Mobile payments haven't even been widely adopted in the brick-and-mortar world, but it's never too early to assert intellectual property rights, it seems. For instance, carrier biller PayOne has filed a lawsuit against The Home Depot Inc. claiming that the big box retailer's deployment of PayPal in-store checkout infringes upon several PayOne patents.
The suit was filed yesterday in the Northern District of California. PayOne said it is asking for unspecified damages and an injunction against future infringement. The Home Depot has not responded to a request by Mobile Payments Today for comment about the lawsuit.
The patents in question involve the use of a mobile phone number and a PIN to complete checkout and payment at the point of sale, PayOne said. The company holds patents for proprietary technologies that use a mobile phone number and PIN to instantly transact with a merchant at the point of sale.
The company said it holds additional patents covering real-time authentication and fraud control systems that use a mobile phone number tied to a payment account — whether debit, credit or prepaid — to purchase physical and digital goods and services.
"Since 2000, PayOne has invested significant time and money developing its proprietary mobile payment technologies designed to simplify the checkout process, and the PayOne systems have been deployed by digital merchants across the globe," said Joe Lynam, president and CEO of PayOne.
"The 'mobile wallet wars' have moved beyond the digital world into point of sale, but now face adoption challenges and substantial friction with consumer setup requirements, security concerns and lack of merchant-required NFC infrastructure," Lynam said. "PayOne's technology solves these challenges by enabling an 'instant wallet' capability that can be extended to the retail and physical world for billions of consumers worldwide, with no pre-registration or friction at point of sale, and no NFC infrastructure required."
In order to use PayPal accounts in the offline world, account holders use their mobile phone numbers to access their accounts, and enter a PIN entered on the POS keypad to validate the purchase. The Home Depot was the first retailer to accept PayPal at the point of sale, introducing it as a payment option early last year.
A PayOne spokewoman said the company already has an ongoing patent infringement lawsuit against PayPal. PayOne originally filed the suit against direct carrier biller Zong in 2011. When Zong was purchased by eBay and merged into PayPal in 2011, the name on the complaint was changed.
It was through the Zong acquisition that current PayPal president Dave Marcus came to PayPal.
Read more about digital/mobile wallets.