The patent litigation filed by London-based technology vendor Serverside Group is not to be taken lightly by the credit unions and credit union service organizations the vendor lists as defendants.
That’s according to several attorneys contacted by Credit Union Times, who say the lawsuit could be very costly for the targeted organizations to defend or settle.
“A defendant should be concerned any time a patent lawsuit is filed,” Phoenix-based patent attorney Thomas W. Galvani said. “The level of concern, however, depends on the scope of each of the patent’s rights and the nature of the defendant’s allegedly infringing conduct.”
Serverside Group, which provides design, marketing and printing services to the international payment card industry, named 15 defendants for patent litigation. Credit union industry members included PSCU Financial Services in Florida, The Members Group in Iowa, the $1.3 billion Anheuser-Busch Employees CU of St. Louis, the $274 million Neighbors CU of St. Louis and the $753 million Credit Union 1 of Anchorage. JHA Payment Processing Solutions, part of Jack Henry & Associates of Monett, Mo. was also named among the private companies and financial institutions.
The London firm alleges defendants “infringed upon its U.S. patent right as to financial transaction card customization technology,” it said in a press release. The suit was filed in U.S. District Court in Delaware.
Several of the targeted CUs and CUSOs said they’re aware of the suit but provided few comments.
After taking a brief look at the two patents involved in Serverside’s litigation, Galvani said they appear to claim the rights to a system that can receive an image from a customer and then print the image onto a bankcard along with the customer’s financial account information with the card provider.
Both patents are titled “Computerized Card Production Equipment” and their claims generally relate to “computerized financial transaction card production equipment operable to apply one or more personalized images to a financial transaction card,” said Dallas-based patent attorney Kelly Kubasta, who also noted the hurdles Serverside Group will face.
“Serverside will have the burden of proving that each accused product or process places a personalized image on some form of debit or credit card, and that each accused product or process includes each of the elements recited in one or more of the patent claims,” Kubasta said.
Galvani adds the level of risk posed to the defendants may largely depend on a Markman hearing, a pre-trial hearing that determines the scope of the claims. The broader the scope, the more likely the defendants’ conduct will fall within that scope, the Phoenix attorney said.
“While the claims are generally directed toward a system that prints customized images and account information on bank cards, the exact meaning and nature of the words in the claims may be determined in a Markman hearing,” he said.