Shopify tangled up in online payment patent suit
A California-based online payments technology company took a competitor and Canadian e-commerce company Shopify to court late last week.
In the lawsuit, filed at the US District Court for the Northern District of California on Friday, February 1, Boom Payments accused Shopify and rival Stripe Inc of infringing Boom’s patents to create their own online payment products.
Both of Boom’s patents, US numbers 8,429,084 and 9,235,857, are called “Confirming local marketplace transaction consummation for online payment consummation”. They relate to specific improvements to computer systems for processing and authenticating internet-based transactions.
Along with accusing Shopify and Stripe of infringing the two patents, Boom’s suit imparts a history lesson.
Erik Bogaard, the inventor of the patents and founder of Boom, previously started another company called myBookCrate.com (an online marketplace for textbook transactions) during his time at Boston University.
The marketplace, which was named as a semi-finalist on Forbes magazine’s list of America’s Most Promising Companies, used some of the technology described in the patents to provide the payment and authentication process.
With his experience with myBookCrate.com, Bogaard “decided to focus on
developing and commercialising his internet-based payment processing inventions”.
Since then, according to the claim, the commercial applicability of Boom’s technology has only grown. For example, Boom has partnered with an e-commerce platform provider, and hundreds of merchants have used Boom’s payment authentication technology on their websites, said the suit.
Boom went on to claim that Stripe and Shopify have processed millions of internet-based transactions using Boom’s technology.
“Stripe is no stranger to Boom. Boom discussed its patented technology with Stripe representatives in 2013, with the goal of partnering with Stripe to develop a payment authentication product that Stripe could offer to its customers,” alleged the suit, adding that Stripe had “simply copied” the invention and launched its own platform one year later.
Shopify has become entangled in the suit because its accelerated checkout feature is allegedly powered by Stripe’s payment processor platform.
Boom is seeking a finding of enhanced damages due to the alleged wilful infringement of its patents and permanent injunctive against both Stripe and Shopify.
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