Visa Hit with Antitrust, Patent Suits Over Security Fix

December 13, 2006

Fenwick & West attorneys Tyler Baker, co-chair of the Antitrust and Unfair Competition Group, and Darren Donnelly, a patent litigation partner, were recently quoted in an IP Law 360 story entitled, "Visa Hit with Antitrust, Patent Suits over Security Move."

On behalf of Cryptography Research Inc. (CRI), Fenwick & West filed a complaint with the U.S. District Court for the Northern District of California, stating that Visa used its pull in the credit card industry to exclude CRI's solution to a 'smart card' security defect in order to avoid paying licensing fees. Visa originally had a licensing agreement with CRI, but terminated that agreement and allegedly conspired with MasterCard, creating a monopsony to eliminate standards that integrated CRI's solution to the security defect.

Baker explained that, "we already have patent claims against them that have been in play for a while...the new claims are that Visa and MasterCard agreed not to compete on this security aspect."

"The manufacturers who provide the smart cards have to have standards of security protection approved…EMV Co. used to have this standard, but when we protected our patents, [Visa] pulled it out of the standard in favor of something that didn't have this countermeasure," said Donnelly.

Read the complete article by IP Law reporter Elaine Chow. (subscription required)