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PayOne Claims Patent Infringement by Home Depot

Wed, 03/06/2013 - 10:11am
Andrew Berg

Still maturing, the mobile payments space hasn't seen a lot of high-profile patent lawsuits but PayOne's suit against Home Depot's deployment of PayPal's in-store checkout could get some attention. 

According to a press release, PayOne claims in a legal filing that Home Depot's retail store deployment and use of PayPal’s in-store checkout infringes on multiple PayOne patents, including the use of a mobile phone number and a personal identification number (PIN) to complete the checkout process and payment at point of sale.

The complaint seeks unspecified damages and a court-ordered injunction against future infringement by Home Depot. 

The asserted PayOne patents include United States Patent No. 7,848,500, entitled "Method And Apparatus To Validate A Subscriber Line"; and United States Patent No. 7,848,504, entitled "Method And Apparatus To Validate A Subscriber Line." 

PayPal and Home Depot could not be reached for comment prior to press time. 

PayOne’s platform and proprietary technologies enable, among other solutions, the simple use of a mobile phone number and PIN to instantly transact with a merchant at retail point of sale or in a virtual environment. The patents further cover technology in PayOne's real-time authentication and fraud control system to validate, execute, and settle financial transactions using a variety of funding methods, including accounts tied to the mobile number as well as credit/debit accounts and pre-paid cards for physical and digital goods and services.

The lawsuit against Home Depot has a history.

PayOne sued mobile payment provider Zong in May of 2011 for infringement of the two patents included in today's announcement. Zong sold to PayPay (eBay) in July of 2011 for $240 million and PayPal (eBay) was included in the lawsuit in early 2012.  

In January 2012, PayPal expanded the use of the mobile payments technology beyond virtual to POS in-store and announced deployments with 17 major retailers including Home Depot and Jamba Juice, Famous Footwear, Dollar General, Mapco Express, RadioShack, Spartan Stores, Abercrombie & Fitch, Advance Auto Parts, Aéropostale, American Eagle Outfitters, Barnes & Noble, Foot Locker, Guitar Center, JC Penney, Jos. A. Bank Clothiers, Nine West, Office Depot, Rooms To Go, Tiger Direct, Toys “R” Us 

In November 2012, PayOne provided notice to the above retailers that use of the mobile payment system constituted what PayOne believes to be infringement of the PayOne patents and requested that they cease and desist.

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