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Mobile Commerce and Payment Solutions Company Says PayPal Must Pay Up in Patent Infringement Suit

Paypal's headquarters.

San Jose, USA - October 15, 2015: PayPal headquarters located at 2221 N. First Street San Jose, CA PayPal is an United States company operating a worldwide online payment system.

According to a lawsuit filed on Thursday in the Western District of Texas, PayPal Inc. has illegally made use of intellectual property belonging to Fintiv Inc., a fintech company that provides “mobile commerce, payment solutions, and digital currency globally.” The complaint claims that PayPal knowingly infringes five Fintiv-owned patents through its mobile and web-based payment service offerings.

The complaint explains that PayPal has made “enormous profits” from the use of five mobile wallet patents invented by Fintiv, three of which are titled “Monetary Transaction System” and the other two “Using a Mobile Wallet Infrastructure to Support Multiple Mobile Wallet Providers.”

The filing details discussions between the two companies beginning in 2016 when PayPal explored licensing Fintiv’s technology and even acquiring the company. Negotiations reportedly lasted several years and included numerous phone calls and meetings. However, after a delay of more than one year, PayPal reportedly decided not to license the patents-in-suit or acquire Fintiv.

“Accordingly, Fintiv brings this patent infringement action to put an end to PayPal’s unauthorized and infringing use of Fintiv’s patented inventions and to recover the damages Fintiv has suffered as a result of PayPal’s egregious misconduct,” the lawsuit explains.

It states ten claims for direct and indirect infringement of the five patents.

For the indirect claims, Fintiv asserts that PayPal contributes to infringement and/or induces others to infringe by “providing instructions to its partners, merchants, customers, and end-users on how to download and use the PayPal application, including through its website”

Fintiv seeks a declaration that each of its patents is valid and enforceable, injunctive relief, and damages up to the statutory maximum, including damages for willful infringement. The plaintiff is represented by The Mort Law Firm PLLC.

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