LOS ANGELES Visa and MasterCard yesterday won preliminary victory in a patent suit brought by SmartMetric over rights to technology used in processing EMV cards.
“I don’t see there’s anything to determine here for a jury,” said U.S. Judge Michael Fitzgerald during a hearing in federal court here on the patent infringement suit seeking $13.4 billion in damages.
SmartMetric sued Visa and MasterCard two years ago, claiming it holds the patent on a system enabling automatic connection to a network. EMV cards include a microchip instead of a magnetic strip to access a payment system. The SmartMetric patent pertains to the process by which the payment system selects a network for a card transaction.
Credit unions and banks are rapidly moving toward EMV cards, which are in wide use in Europe. SmartMetric is asking the court for 25% of the savings Visa and MasterCard would accrue on EMV cards.
Visa and MasterCard have been tapping their credit union and bank owners to fund litigation settlements. The two card companies are the only stocks credit unions are authorized to own.
The judge did not issue a final ruling at yesterday’s hearing, taking the motion under submission.
SmartMetric has a similar patent suit pending against American Express.
