7 June 2013Patents

Intellectual Ventures targets JP Morgan Chase in patent suit

Intellectual Ventures (IV), a so-called non-practising entity (NPE), has sued financial services company JP Morgan Chase for patent infringement.

The lawsuit, filed on June 4 in the US Court for the Southern District of New York, targets five patents, some of which cover online banking and the processing of credit card information.

The suit was filed on the same day as a separate (but different) complaint against Fifth Third Bank and one week after IV filed complaints against banking organisations PNC and First National Bank of Omaha.

“We have attempted to engage in licensing discussions with each of these companies, but our efforts to do a business deal have not been successful,” an IV statement said.

IV, which says it has earned more than $3 billion from licensing patents, is regarded as an NPE, typically a term for companies that acquire patents to license or litigate them. In the complaint against JP Morgan Chase, IV says it creates inventions using a staff of scientists and engineers “who develop ideas in a broad range of fields”.

According to the suit, the patents allegedly infringed by JP Morgan Chase are called: “Security Infrastructure For Electronic Transactions”; “High Resolution Access Control”; “Firewall System And Method Via Feedback From Broad-Scope Monitoring For Intrusion Detection”; “System for Controlling Access and Distribution of Digital Property”; and “Crypto Engine For Cryptographic Proceeding of Data”.

Sources of the alleged infringement include the Chase Paymentech system and the Zip system that relates to the PCI Data Security Standard, an information technology standard for organisations handling cardholder information.

IV wants damages, unspecified amounts of pre and post-judgment interest and any other relief deemed appropriate.

The lawsuit came on the same day as US President Barack Obama announced a range of policy measures for tackling NPEs, or “patent assertion entities” and “patent trolls” as a White House statement described them. Among the President’s five executive actions and seven legislative recommendations are new rules requiring patent owners to regularly update ownership records.

IV responded to Obama’s proposals by saying: “The details of these proposals still need to be reviewed more closely. As we’ve argued in the past, Intellectual Ventures believes ‘real party in interest’ (clearer patent ownership records) proposals are misguided and merit further discussion, but we will of course comply with whatever regulations are enacted.”

JP Morgan Chase did not respond to a request for comment.

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