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Security company settles patent suit with six FIs
PLANO, Texas (7/13/12)--A Plano, Texas-based security company specializing in Internet security technology has settled its patent infringement lawsuit with six financial institutions, including a credit union. 

Secure Axcess LLC said it has licensed its identity and access management (IAM) technology to the six institutions that settled. Its technology relates to the use of a security image for authentication, which is widely used by the banking industry to protect online members and customers from "phishing" and other forms of fraud, said the company's press release.

The technology was originally developed by engineers working at American Express and is covered by U.S. Patent No. 7,631,191, the company said.

Although six institutions settled with the company, 14 other financial institutions--including Bank of America, BBVA Compass, and ING Bank--remain as active defendants in the suit, which was filed in the U.S. District Court for the Eastern District of Texas.

The settlement announcement came just as another patent infringement suit was filed in a Texas district court by EMG Technology against Google over the mobile version of Google's Chrome browser. EMG claims Google's browser violates EMG Technology's "simplified navigation system" for smartphones and tablets  by "displaying mobile webpages on smartphones and tablets" (PC Magazine July 12). EMG says its patent, issued Oct. 21, 2008, uses unique inputs to manipulate a touch screen for zooming and scrolling.

EMG has filed patent infringement suits in the past. It sued Apple in November 2008, saying Apple's iPhone infringed on its patent for navigating the Web on cell phones. And it sued Microsoft in August 2009 over two patents one for navigating Internet control on a TV and the other for the method of manipulating a region on a wireless device screen for viewing, zooming and scrolling Internet content, said PC Magazine.

The EMG case is the latest in a series of "smartphone patent wars." Last month a U.S. District Judge in Chicago ruled Apple could not pursue an injunction against Google's Motorola Mobility unit as part of the "smartphone patent wars." (tech12.incom June 25).

Credit unions and credit union service organizations, and service providers, in their quest for advanced technologies to serve their members more conveniently, have bumped up against patent issues before. Along with the legitimate patent lawsuits, they've also run up against lawsuits by some patent owners, which, according to Bloomberg.com (June 25), use "their rights to collect license fees instead of producing products."

Catalyst Corporate FCU, for example, filed a preemptory lawsuit in a U.S. District Court in the Eastern District of Texas in April seeking a judgment that it had not infringed on any processing patents after it received a letter and "proposal to negotiate patent license" in March from IP Navigation Group (IPNav), an intellectual property advisory firm that had experience with monetizing patents (News Now April 23).

The Huffington Post Thursday reported on the parade of patent lawsuits.  "It used to be companies might threaten patent lawsuits to collect licensing fees--especially in the tech space where interoperability makes companies more dependent on each other," said the Internet newspaper. "But now, companies seem increasingly interested in licensing to third parties (patent trolls) to go after those who are competing against them. For the tech industry, the possibility of tens of thousands of patents in a single product such as a smartphone is a huge burden, risk, and ultimately a tax on innovators."

Researchers at the Boston University School of Law said in a study released last month that business costs have risen more than fourfold since 2005 over royalty demands filed by patent owners seeking quick profits. The BGOV Barometer indicates companies face $29 billion in expenses from 5,874 infringement claims filed in 2011 by "non-practicing entities, patent owners using their rights to collect license fees instead of producing products."  That is up from 1,401 claims and $6.6 billion in costs in 2005, the study said (Bloomberg.com June 25).

Companies with $1 billion or less in annual revenue were named in 59% of the claims filed in 2011. Large companies end up paying more in settlement and legal costs, but smaller companies' expenses in these cases eat up a larger portion of their revenue, the study said.

San Francisco-based RPX, which developed a lawsuit database, surveyed technology companies it works with and learned it costs on average $1.75 million for a small or medium-sized company to cover legal and settlement costs.  It costs $8.79 million for companies with more than $1 billion in annual revenue .


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