Datatreasury Corporation v. Small Value Payments Company

Filing 58

MOTION for Leave to File Excess Pages by Datatreasury Corporation. (Attachments: # 1 Text of Proposed Order PO to Exceed Pg Limit# 2 Exhibit EX A# 3 Exhibit EX B# 4 Exhibit EX C# 5 Exhibit EX D# 6 Exhibit EX E)(Cooper, Rodney) Main Document; Reply Brief On Claims Construction Regarding Consolidated Defendants added on 3/15/2006 (added by Clerk due to computer problems and system wouldn't accept pleading)(mpv, ). Modified on 3/15/2006 (mpv, ).

Datatreasury Corporation v. Small Value Payments Company

Doc. 58 Att. 4

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION DATATREASURY CORP., Plaintiff, vs. MAGTEK, INC., a/k/a MAG-TEK, INC., and SMALL VALUE PAYMENTS COMPANY, Defendants, ) ) ) ) ) ) ) )

JURY TRIAL DEMAND CV No.: 2-O3CV-459 CV No.: 2:04-CV-85

DECLARATION OF DR. DONALD MULLINEAUX 1. My name is Donald Mullineaux. I am over the age of twenty-one, have not been

convicted of a crime involving moral turpitude, and am not otherwise disqualified from making this declaration. The following information, which is within my personal knowledge, is true and correct. 2. In connection with preparing this declaration, I have reviewed, the `988 and `137

patents, portions of their respective file histories, and relevant banking materials. 3. All of the opinions provided in this declaration are: a. b. and methods; c. My opinions expressed herein constitute a reliable application of those principles and methods to the facts of this case; and Based upon sufficient facts and data to allow me to reach the My opinions expressed herein are the product of reliable principles

opinions contained in this declaration;

Dockets.Justia.com

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d. `137 patents. 4.

My opinions expressed herein are based upon information of a type

reasonably relied upon by experts in the arts applicable and analogous to the `988 and

I submit this declaration in rebuttal to Defendants' position that the `988 patent

does not cover checks. 5. By my education, training, and experience, as evidenced by my curriculum vitae

(attached to this declaration as Exhibit A), I am qualified to provide testimony on the understanding of persons of ordinary skill in the art relative to banking transactions and checks in the context of the `988 and `137 patents. 6. I am a finance professor at the University of Kentucky, where I hold the DuPont

Chair in Banking and Financial Services. I received my Ph D. in Economics from Boston College in 1971 and worked initially for 13 years at the Federal Reserve Bank of Philadelphia. From 1979-84, I served there as Senior Vice President and Director of Research. I joined the faculty of the Gatton College of Business at U.K. in 1984 and have been teaching courses in Bank Management at the undergraduate, MBA, and Ph.D. levels routinely since that time. I have also served on the faculty of 4 of the 6 graduate schools of banking in the United States and presently serve as Curriculum Director for the American Bankers Association's Stonier Graduate School of Banking. I have published research papers in many areas, including the evolution of the payments system in the United States in the 19th century. I routinely cover payments systems issues in my courses and lectures, which requires that I keep current with developments in this area. 7. I understand that the claim terms should not be determined solely from the claim

language alone, but that the broader context of the entire patent should be considered. Consequently, I reviewed the claims, specification, file histories to understand what type of documents could be utilized in any one of the claims in the `988 patent and `137 patent. As a person of ordinary skill in banking practices having specific knowledge in

