Patent Fight Heats up Over Cardtronics’ Multi-Purpose ATMs

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WILMINGTON, Del. – An inventor claiming to hold a patent on ATM non-financial retail functions ratcheted up his fight with Cardtronics last week, filing suit in federal court here alleging the nation’s largest provider of ATMs is infringing on his patents for multi-purpose automated transaction machines.

In his suit, David Barcelou and his Transaction Holdings Ltd., Inc., claim that Barcelou is the exclusive licensee of the patent for ATMs that distribute non-financial products, and that Cardtronics is infringing on his patent with the use of 5,700 multi-purpose ATMs in 7-Elevens around the country. The suit claims that Barcelou holds the patent for combining ATM services with non-banking retail functions.

The suit asks for royalty payments and treble damages from the Houston ATM manager.

The latest action comes as the parties have been fighting since 2006 over a similar suit claiming Cardtronics and 7-Eleven are infringing on the company’s patent for off-site financial transactions through the use of Vcom ATM-like self-service financial kiosks, which are connected to Financial Service Centers Cooperative’s shared credit union branching network.

Cardtronics, which operates more than 25,000 ATMs across the U.S., was operating the 7-Eleven ATMs under contract until 2007, when it acquired the operation from IYG Holdings Co. for $135 million. IYG and 7-Eleven also are named as defendants in the latest suit, as is Vcom Financial Services, the maker of the self-service kiosks.

Automated Transactions has filed similar patent infringement suits against First Niagara Bank and Astoria Federal Savings and Loan.

Cardtronics is the biggest provider of electronic funds transfer services for credit unions, connecting its 25,000 ATMs to the CO-OP Financial Services and Credit Union 24 networks, as well as to FSCC.

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