Lawsuit accuses Apple & Visa of stealing ideas behind Apple Pay as Apple teases new tech
A lawsuit launched this week accuses Apple and Visa of patent infringement via Apple Pay, in fact suggesting that one or both of the companies stole core ideas behind the platform.
The suit filed by Universal Secure Registry notes that its CEO -- Kenneth Weiss -- holds 13 patents on concepts used in Apple Pay, including smartphone authentication, biometric identification, and one-time payment tokens, according to The New York Times. Weiss is perhaps best known as the inventor of RSA SecurID, a popular authentication standard.
Weiss says that in 2010 he met with Visa's CEO and other officials about working on the patented concepts. Visa allegedly signed a 10-year nondisclosure agreement and even delegated engineers to understanding the technology, but then suddenly went radio silent without a license.
Around the same time, Weiss claims to have written to Apple about potential patent licenses without any response. Visa, MasterCard, and American Express began helping on Apple Pay in 2013 -- the technology eventually rolled out in Oct. 2014.
While Universal Secure Registry didn't pursue licensing or royalties at that point, Weiss told the Times that the lawfirm representing his company -- Quinn Emanuel Urquhart & Sullivan -- advised he file suit first. Quinn Emanuel previously represented Samsung in some of its battles with Apple.
Weiss nevertheless said he's hoping to reach an out-of-court settlement. "My intention is still to get into a conference room with them and resolve this," he remarked.
Universal Secure Registry has had no luck securing licenses with major companies, and is now reportedly building its own wireless authentication device.
Apple Pay has been relatively slow to spread and take root. On Sunday, however, the head of the platform, Jennifer Bailey, told The Telegraph that U.K. transactions have jumped 300 percent in the past year, and that over half of wireless payment terminals in country can now accept Apple Pay transactions over 30. The limit is normally imposed on wireless transactions to prevent fraud.
Bailey suggested that future Apple technology will replace other parts of the wallet beyond credit and debit cards, but didn't go into details.
"If you think about all the things in your wallet, we're thinking about all those things, we're probably actively working on most of them," she said. "We're starting with payments. Some are longer term, we see this as a long term journey rather than something we can solve in the next 12 months."
The suit filed by Universal Secure Registry notes that its CEO -- Kenneth Weiss -- holds 13 patents on concepts used in Apple Pay, including smartphone authentication, biometric identification, and one-time payment tokens, according to The New York Times. Weiss is perhaps best known as the inventor of RSA SecurID, a popular authentication standard.
Weiss says that in 2010 he met with Visa's CEO and other officials about working on the patented concepts. Visa allegedly signed a 10-year nondisclosure agreement and even delegated engineers to understanding the technology, but then suddenly went radio silent without a license.
Around the same time, Weiss claims to have written to Apple about potential patent licenses without any response. Visa, MasterCard, and American Express began helping on Apple Pay in 2013 -- the technology eventually rolled out in Oct. 2014.
While Universal Secure Registry didn't pursue licensing or royalties at that point, Weiss told the Times that the lawfirm representing his company -- Quinn Emanuel Urquhart & Sullivan -- advised he file suit first. Quinn Emanuel previously represented Samsung in some of its battles with Apple.
Weiss nevertheless said he's hoping to reach an out-of-court settlement. "My intention is still to get into a conference room with them and resolve this," he remarked.
Universal Secure Registry has had no luck securing licenses with major companies, and is now reportedly building its own wireless authentication device.
Apple Pay has been relatively slow to spread and take root. On Sunday, however, the head of the platform, Jennifer Bailey, told The Telegraph that U.K. transactions have jumped 300 percent in the past year, and that over half of wireless payment terminals in country can now accept Apple Pay transactions over 30. The limit is normally imposed on wireless transactions to prevent fraud.
Bailey suggested that future Apple technology will replace other parts of the wallet beyond credit and debit cards, but didn't go into details.
"If you think about all the things in your wallet, we're thinking about all those things, we're probably actively working on most of them," she said. "We're starting with payments. Some are longer term, we see this as a long term journey rather than something we can solve in the next 12 months."
Comments
How can they patent smartphone authentication, biometric identification, and one-time payment tokens in such general terms?
