PayPal Inc. has paid LML Patent Corp., a wholly owned, indirect subsidiary of LML Payment Systems Inc., $7.5 million to settle a patent dispute that stemmed from an infringement complaint involving 19 other financial institutions, LML announced in a press release.
LML in 2008 filed the complaint and claimed the financial institutions infringed on its technology that can “read information from a consumer’s check, credit card or manual input with a subsequent debiting of a consumer’s account and crediting a merchant’s account for goods or services provided,” according to court documents from the U.S. District Court in Eastern Texas.
PayPal, which eBay Inc. owns, receives a fully paid-up license to certain patents for electronic check-conversion transactions as part of the settlement, according to the press release. Vancouver, British Columbia-based LML says it also has settled litigation with nine other financial institutions, including Citigroup Inc. and HSBC Holdings PLC.
PayPal declined to comment on the settlement. LML did not respond to a request for comment.
LML provides payment processing for both e-commerce and brick-and-mortar retailers. Its recent settlements cancelled the patent trial’s first phase, which was scheduled to begin March 21, according to the press release. Two more trial phases still are scheduled to begin in October.
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