 Act" in 2003.

2005: Initial Pleadings and Broader Litigation Context
Following the complaint, NCR would have filed an answer, likely denying infringement and asserting invalidity of the patents. These specific documents are not publicly available via web search. During this period, DataTreasury was engaged in litigation against dozens of other entities, including major banks like JPMorgan Chase and Bank of America. The court system in the Eastern District of Texas often consolidated such related cases for pre-trial matters like claim construction. A ruling in October 2005 noted that defendants in the broader DataTreasury litigation had failed in their attempts to transfer the cases out of the Eastern District of Texas.

2005-11-25: Parallel Re-examination Proceeding
While the NCR case was pending, a third party, First Data Corporation (another defendant in a separate DataTreasury suit), petitioned the U.S. Patent and Trademark Office for an ex-parte re-examination of the '988 patent. This action represented an attempt to invalidate the patent at the agency level, a common tactic for defendants in patent litigation. However, the NCR case settled before this re-examination had a substantial impact on its proceedings.

2006-01-23: Settlement and Licensing Agreement
DataTreasury and NCR announced that they had settled the lawsuit. The terms of the settlement were confidential but included a licensing agreement allowing NCR to use DataTreasury's patented technology. This resolution came relatively quickly, less than a year after the complaint was filed and before the case proceeded to any significant litigation milestones such as a Markman hearing or trial.

A later court filing in a separate but related case between JPMorgan Chase and DataTreasury revealed the financial terms of the NCR license. According to a 2016 Fifth Circuit opinion concerning a "most-favored licensee" clause in JPMorgan's settlement, DataTreasury granted NCR a license in January 2006 for $2.85 million.

Final Outcome
The case concluded with a settlement and dismissal in January 2006. NCR became a licensee to the patents-in-suit, avoiding the risk of a potentially costly trial and injunction. DataTreasury, represented by the firm Nix Patterson, secured another license in its extensive and highly successful litigation campaign, which ultimately recovered more than $350 million from the banking industry. Cases against other defendants, such as U.S. Bank, would later proceed to trial, resulting in significant jury verdicts finding willful infringement. No parallel PTAB proceedings involving NCR as a petitioner have been identified.

Counsel for Plaintiff DataTreasury Corporation

DataTreasury assembled a multi-firm legal team, drawing heavily on prominent Texas-based patent litigators known for representing plaintiffs in the Eastern District of Texas.

• Rodney A. "Rod" Key / Role: Lead Counsel

  • Firm: Nix, Patterson & Roach, LLP (at the time of litigation)
  • Office: Daingerfield, Texas
  • Note: Key was a prominent attorney at Nix Patterson, a firm that served as chief counsel for DataTreasury's sweeping patent enforcement campaign, recovering over $350 million for the company across numerous lawsuits.

• Nelson J. Roach / Role: Lead Trial Counsel

  • Firm: Nix, Patterson & Roach, LLP (at the time of litigation)
  • Office: Daingerfield, Texas
  • Note: Roach served as lead trial lawyer for DataTreasury in major cases, including a successful trial against U.S. Bank that resulted in a $54 million jury verdict for willful infringement.

• Bradley C. Beekman / Role: Of Counsel

  • Firm: Nix, Patterson & Roach, LLP (at the time of litigation)
  • Office: Daingerfield, Texas
  • Note: Beekman was part of the core Nix Patterson team that litigated a portfolio of more than 50 patent infringement cases for DataTreasury.

• Eric M. Albritton / Role: Local Counsel

  • Firm: Albritton Law Firm
  • Office: Longview, Texas
  • Note: A seasoned East Texas trial lawyer, Albritton has extensive experience representing both patent holders and accused infringers in the district.

• T. John Ward, Jr. / Role: Local Counsel

  • Firm: Ward & Smith Law Firm (at the time of litigation)
  • Office: Longview, Texas
  • Note: As the son of influential EDTX Judge T. John Ward, he has been involved as local counsel in numerous significant patent cases in the district.

Counsel for Defendant: NCR Corp.

NCR Corp. assembled a formidable legal team to defend against DataTreasury's patent infringement claims, engaging the nationally recognized intellectual property firm Irell & Manella as lead counsel, supported by experienced local counsel from several Texas-based firms.

Lead Counsel

• Name: Morgan Chu

  • Role: Lead Counsel
  • Firm: Irell & Manella LLP (Los Angeles, CA)
  • Note: A nationally renowned trial lawyer, Chu has secured some of the largest patent verdicts and settlements in U.S. history and was named "The Outstanding Intellectual Property Lawyer" in the United States by Chambers in 2006.

• Name: David I. Gindler

  • Role: Lead Counsel
  • Firm: Irell & Manella LLP (Los Angeles, CA)
  • Note: Gindler is a highly-regarded patent litigator with a focus on complex and high-stakes technology and life sciences cases, who has achieved numerous successful trial outcomes for both plaintiffs and defendants.

• Name: Keith Orso

  • Role: Of Counsel
  • Firm: Irell & Manella LLP (Los Angeles, CA)
  • Note: Orso is a partner at Irell & Manella specializing in intellectual property litigation. While his specific role in this case is not detailed in available records, he was part of the core Irell team representing NCR.

• Name: Rachel M. Capoccia

  • Role: Of Counsel
  • Firm: Irell & Manella LLP (Los Angeles, CA)
  • Note: Capoccia's involvement is noted in litigation databases alongside the other Irell & Manella attorneys, indicating she was part of the defense team.

Local Counsel

• Name: S. Calvin Capshaw

  • Role: Local Counsel
  • Firm: Brown McCarroll, LLP (Longview, TX) at the time of filing; later a founding partner of Capshaw Derieux, LLP.
  • Note: A seasoned East Texas litigator with extensive experience in federal court, Capshaw has frequently served as local counsel in high-profile patent cases in the district.

• Name: Elizabeth L. "Betty" DeRieux

  • Role: Local Counsel
  • Firm: Brown McCarroll, LLP (Longview, TX) at the time of filing; later a founding partner of Capshaw Derieux, LLP.
  • Note: DeRieux has a broad federal practice in the Eastern District of Texas, including significant experience in intellectual property litigation and as a former judicial clerk in the district.

• Name: Brian T. Hoyle

  • Role: Local Counsel
  • Firm: Brown McCarroll, LLP (Longview, TX)
  • Note: During the litigation, Hoyle was a partner at Brown McCarroll representing clients in civil litigation; he was later appointed as a Justice on the Texas Twelfth Court of Appeals in August 2006.

• Name: Scott F. Partridge

  • Role: Local Counsel
  • Firm: Baker Botts LLP (Houston, TX)
  • Note: Partridge has a national reputation for handling complex commercial and high-risk litigation. While at Baker Botts, he would have provided significant Texas-based trial experience to the defense team.