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check payments and processing, I would understand that the `988 patent includes the remote capture of a check, which is type of document. 8. My opinions are the following: a. It is self-evident that a check is a "document" in the context of the claims of `988 and `137, since any check meets the basic dictionary definition (American Heritage, 2004) of a document as "a writing that contains information" or a "written or printed paper that bears the original, official legal form of something and can be used to furnish decisive evidence or information." I agree with these definitions and would rely on them, as would other experts in the banking field, as an accurate depiction of what constitutes a document. Indeed, an internet search under the phrase "definition of a check" produces the following result from Legaldefinitions.com: A check is "a document signed by the maker, drawn on a bank, payable on demand" (emphasis added). This definition captures the economic essence of a check from an information perspective in that a check is an order from Party X to pay Party Y from an account at Bank Z. b. That banks and their vendors view checks as documents is supported by the fact that advertisements for check scanners commonly address the number of "documents" that can be scanned within some given time frame. That a check is a document from a regulatory and legal perspective is supported by The Check Clearing for the 21st Century Act which refers to a "substitute check" as an, "Image Replacement Document." If legislators and bank regulators view a "substitute check" as a document, then surely the original check is itself a document, since each contains precisely the same information. The same argument applies to an "electronic check." c. The `988 and `137 patents state clearly in the "Field of the Invention" discussions that the invention operates on "data" and more specifically the retrieval, encryption, transmission, processing and storage of data. But "data" is simply factual information. The `Background Discussion" of `988 specifically refers to "banking transactions" (Column 1, Line 19) and "consumer purchases" (Column 1, line 21). Any person working in finance and banking and reading the `988 patent would recognize that a large portion of these referenced transactions would involve the use of checks. While the "Background Discussion" makes references to "receipts," it does so in a variety of

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contexts, and only a portion of these can be construed to involve checks. But as I noted above, checks can serve a receipt function only because they contain data and information, and this logically supports the facts that makes a check a document.

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DECLARATION In accordance with 28 U.S.C. § 1746, I, Donald Mullineaux, Ph. D., declare under penalty of perjury under the laws of the United States that the foregoing declaration is true and correct. Executed on the 14th of March, 2006.

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PERSONALRESUME NAME: ADDRESS: Mullineaux, DonaldJ. Ga tto nColleseof Business Economics and U n i v e rs i ty Kentucky of L e x i n g to nKentucky 40506-003 , 4 [phone] (Home) (8 5 9 )257-2890(University) ( 8 s 9 )2s7-9688 (Fax) mullinea@BqpJkLgd! Bom July 11,1945;U.S.Citizen

Ex A

TELEPHONE:

E-MAIL: CIVIL STATUS: EDUCATION: '

Graduated 1971from BostonCollege in with a Ph.D.in Economics. N a ti o n a lScience Foundation Trainee, 1967-71 R e c e i v e d Bachelor Arts Degree Economics a of in from St.Vincent College 1967. in

PROF ESS ION A LEXPERIENCE: University of Kentucky,Lexington,Kentucky 1999-Present D i re c to rof the School Manasement of University of Kentucky, Lexington,Kentucky 1984-Present Chairholder, The duPontEndowedChair in Banking and F i n a n c iaServices l University of Kentucky,Lexington,Kentucky 1990-93 Associate Deanfor Academic Affairs FederaReserve l Bank of Philadelphia, Philadelphia, Pennsylvania 1971-84 Senior Vice President DirectorofResearch and WhartonSchool, Universityof Pennsylvania, Philadelphia, PA 1916-80 in Taughtcourses the MBA programon FinancialStructureandPublic
Policy and in Macroeconomics T e m p l e University, Philadelphia,Pennsylvania

