Lawsuit Accuses Apple Pay, Visa of Violating Patent Rights

Universal Secure Registry, a small Boston-based company founded by the inventor 0f corporate encryption technology RSI SecurID, Kenneth P. Weiss, is suing both Apple and Visa for patent infringement in the design of Apple Pay.

According to a new report from the New York Times, Weiss holds 13 patents for financial transaction authentication systems involving smartphones, biometric identification and one-time tokens.

Weiss further claims this is not a case of accidental infringement — i.e. Apple and Visa were unaware of his patents’ existence — since the suit alleges that Weiss had several meetings in 2010 with Visa executives (including the firm’s CEO) about the possibility of collaborating in the future.

Weiss says the two firms got as far as signing a 10-year non-disclosure agreement and assigning Visa engineers to fully understand the details before the communications ceased.

While Universal Secure Registry didn’t pursue licensing or royalties at that point, Weiss told the Times that the law firm 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.

Apple Pay launched by Apple in September 2014 in partnership with Visa, as well as MasterCard and American Express. The mobile wallet launched in Canada in the fall of 2015, with further expansion to major Canadian banks last year. HSBC Canada is set to launch Apple Pay for MasterCard soon.

According to Juniper Research, Apple Pay will have 86 million users by the end of 2017, compared to 34 million for Samsung Pay and 24 million for Android Pay.

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