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Patent Lawsuits To Be Consolidated
WILMINGTON, Del. (4/4/13)--The Judicial Panel on Multidistrict Litigation has ruled to consolidate eight ATM patent infringement lawsuits filed against financial institutions and small businesses brought by a single patent holder, Automated Transactions LLC (ATL).

Monday's decision rejected ATL's request to keep the cases separate, and is seen as a blow to ATL. The cases will be consolidated before Judge Sue Robinson of the U.S. District Court for the District of Delaware, who has previously ruled one of ATL's patents is invalid.

ATL, which says it owns 13 ATM patents, has sent demand letters to a number of financial institutions, including credit unions and community banks, as well as small businesses in a number of states. The letters offer a license to its patents and threaten litigation if an agreement is not reached.

ATL lost similar litigation last year against IYG Holding Co., the major shareholder of 7-Eleven, when a Federal Circuit Appeals Court ruled 7-Eleven did not infringe ATL's patents and that seven of the 13 patents were invalid because they claimed technology that is not patentable.

The Credit Union National Association is "aware of ATL's demands against ATM owners, including credit unions and other small financial institutions, and is actively monitoring these cases," said Robin Cook, CUNA's assistant general counsel for special projects.

The cases being transferred involve five banks in Delaware, Massachusetts and New Hampshire, and two Vermont credit unions, but the panel noted as many as 28 actions with potential tag-along actions in 10 other districts could become involved.

The two Vermont credit unions--New England FCU, a $916 million asset credit union based in Williston, and Heritage Family FCU, with $335 million assets in Rutland--support the motion to transfer their cases, said the panel's transfer order.

In transferring the cases, the panel disagreed with ATL's arguments that the cases had too few common elements because defendants use a variety of ATMs. The panel noted the potential actions and tag along actions, and said "centralization will allow a single judge to preside over discovery relating to the 13 related patents at issue and should aid the consistent construction of the patents' claims."

The eight actions address "common questions of fact," the panel said. Also, consolidation would be convenient for parties and witnesses, and "promote the just and efficient conduct of the litigation."

Institutions whose cases were consolidated include IYG Holding Co., Trustco Bank (Delaware), Southbridge Savings Bank (Massachusetts), Mascoma Savings Bank (New Hampshire) and Northfield Savings Bank (Vermont).


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