DataTreasury Wins Crucial Phase of High-Dollar ``Check 21'' Case; Judge Again Rules Firmly Against Defendants Accused of Patent Infringement.

MELVILLE, N.Y. -- DataTreasury Corporation today announced its most important victory to date in the landmark legal battle it is waging against one of the nation's largest financial institutions, several major data-processing companies and a number of other corporate defendants, all of whom are accused of infringing DataTreasury's patents. (Denoted as U.S. Patent No. 5,910,988 and U.S. Patent No. 6,032,137, these patents cover, among other things, technology used to capture, process, store and transmit digital images of checks, financial transactions and other documents.) On Monday, February 28, 2005, Judge David J. Folsom of the Texarkana Division of the U.S. District Court for the Eastern District of Texas -- a court familiar with patent litigation -- released his final decision and order after a crucial series of claim construction hearings. Known in the patent-litigation world as a "Markman" order, this ruling is the product of nearly two years' worth of courtroom analysis, and it determines the scope of the property rights covered by DataTreasury's patents. In issuing this order, the Court has recognized the full scope of the claim terms envisioned by DataTreasury, verifying the patents' value and upholding the work undertaken by the U.S. Patent and Trademark Office before it issued them. It is a giant step forward for DataTreasury and the roughly 400 investors who have chosen to support the company in its quest for justice.

This legal victory is particularly important given the recent passage of the Check Clearing for the 21st Century Act. Popularly known as "Check 21," this law allows financial institutions to exchange digital images of checks rather than the original paper copies, and, according to a recent article about DataTreasury's case in The Wall Street Journal, it "is expected to result in big savings for banks." (J.P. Morgan Is Sued Over Patents For Check-Processing Technology, The Wall Street Journal, December 14, 2004, http://webreprints.djreprints.com/1160431404627.html.)

"DataTreasury and its founder, Claudio Ballard, are receiving some long-overdue justice," said Ed Hohn, DataTreasury's lead attorney and a partner of the law firm Nix, Patterson & Roach, LLP. (Mr. Hohn and Nix, Patterson & Roach were cited in the February 21, 2005, issue of the National Law Journal for winning a clergy-molestation case which resulted in one of the 50 largest jury verdicts of 2004.) "These defendants have profited from the unauthorized use of DataTreasury's patented technology, and they stand to profit more now that Check 21 has gone into effect. Should any company infringing these patents fail to recognize DataTreasury's intellectual property, it can expect swift and certain litigation."

"The Court's latest ruling validates our position that the DataTreasury patents are extremely valuable and infringed by the various defendants," added DataTreasury's patent counsel, Rod Cooper of the Dallas-based Cooper Law Firm.

This case is expected to go to trial, based upon a court briefing made to all parties, sometime during either the third or fourth quarter of 2005.

Last year, DataTreasury announced victories in similar lawsuits against Ontario-based RDM Corp. and Dallas-based Affiliated Computer Services (ACS). The RDM settlement allowed the company to obtain a nonexclusive worldwide license for the use of DataTreasury's technology. ACS agreed to a permanent injunction barring that company's use of DataTreasury's patented technology. The permanent injunction against ACS also expressly recites that the electronic archive project, part of a joint venture between J.P. Morgan Chase and ACS, was covered by the DataTreasury patents.

A privately owned company, DataTreasury was formed in 1998 and is built around its patents covering its "Global Repository Platform," the world's most functional and secure informational management system. DataTreasury was issued the patents in 1999 and 2000 for image capture, centralized processing and electronic storage of document and check information, and DataTreasury has many other pending patent applications surrounding this system. The patents granted in the United States have also issued in Australia, Egypt, Mexico, Malaysia, New Zealand, the Philippines, Pakistan, the Russian Federation, Singapore and Taiwan, and the patents are pending in other nations. DataTreasury's London-based solicitors will soon begin enforcing the international patents and making worldwide licenses available.

For a copy of the court order, please contact [e-mail]