1975-'76

Taueht MBA cours Financial on Markets

of G r a d u a tSchool BankingMadison, e Wisconsin

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1981-Present

Lecture senior bank managers on the relevance of changing economic and

financial trendsfor sfategicplanning decisions. Graduate School ofBanking at LSU, BatonRouge, Louisiana 1 9 8 81998 CourseCoordinatorand Lecturerin Money andCapital Markets Stonier Graduate SchoolofBanking,Newark,Delaware 1990-Present Lectureon AdvancedMoney andCapitalMarkets Graduate School Bankingat Colorado, of Boulder,Colorado 1990-Present Lectureon Bank Investments Asset-Liability Management and Kentucky Schoolof Banking Louisville, Kentucky 1984-Present ProgramDirector and Lectureron Assefliability Management KentuckySchool Banking Louisville,Kentucky of 1987-Present Deanof the Facultv NationalBank Director Training School Lecturedirectorson principlesofbank managernent directordutiesandresponsibilities and UNIVERSIT Y SERVICE: 19991998-2000 1997-98 1997-99 1996-97 1996-9'7 1995-96 1995-96 1995 1994-96 1995GattonCollegeOperatingCommittee UK FuturesCommittee University StrategicPlanningCommittee Studies(Reedy University TaskForceon Research Graduate and Committee) MB A PolicyCommittee Chair, Merit ReviewAppealsCommittee C o l l e g e Business Economics of Committee and Strategic Planning HonoraryDegreeCommittee Chair, Search Committeefor Economics Chair Department AreaCommittee Promotion Tenure(SocialSciences) Academic for and AreaCoordinator Finance

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1994-96 t994-9s 1990-93 1991-92 1991-94 r99t-92 1990-91 1990-91 1990-91 1989-90 1988-89 1988-89 1987-91 r987-88 1986-87 1985-87 1985-87 1985-86 1984-8s 1984-85

U n i v e rs i tySenate Finance Deparhnent Chair Deanfor Academic Associate Affairs LexingtonCampus Research Advisory Committee In te l l e c tu aProperty l Committee KentuckyEducationalReformAct Committee Merit ReviewAppealsCommittee(Chair) MBA ProgramReview Committee University Self-StudyCommittee(University Finances) AreaCommittee Promotion Tenure(Social and C h a i rma nAcademic , for Sciences) AcademicArea Committeefor PromotionandTenure(Social Sciences) R e s e a rcProfessorship h Selection Committee Deparhnent Chairman FacultyGrantAwards Committee D B A PolicyCommittee AreaCommittee Promotion Tenure(SocialSciences) Academic for and D B A Program Coordinator Chairman, Committeefor MS Degreein Banking C h a i rma nMBA PolicyCommittee , C h a i rma nDepartment Economics , of ReviewCommittee

GRANTS: Prochnow Education Foundation Grant,1988.

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Financial Services Roundtable, 1999.

COURSESTAUGHT: Bank Managonent Money andCapitalMarkets Seminarin FinancialInstihrtions Macroeconomics IntemetEconomics

AWARDS: Distinguish eAlumnusAward,St. VincentCollege,1995. d OutstandinTeacher theCollege, g in BetaGamma Sigrna, 1990. UniqueAchievernent Award, FederalReserve Bank of Philadelphia,1983 DOCTORA L DISSERTATIONSCHAIRED: Rosernary Carlson,"Shareholder WealthEffects andChanges Interstate in Banking Regulation s ,I"988(Morehead State University). Jeong Park,"Testsof RealEstate J. 1989(Yeungnam Investment TrustsasInflationHedges," University, Korea). "Monitoring, Contractual DiannaPreece, Flexibility, andthe CapitalMarket Response Loanto Agreernent Announcements," (University Louisville). I 990 of GregoryFilbeck, "RegulatoryMonitoring andthe knpact of Bank Holding CompanyDividend Changes Equity Returns,"I 990 (University of Toledo). on "A JohnThompson, Multiple-Metric Studyof the Retumsto Shareholders: The Caseof Bank HoldingCompany Mergers,"1990(Eastern KentuckyUniversity). "The CapitalMarketResponse BankHoldingCompany Patricia Webster, Spinoffs,"1991 to (Bradley University). YouguoLiang,"StockPrices, Volume,andMarketOverreaction," 1991.(Prudential). ShellyWebb,"Ownership Structure Firm Valuefor Financially and Distressed Firms," 1993. (XavierUniversity).

