Court Denies Anti-Diebold Bid By ATMServicers

SAN FRANCISCO - (07/12/05) -- A federal court Monday denied arequest by the nation's ATM servicers to block a Diebold policyrequiring the servicers to provide maintenance and upgrades,including those on the mandated Triple DES security standard,through the nation's leading ATM manufacturer. In denying theFinancial & Security Products Association's request for apreliminary injunction against the Diebold policy, the U.S.District Court for the Northern District of California ruled thatthe trade association representing more than 350 ATM servicersfailed to demonstrate a likelihood of success on the merits of itssuit, but deferred final judgment on the case. The group ischallenging a Diebold policy that originally barred firms outsideDiebold from buying, installing or performing maintenance on thecompany's EPP4 keypad, required for Triple Data Encryption Standardupgrades, but now allows outsiders to perform the work as long asthey pay a licensing fee. The ATM servicers argued the policyamounted to a restraint of free trade under the Sherman AntitrustAct because the keypads are necessary to upgrade a large portion ofthe nation's 250,000 ATMs by the December 21 deadline set by Visaand MasterCard for Triple DES compliance. Diebold applauded thecourt decision as a protection of its patent on ATM parts andequipment. "The protection of our intellectual property is criticalto our ability to make ongoing improvements and innovations inservice," said David Bucci, senior vice president of CustomerSolutions for Diebold.