The rise of patent lawsuits in the mobile payments arena


Originally published in E-Finance & Payments Law & Policy - May 2012.

Companies large and small are rushing to develop new products and technologies to net their share of the $1 trillion of projected value in mobile payments. But this enthusiasm may be dampened by a number of patent infringement lawsuits in the US directed towards the mobile payments industry, which could limit the very innovation that has defined the industry so far. Erin Fonté of Cox Smith Matthews Incorporated discusses the trends so far and the moves by the big players looking to limit their liability and expand their patent portfolios in what is set to be a highly lucrative market.

Mobile payments technologies using either near-field communication ('NFC') technology or existing technology (bar codes, QR codes, cloud) may be at an adoption tipping point in the U.S. and abroad. A number of mobile payments products, such as Square (for merchant card processing), and the Starbucks app (for POS purchases at Starbucks locations) have launched within the last few years. Mobile wallet offerings that seek to replace the physical wallet and 'revolutionise' mobile payments have been launched by Google (Google Wallet), ISIS (a consortium of U.S. telecoms, card associations and big banks), and PayPal (PayPal Mobile Wallet). U.K. telecoms sought to follow suit with 'Project Oscar,' a proposed joint venture between TMobile, Orange, O2 and Vodafone, but launch plans for the London 2012 Olympic Games were put on hold and the project is currently under investigation.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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