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"AgencyCosts LoanSales: Steve Dennis, in 1993. (CalifomiaState TheoryandEvidence," University, Fullerton). "The LendingBehavior GlobalBanks: Relative Comparison U.S.vs. of ChiaPin Chen, of A Non-U.S. Banks,"1994 (National ChungHsingUniversity, Taiwan). "The Impactof theFederal MichaelSchinski, Doctrineon Bank Reserve's of Source Strength EquityReturns," 1994 (SLINYat Geneseo). MarwanAsri, "The Impactof Financial in Liberalization Savings Investment Indonesia," on and 1997(Gadja MahdaUniversity, Indonesia). AloysiusRo, "The Private-Placement Decision: EmpiricalAnalysis,"1998(Merrill Debt An Lynch). "An EmpiricalExamination theRoleof Covenaflts LargeBankLoans"2000 JohnPaglia, in of (Pepperdine University). Sang 2000(Bryant Wih Lee,"The SizeandComposition BankLendingSyndicates," of College). "Commercial-Bank ChienChih Peng, An LoanCommitments SpotLoans: Analysisof vs. BorrowerChoice," KentuckyUniversity). 2000(Eastern "Essays the Underwriting Ivan Roten, HoldingCompanies," on Activitiesof Commercial-Bank 2001(Appalachian State University). Ha-ChinYi, "Are Bank Loan RatingsRelevant?" 2002,(Southwest TexasStateUniversity). MONOGRAPHS: Balance-Sheet Decisionsat Relatively Unregulated Banks:New YorkFree Banking, 1843-62. Herbert Prochnow V. Education Foundation, 1990. GeneraBanking,I/.TheAmerican l Bankers Association, 1990. REF EREE D PAPERS: "Liquidity, LabelsandMedium-Term Notes,"FinancialMarkets, and Institutions, Instruments (forthcoming,with Ivan Roten). "DebtUnderwriting Commercial Bank-Affiliated Banks:More by FirmsandInvestment Evrdence,Journalof BankingandFinance16(2002):679-718 " (with Ivan Roten).

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"Syndicated Dennis). Journalof FinancialIntermediation (2000):404-26(with Steve Loans," 9 "AgencyCostsandDividendPayments: Case BankHoldingCompanies," The of Quarterly Review Economics Finance39 (1999):408-19(with GregFilbeck). of and "Monitoring, Loan Renegotiability,andFirm Value: The Role of Lending SyndicaIes," Journal (with DiannaPreece). of BankingandFinance20 (1996)'.577-93 "lnsider Trading andRegulation:A Look at Bank Holding Companies.," Journal of Economics 7l-84 (withGregFilbeck). a n dFinance (1995): 19 "T he Impactof theFederal Reserve's Source Strength of Policyon BankingHolding Companie s ,Quarterly " Review Economics Finance35 (1995):483-96(joint with Michael of and Schinski). "A Multiple-MetricStudyof theReturns Shmeholders: Case BankHoldingCompany to The of Mergas,"Journalof FinancialandStrategic Decrsions (1995):43-51(oint with John 8 Thompson). "Monitoring by FinancialInstitutions:Bank vs. Nonbanks,"/oarnal of Financial Services Research (1994):l9l-2OO(loint with DiannaPreece). 8 "Overreactj oandReverse n Anticipation: Two Related Puzzles," Journalof FinancialResearch 17 (1994):31-43 fioint with YouguoLiang). "RegulatoryMonitoring andthe Impactof Bank Holding CompanyDividend Changes Equity on (7993):403-15(oint with GregFilbeck). Retums," .Flnan Review cial "Are REITsInflationHedges?" (1990):91-101 Journalof RealEstate FinanceandEconomics (oint with Y.J. ParkandI.K. Chew). "T he JointProduction ofConfidence: Commercial Endogenous Regulation l9s Century and BankClearinghouses," Journalof Money,Credit,andBanking(Novernber 457-68(oint 1987): with GaryGorton). "Competitive Southen Moniesandthe SuffolkBank System: Contractual A Percpective," (1987): E c o n o m iJournal53 c 884-98. "InflationExpectations MoneyGrowthin theUnitedStates," Review and lzerican Economic (1980):149-61. "Unernplo y me nIndustrial t, Production, InflationUncertainty: and Some EmpiricalResults," (1980):163-69. Review Economics Statisttcs of and "On Testingfor Rationality: AnotherLook at theLivingston PriceExpectations DaIa,"Journal of PoliticalEconomy (1978). 86

