Texas Company Sues Apple Over ‘Theft’ of Technology Used to Create Apple Pay
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New York law firm Kasowitz LLP on Thursday announced the filing of a civil lawsuit against Apple on behalf of its client, Texas-based company Fintiv, in the Northern District of Georgia, Atlanta Division. The lawsuit alleges that Apple violated the Federal Racketeer Influenced and Corrupt Organizations (RICO) Act (RICO) and Georgia’s RICO Act, as well as the Federal Defend Trade Secrets Act and Georgia’s Trade Secret Act.
In the press release, the firm says its complaint against Apple alleges that the Cupertino-based company had discussions with Fintiv’s predecessor CorFire between 2011 and 2012, receiving access to confidential technical information under non-disclosure agreements (NDAs). While the smaller company believed Apple was planning to license CorFire’s mobile wallet technology, the lawsuit alleges that the iPhone maker instead stole the confidential information and later hired away key CorFire employees, before the launch of Apple Pay in 2014.
The complaint accuses Apple of violating US federal and state RICO and trade secret laws. The Racketeer Influenced and Corrupt Organizations (RICO) Act is a United States federal law that allows extended criminal penalties and a civil cause of action for acts performed as part of an ongoing criminal organization.
“Apple’s theft of Fintiv’s technology is part of a pattern and practice that Apple has engaged in for years – falsely pretending to partner with companies in order to steal confidential and proprietary information under the guise of a working relationship, and thereafter hiring away key employees, all in order to steal the company’s valuable intellectual property and use it to commercialize the business on its own,” alleges the complaint.
The complaint goes on to claim that Apple set up a fence by forming an “association-in-fact enterprise” with leading credit card issuing banks, like JPMorgan Chase and Citibank, and payment processing networks, like Visa and Mastercard. It alleges that by using Fintiv’s stolen mobile wallet technology and trade secrets in Apple Pay, Apple and its associated “RICO enterprise members” earn billions of dollars each year by servicing Apple Pay transactions.
“The scale of Apple’s unlawful conduct has been staggering,” the complaint alleges. “By modifying Apple Pay for use on four separate categories of its devices, Apple has repeated and compounded its theft by knowingly utilizing Fintiv’s stolen technology in the hundreds of millions of iPhones, iPads, Apple Watches and MacBooks it has sold worldwide.”
The complaint further alleges that Apple Pay is the engine” that drives the RICO Enterprise. It goes on to say that “without the on-going benefit of Fintiv’s stolen mobile wallet technology and trade secrets,” Apple’s ability “to generate billions utilizing Apple Pay would be severely compromised.”
The complainant additionally alleges that the “theft” of Fintiv’s technology is part of an established pattern and practice that Apple has engaged in for several years, citing Apple’s “similar pernicious scheme” to steal Masimo’s blood oxygen measuring technology for use in the Apple Watch.
As reported by MacRumors, the complaint has yet to be found in the US court filing system, so all of the above allegations and quotes are taken from the law firm’s press release.
While this Georgia lawsuit is a new filing, it is not the first to be filed against Apple by Fintiv. The Texas-based firm filed a patent infringement lawsuit against Apple in 2018 in Texas. While that case was eventually dismissed, an appeals court overturned the decision, remanding it to Texas for additional proceedings. A Texas judge earlier this week ruled that Apple had not infringed certain patents, granting Fintiv’s motion to dismiss the remaining claims. The legal battle begins anew with Thursday’s filing in a Georgia court.
