SmartMetric files complaint against Visa, MC

On Sept. 2, 2011, The Green Sheet reported SmartMetric Inc. promised to file a patent infringement suit against Visa Inc. and MasterCard Worldwide. SmartMetric revealed the following week it has made good its promise by filing a complaint in the U.S. Central District of California.

In SmartMetric v. MasterCard and Visa (No. CV11-7126), SmartMetric alleges the two card brands are infringing on its U.S. patent (No. 6,792,464, also known as '464) "by selling, offering to sell and using contact and contact/contactless credit card systems that use datacards that, when inserted into a data card reader, help to establish a connection to a network."

Earlier in 2011, a Markman hearing held in the U.S. Central District of California narrowed SmartMetric's patent claim to just two items. A Markman hearing is a pretrial hearing at which a judge determines the meaning of key words in a patent infringement case. Many of SmartMetric's alleged patent infringement claims were knocked out by the ruling. SmartMetric is appealing those exclusions.

Meanwhile, rather than wait on the appeal of the Markman hearing, the company moved forward on the two remaining viable claims. SmartMetric claims Visa and MasterCard violate its patented system for automatic connection to a network each time a card is swiped and routed through a database of network service providers. The company also claims the patent is also allegedly violated when a card chip is read by radio frequency identification device.

SmartMetric's complaint asks for an injunction against both MasterCard and Visa prohibiting them from infringing on the '464 patent. The complaint also requests the court to award SmartMetric royalties for every transaction that violated its '464 patent.

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