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"Economies Scale Organizational of Approach," and Efficiencyin Banking: Profit-Function A J o u r n a of Finance (1978):259-80. l 33 "Branching 49 Restrictions Commercial-Bank and Costs," JournalofBusiness (1976):402-07. "Economies Institutions," Economics (1975):2331 ofScaleat Financial Journalof Monetary 40. "DeposilRa teCeilingsandNoncompetitive Biddingfor Credit,andBanking5 (197\:2All2. OTHERPAPERS: "CommercialBanking," TheNew PalgraveDictionary of Moneyand Finance. StocklonPress, 1992. "Expectations, Bill Surprises, Treasury Rates: and 1960-82: Discussion," "/ournal Finance oJ (Papers Proceedings, and 1984):696-98. "Monetary Rulesand Contracts: Reviewof the Federal Why Theory Losesto Practice,"Business Reserve Bank of Philadelphia, November/De,cemb 1984. er,, "RevealingReal InterestRates:Let the Market Do lt," Business Reviewof theFederalReserve Bankof Philadelphia, (with Aris Protopapadakis). March/April1984 "Efficient Markets,InterestRates,andMonetary of Policy," Business iRevrew the Federal Reserve Bankof Philadelphia, May/June 1981. "On Active andPassive MonetaryPolicies:What HaveWe Learnedfrom the Rational Expectatio nDebate?"Business s Review the Federal of Reserve Bankof Philadelphia, November/Decernb 1979. er 'Regrrlatio nWhence CameandWhether Hereto : It It's Review the Federal of Stay,"Business Reserve Bankof Philadelphia, September/October, 1978. "InflationExpectations theU.S.:A Brief Anatomy,"Business in Review theFederal of Reserve Bankof Philadelphia, 1977. July/August "MoneyGrowth,Jobs,andExpectations: Business Doesa Little Learning Ruin Everything?" Review theFederal of Reserve BankofPhiladelphia, 1976. January/February "An Economic Approach FamilySize:A New Perspective Population Growth,".Bzslzess to on Review theFederal of BankofPhiladelphia. Reserve Januarv/Februarv 1976. Bills," JournaloJMoney, U.S.Treasury

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"The Taxman Income of Rebuffed: Taxesat Commercial Review the Federal Banks,".Busrzess Reserve Bankof Philadelphia, May 1974. "Unit vs. BranchBanking: Analysisof Relative An Pennsylvania's Costs,"in Changing Branching 1973. Laws:An Economic Analysis,Fedaal Reserve BankofPhiladelphia, "The Economic Review the Federal of Folkloreof PartyPolitics:Mythsor Realities?"Business Reserve BankofPhiladelphia, November 1973. "Interest-Ra tCeilingsandtheTreasury-Bill e Market:Disintermediation the SmallSaver," and NewEngland Review, Economic July/August 1973. "Paying for Social Security:Is It Time to Retirethe Payroll Tax?" Business Reviewof the F ederaReserve l BankofPhildelphia, April 1973. "Inflation Insurance: EscalatorClausefor Securities," An Business Reviewof rheFederal Reserve BankofPhiladelphia, October 1912. "Stock-MarketCommissionFees:Competitionor Bust----or Busted?" Business Reviewof the Be FederaReserve l BankofPhiladelphia, April 1972. WORKINGPAPERS: "Private Placements Public Debt: An Analysis of Firm FundingSourceDecisions:(with vs. AloysiusRo). "Financial Covenants Bank Loan Contracts"(with in (with AgusHaq'oto). "Equity Underwritingby Bank Holding Companies Investment and Banks:An Analysisof (with Ivan Roten). RelativePerformance" "Is Therea Safety-Net Some Evidance Based Non-Bank on Entryinto Banking." Subsidy?: "The SizeandComposition Commercial of (with Sang Lee). LendingSyndicates" PROFESS ION A LASSOCIATIONS: American Economic Associatron American Finance Association F inanciaManasement l Association JohnPaglia).

