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Apple, others sued for electronic payment patents

updated 04:55 pm EDT, Tue June 2, 2009

Electronic payment lawsuit

Actus LLC, patent holding company based in Marshall, Texas, has sued Apple, Amazon, Ebay, Best Buy, Barnes & Noble, and a number of other companies for infringing on several patents relating to methods for "conducting electronic commerce transactions using electronic tokens." The patents - Nos. 7,328,189; 7,249,099; 7,177,838; and 7,376,621 - were originally filed by a company named PayByClick.

The patents detail a variety of ways customers can make purchases online. The specific claims involve the way payments are processed, using "electronic tokens" that are kept in a database entry of the users' accounts, or communication between a number of servers to enable electronic commerce. The patents also allegedly cover the methods for determining if a customer has adequate funds to purchase tokens.

Apple is specifically accused of infringing the patents through the Apple Store, iTunes and the iPhone App Store. eBay is named in the suit because of PayPal transactions. The list of defendants includes 15 companies, including a number of banks and retailers.

The Eastern District of Texas is particularly well known for patent litigation. Attorneys and represented companies have been attracted by comparatively quick proceedings and juries perceived to be more likely to rule in the plaintiff's favor. Apple recently lost a patent infringement suit in the Marshall Division court, resulting in a judgment for $19 million in damages.

Actus earlier this year sued 20 companies over the same four patents. Defendants in the case include industry giants such as Google, Bank of America, Capital One, Mastercard, Visa, Wal-Mart and Walt Disney. Both Actus' registered agent, Daniel Perez, and the lead counsel, William "Bo" Davis, are attorneys that specialize in intellectual property suits.

Actus demands a jury trial and seeks monetary compensation from each company for damages, costs, expenses and interest, along with enhanced damages "resulting from the knowing, deliberate, and willful nature of Defendants' prohibited conduct."

By Electronista Staff


  1. sigzero

    Fresh-Faced Recruit

    Joined: Nov 2006


    Oi Vey!

    I hope Actus loses big! That is ridiculous.

  1. malax

    Fresh-Faced Recruit

    Joined: Aug 2006


    same old same old

    The most absurd part about this is how long they waited to sue. My mother could have told you that Amazon does electronic payments and she doesn't use a computer. So it's obvious that they have known of this alleged infringement, for what, a decade and not done anything about it. That should be grounds for dismissal. In the same way you have to take steps to protect your trademark, you should have to protect your patent.

    And what's in the water in Marshall, Texas??

  1. Bobfozz

    Fresh-Faced Recruit

    Joined: Jul 2008


    Actus in use?

    Is there anything in patent law that requires outfits like Actus to actually use their patents (assuming they really have been trampled on). Is there some reason the attorneys for the accused companies not doing "due diligence" before they make something? What are teh Factus Actus?

  1. Zanziboy

    Forum Regular

    Joined: Aug 2008


    Patent decades too late!

    Reading some of the patents in question, particularly patent 7,328,189 (filed in 2001), demonstrates the garbage the US Patent Office allows. Usually patents lay claim to specific implementations, but this patent attempts to encompass any non-currency representation of data in a database which is used for future charging.

    This patent cannot be defended as this is how all credit-based transactions have been processed since the invention of top-up cards, calling cards, gift vouchers, discount codes, etc. All of which, existed years before the patent was filed. All which used the same generic architecture proposed in the patent.

    It's time for the international community to raise the benchmark for what is patentable and what is not.

  1. aristotles

    Grizzled Veteran

    Joined: Jul 2004


    Figures that it is TEXAS

    The patent trolls love to file out of TEXAS because there are corrupt judges there who will almost always side with the plaintiff in the case no matter how ridiculous the patent is.

    This patent has been in use not only in e-commerce but by the banking industry for decades.

  1. pairof9s

    Senior User

    Joined: Jan 2008


    self serving

    This is just lawyers and former lawyers (judges) keeping themselves rich through extensions, delays and appeals. The defendants pay exorbitant fees to litigate frivolous lawsuits while plaintiffs will see little of any awarded judgements years from now...but the whole time lawyers' fees meters are running!


  1. climacs

    Mac Enthusiast

    Joined: Sep 2001


    so basically

    Actus bought up an all-but-defunct company which had a patent they thought they could exploit, suing every deep pocket in sight in hopes of getting them to settle up regardless of the frivolousness of their claims.

    check this out:

    scroll to the bottom.

    yep. shysters milking the system.

  1. yakirz

    Fresh-Faced Recruit

    Joined: Oct 2001



    we need to get rid of all patents and copyrights, stop trying to make money on things, and just share and use everything.

  1. testudo

    Forum Regular

    Joined: Aug 2001


    Re: Figures that it...

    The patent trolls love to file out of TEXAS because there are corrupt judges there who will almost always side with the plaintiff in the case no matter how ridiculous the patent is.

    The judges are not corrupt. These are jury trials, the judges don't make the verdict.

    It is the people that are the problem. There are certain areas of the country where the people feel the little guy is always getting shafted by big corporations and are more likely to rule against the corporations.

    There was/is a county in Mississippi that was the same way. Every lawsuit against drug company's would go through there.

    The people have the "Well, if I end up suing someone, I hope to win, so I'm going to rule for these guys to help me in the future", regardless of the fact that'll never happen.

    You know, sort of how everyone in the US is against the 'death tax' even though it only affects like 1/10th of 1% of all people who die. Everyone hopes that one day they'd be in that percentile.

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