Weiss should not get a penny!
https://patents.google.com/?inventor=kenneth+weiss
You obviously have never invented anything of consequence. If you force people to have working versions before they can get a patent, then only big companies will be able to afford to patent the more complicated things because individuals can't spend millions to build one.
OTOH, when all 50 US states pass a law that I can show a law enforcement official a cell phone image (with the device locked, of course) and a insurance card (or equivalent) to fulfill a lawful demand for ID, we might be on to other...consequences.
Maybe having a wallet ain't so bad after all.
I've grappled with the dichotomy presented by the need to protect intellectual property versus the scourge that the non-practicing entity lawsuits represent.
Perhaps the answer is to limit the royalties that can be demanded from patents that are not being applied (non-practicing) versus those that are applied in some product or service. This would give greater protection and rewards to those who own patents and are using the patented technology in their products, because damage from infringement is higher versus damage to a non-practicing patent holder. If you've gone through the expense of utilizing a patented process or mechanism, then you should be compensated greater when someone infringes that patent. But if you haven't, and therefore also haven't brought a new product or service to market that allows society to benefit from the invention, then perhaps you shouldn't receive the same compensation for infringement.
There's perhaps a bit of precedent here in the FRAND royalty calculations for patents that are considered standards essential. The whole notion of SEP is that there's a greater good to society to allow multiple parties to utilize an invention as part of a standard and therefore it should be affordable for all to utilize the patented invention. Same here. Patented inventions that are sat upon don't benefit society, so there should be incentive to get those inventions into use.
To give time for a new patent holder to develop products and services around a patented invention, perhaps the first few years after the patent is granted, it can be exempt from the rules I'm suggesting here. The current status quo would remain in effect. But after, say, three years, if you haven't shown that the patent is being developed into a product or service, then licensing limitations go into effect so that the amount you may charge for your invention will be limited, ala FRAND-type pricing guidelines. So, if you don't intend to utilize a patented invention, either accept the lower royalty rates so that others can utilize it, or sell the patent to a company that will utilize it and therefore retain full royalty and infringement power over it.
For instance Apple is prone to patent every design, piece of hardware and process they think of whether it ever makes it into an Apple product. Many of them never do. They've used patents they didn't use themselves to sue other companies as a matter of fact, effectively a "Non-Practicing Entity" in those cases (At AI an NPE is often called a less friendly 2-word name by some posters) Would you be in favor of Apple losing leverage for their non-practiced patents? Seems quite a slippery slope once you start limiting existing property rights.
And by the way, the licensee is often given the right to prosecute patent rights as part of the license, has the absolute right to go after what they perceive as infringers of property they own or license.
And before the flames get higher, we develop our own products based on our patents, and only license distribution rights. Trollish we are not.
To USPTO: Please simplify that weak patent system and bring European test of practicality and use; Eliminate people who patent with no practical use or documented intention of use. Pre-existing users should also be relieved. Ideas are not business... or some of us will start patenting devices such as one with soft rolling point with any marking fluid that leaves marks on paper... and you will see what happens. We can start being creative as engineers.
I'm not trying to be a smart-ass with this question: don't you have to prove (or assert?) that your invention works before you can be granted a patent? Doesn't that involve having a 'working version'? Or am I 200 years behind in how the patent process works?
Patents already aren't like ownership of real property. They cannot be passed down from generation to generation perpetually the way real property can. No, they expire, which is the current means (and the thinking of those who created the concept of a patent) to release these ideas [eventually] into the market for the betterment of society. But this aspect of patents, put in place a long time ago, might need to be looked at again in the context of the modern fast-paced technology treadmill we're on today. Waiting 17 years to allow society to benefit from a patented invention might be too long. But rather than take away that duration, which erodes the very basis of incentive to invent and bring an invention to market, let's look at the other aspects. I'm suggesting one potential way forward, and yes, I would apply it to Apple. What's fair is fair. Apple would not be able to sit on their patented inventions without using them; the idea is to get inventions into use ASAP for the betterment of society, balanced with the need to provide reasonable protections for the efforts put into inventing. I don't think my proposal is unreasonable when the greater good is recognized as the primary reason patent protection exists.