"The Impactof the Transformation Banking on CEO andBoard of Director Compensation" of

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European Finance Association Southem Finance Associ ation Eastern Finance Association KentuckyEconomics Association

PROF.ESSIONAL ACTIVITIESI BoardofDirectors,Eastem Association, Finance 1996-98. FinanciaInstitutions l 1991. TrackChair,Financial Meetings, Management Association presenter discussant professional Frequent and at meetings; havereviewedpapersfor: American Economic Review Journal of Political Economy Reviewof Economics and Statistics Journal of Finance Journal of MonetaryEconomics Journal of Money,Credit, and Banking Journal of theAmericanStatisticalAssociation Reviewof EconomicStudies Journal of Financial Research F inan c i a lReview Economic Journal I Sou thrn Economi Journa e c Journal of BankingandFinance F inan c i a l Services Review PROGRAM SF'ORBANKERS (DOMESTIC): "BankTax Management" "Prospectfor Financial s Reform" "Asset/Liability Management Techniques" "T he Intemational DebtProblem" "Regulation /D e re g u l a ti oWhereTo FromHere?" n: "What'sWrongwith Economic Policymaking theUnitedStates?" in "FederaDeficits: How Big A Problem?" l "Strategic Plaruring Economic and Policy'' "TrustActivitiesat Commercial Banks: An Overview" "F inancialMarketOutlookfor the 1990s" "The European MonetarySystem" "Managing Investment the Portfolio" "Risk Management TheoryandPractice" in "The Futureof Bankins"

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"Determinants Bank Shareholder of Value" "The Transformation theFinancial of Systan" "Risk Management: or Fundamental?" Fad PROGRAM SF'ORBANKERS (INTERNATIONAL): Academic Director,54frInternational BankingSummer School, Jolla,Califomiq 2001. La Lctures BankManagement on Techniques, Vienna, Austria,Summer 1988,1989,1990,and 1993. Lectureson Bank Management, Zagreb,Croatia,April, 1992,December 1992,Septanber, , 1 9 9 3andJuly,1994. , 1992. SeminaLeader Bank Simulation r for Program, Nemetria Institute, Foligno,Italy, October, Serninaon Asset-Liability r Bancaria, Management, InstitutoMexicano Administracion de MexicoCity, January, 1993. Seminaon Financial r Markets, MexicoCity, June,1993. Lectures Academy Management, to of 1993. Almaty,Kazakhstan, September, SeminaLeader Bank Simulation r for Analysis, Vladivostock, Russia, November,7994 and HbaraskRussia February, , in 1995. SeminaLeader Stanford r for BankManagement Program, Vilnius, Lithuania,1995. Simulation SeminaLeader Bank Simulation r for Analysis, 1996. Panama City, Panama, Seminain Principles BankManagement, r of Foligno,Italy, 1997,7998, Nemetria Institute, 1999.

PUBLIC AND OTHER SERVICE: Vice Chairman,Committeeon Business, Labor and the Economy,KentuckyTomorrow C o m m i s s i o,n1985-86. BoardMember, Lexington Philharmonic Orchestra,986-87. I BoardMernber, FirstNationalBank,Louisa,Kentucky,1988-94. Boardof Directors, Education The Network,1987-1991.

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TV of Investments Seminar Leader, KentuckyTelebanking Network. (Satellite Distribution Programm i n g ),989-9 1 l. T EAM Lexington, Mayor'sCommittee ImproveEfficiencyin LocalGovemment, 1994. to DonorChoiceCommittee, UnitedWay of Lexington,1994. Mayor'sCommission Competitiveness, on 1996. NationalScience Foundation Reviewer, 1990,1994,1998,1999. (20-30annually). groups F requenspeaker meetings t at ofprofessional associations business and