Fintiv targets PayPal in mobile payment patent suit
Tech company Fintiv has accused PayPal of using its patented mobile wallet technology without its permission.
Fintiv filed a patent infringement complaint against PayPal to the US District Court for the Western District of Texas on Thursday, March 17.
In the complaint, it claims that PayPal has “flatly refused” to pay Fintiv to continue using its patented technology, and has filed the lawsuit to “put an end” to PayPal’s continued “egregious” infringement of the patents.
The patents-in-suit are US patent numbers 8,538,845, 9,892,386, 11,120,413, 9,208,488, and 10,438,196, which cover a “monetary transaction system” to facilitate transactions between a bank and a customer via mobie devices.
PayPal was aware of the patents prior to the filing of the lawsuit, Fintiv claimed. In March 2016, Fintiv said a PayPal employee emailed Fintiv requesting a discussion on Fintiv’s patented technology and a potential strategic partnership between the two companies, as well as the possibility of PayPal acquiring Fintiv.
The complaint claims that the ‘845 and the ‘488 patents were discussed “extensively” on the call and presented PayPal with a presentation that demonstrated how the patents could benefit PayPal’s payment processing.
In 2019, Fintiv’s president had a call with PayPal’s director to explore the possibility of licensing the patents due to the company’s “continued infringement” of the patents. After “delaying” talks for a year, PayPal ultimately decided not to license the patents or acquire Fintiv.
Fintiv demands a trial by jury for the direct and indirect infringement of its five patents, and an enhanced damages award.
Fintiv rule
In recent years, Fintiv has been synonymous in IP circles with the NHK-Fintiv rule, a US Supreme Court edict that dictates that the existence of a parallel district court lawsuit should preclude an inter partes review of the patent.
The controversial rule, which has been in place since 2020, has been responsible for a sharp rise in denials for inter partes review petitions at the US Patent Trial and Appeal Board (PTAB).
NHK-Fintiv has gained the ire of critics who claim that the rule compromises the integrity of the US patent system by protecting poor quality patents.
In January, the US Supreme Court rejected bids from Apple and Mylan to overturn the rule.
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