Major Victory for Community Bank Clients against Aggressive Patent Threats

A group of New England community banks won a major victory Monday against an aggressive patent holder that has been filing patent infringement lawsuits against dozens of individual banks, claiming that they infringe patents covering ATMs that not only carry out banking services but also perform retail transactions on the internet.

In response to ongoing threats by Automated Transactions LLC, a group of New England banks banded together in 2012 to form a defense group to resist the unjustified threats. Patent litigator Bob Stier explained, “None of these ATMs can be used to buy airline tickets or send flowers, so my clients don’t need a license under the patents. But they’re still threatened with expensive patent litigation if they don’t pay. Unless they join together, it’s very, very expensive to stand up for their rights. Of course, Automated Transactions knows this, and until now, it has managed to intimidate more than 140 banks into settling.”

The situation changed Monday, however, when the Judicial Panel on Multidistrict Litigation, a special federal tribunal that oversees related lawsuits pending in different federal courts, granted a motion by community banks in Vermont, New Hampshire, and Massachusetts to consolidate their patent lawsuits with related cases already pending in Delaware. “This is a huge win for my clients,” said Stier. “So long as Automated Transactions could divide and conquer, banks were at a disadvantage. Today’s ruling is a game-changer because it unites the banks against their common enemy.” 

The lawsuits will now be heard by U.S. District Judge Sue Robinson, a Delaware jurist experienced with patent cases, who previously invalidated one of Automated Transactions’ basic patents. There are potentially 28 cases pending in 10 judicial districts that will be affected by this ruling.