Fintiv Accuses Apple of Trade Secret Theft on a ‘Staggering’ Scale

Fintiv, Inc. has filed a complaint against Apple, Inc. in the U.S. District Court for the Northern District of Georgia, Atlanta Division, alleging “corporate theft and racketeering of monumental proportions” due to Apple’s misappropriation of Fintiv’s mobile wallet technology.

Fintiv’s complaint charges that Apple blatantly stole its trade secrets for mobile wallet technology from Fintiv’s predecessor, CorFire, under pressure to develop a mobile digital wallet and an inability to do so on its own. According to Fintiv: “Over the course of 2011 and 2012, Apple representatives, under the guise of seeking to do a mobile payment business partnership with CorFire, had numerous meetings with CorFire employees at which the parties had detailed technical discussions regarding CorFire’s implementation of its mobile wallet solutions and included information that CorFire uploaded onto an Apple maintained share site.”

Subsequently, the complaint alleges, Apple abandoned all plans to partner with CorFire and used the information it had gathered during those meetings to eventually launch Apple Pay in the United States in 2014, and throughout the world soon after. Fintiv explained:

“Apple fraudulently induced CorFire to enter an NDA enabling Apple to gain access to CorFire’s mobile wallet technology and trade secrets. Apple then unlawfully exploited that access by incorporating into Apple Pay features previously found only in CorFire’s proprietary secure element and mobile wallet technologies that were protected as confidential trade secrets.”

Furthermore, says the complaint, Apple has formed an enterprise with credit card processors and banks in order to cash in on Apple Pay and has necessarily concealed its trade secrets theft from that enterprise by “fraudulently advance[ing] the false narrative that it is the developer of Apple Pay.” These relationships with the companies that formed the enterprise led to “unlawful conduct” on a “staggering” scale, said the complaint.

Apple’s behavior is not limited to its misappropriation of Fintiv’s secrets, it added. “Apple’s theft of Fintiv’s technology is part of a pattern and practice that Apple has engaged in for years: falsely pretending it wants to ‘partner’ with companies in order to steal confidential and proprietary information under the guise of a working relationship, and thereafter hiring away key employees, all in order to steal the company’s valuable intellectual property and use it to commercialize the business on its own,” wrote Fintiv.

As an example of this, Fintiv cited similar partnership schemes Apple engaged in with Masimo over blood oxygen monitoring technology and with biotech company Valencell, Inc. over heart-monitoring technology.

Marc Kasowitz of Kasowitz, LLP, Fintiv s lead lawyer, in a statement called Apple’s actions “a colossal case of wrongdoing that is one the most egregious examples of corporate malfeasance I’ve seen in 45 years of law practice.”

Fintiv’s claims are brought under the Racketeer Influenced and Corrupt Organizations Act (RICO); the Georgia Racketeer Influenced and Corrupt Organizations Act; the Defend Trade Secrets Act (DTSA); and the Georgia Trade Secrets Act.

Fintiv has been engaged in litigation over its mobile wallet technology for several years. Recently, PayPal defeated Fintiv’s appeal of a district court decision scrapping Fintiv’s patent infringement claims against it, and the CAFC also delivered a win for Apple when it dismissed Fintiv’s appeal of a Patent Trial and Appeal Board holding that claims 1–3 of the ‘386 patent were unpatentable. But in May, the Federal Circuit reversed a district court’s decision granting summary judgment of non-infringement for Apple with respect to Fintiv’s U.S. Patent No. 8,843,125.

Apple had not responded to IPWatchdog’s request for comment as of the time of publication.

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Author: Primakov
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