Patent Wars Enter the Mobile Payments Arena
Patent infringement cases are all the rage now in the smartphone industry. We look at how this trend is affecting mobile payment technology – and the firms that stand behind this technology 

Mobile Financial Services Explosion in Mexico
Piqued by the rush of new developments in the Mexican mobile financial services market, we take a closer look to see who these players are and how they are changing Mexico's mobile money landscape.  Is Mexico the next hot spot for mobile financial services? 
 

Patent Wars Enter the Mobile Payments Arena

Since last year, the patent wars have been in full swing amongst smartphone manufacturers and the creators of their operating systems.  In the ever increasing list of patent lawsuits in the mobile business world (popular patent blogger and German intellectual property analyst Florian Mueller estimates that number to be approaching 100[1]), companies such as Oracle, Apple, Microsoft, Gemalto, and most recently BT, have been attacking Google’s Android OS, with varying levels of success.  For example, Apple won a partial victory in December over handset manufacturer HTC in regards to a particular type of screen tap technology[2]but lost in January forclaims that Motorola’s smartphone infringed three of its patents.[3] Meanwhile Microsoft has been successful in obtaining royalties from handset manufacturers HTC, Samsung, LG and others from the sale of their Android devices.[4] Add to the mix new entrants to the ring, such as Eastman Kodak, who is suing both Apple and HTC for allegedly infringing four of its imaging patents (though some attribute Kodak’s litigation to an attempt to shore up the value of its IP portfolio in order to stave off a bankruptcy filing[5]) and the patent wars seem to be blazing out of control.

Against this backdrop, it was only a question of time before the technology behind mobile payments would also provide fuel for such patent battles.  First enter eBay/ Paypal, which filed a complaint against Google in May 2011 charging theft of its mobile payment trade secrets in regards to Google Wallet.[6] The lawsuit alleges that the two executives, Osama Bedier and Stephanie Tilenius, both of whom were former PayPal employees, stole PayPal trade secrets and disclosed them within Google and to major retailers before leaving PayPal for Google.[7]  Although not technically a patent infringement case, analysts predict that such a complaint paves the way for a patent case in the near future.

So it was a bit of surprise to hear that the first patent infringement case to rear its head in the mobile payments space is being spearheaded by Maxim Integrated Products Inc., a maker of highly integrated analog and mixed-signal semiconductors.  Maxim is suing Starbucks, Expedia, Capital One and Bank of the West for patent infringement in their mobile payment applications, seeking both damages and injunctions.[8]  In regards to Starbucks in particular, the alleged infringement of four patents occurs when the Starbucks applications communicate with systems operated by or on behalf of Starbucks.  Maxim first made the claim in August 2011 directly to Starbucks, but the lawsuits seem to suggest that Starbucks has refused to accept a licensing arrangement, and the suits may be a way to pressure Starbucks and the other companies to agree to a licensing fee for Maxim technology.  It

is highly likely that other companies in the mobile payment space will be following this litigation so as, “to understand what design features within the Starbucks, Expedia and Cap One apps that Maxim feels infringes on their patents in order to weigh the considerations.”[9]
Although currently only four lawsuits among the current 100 or so patent infringement proceedings in the mobile business sector directly relate to mobile payment, this is an area that will draw more litigious activity.  The revenue potential in mobile payment is enticing with scale and the size of the market is growing rapidly; it is understandable that companies with IP in that area will want to monetize on their intellectual property and get a piece of the action.  The question is, will this area also succumb to the patent wars that are plaguing the smartphone industry in general?  Until recently, such wars have been avoided, as most actors have agreed to cross-licensing regimes in order to keep the status quo.  With Apple’s increasing disinterest in royalties (Jobs was quoted as saying that the suits are a battle of principle, not money) and Google’s brazen IP practices, m-payments may become the subsequent battlefield of the patent wars.

---