US company Fintiv has filed a legal complaint against Apple, alleging that it stole trade secrets from its predecessor, CorFire, to develop Apple Pay.
The complaint claims that Apple employees held several meetings with CorFire to discuss the implementation of CorFire’s mobile wallet solutions and that CorFire had uploaded proprietary information to a shared site maintained by Apple.
According to the lawsuit, the two companies signed a non-disclosure agreement (NDA), giving Apple access to CorFire’s confidential information, which Apple allegedly misappropriated after abandoning plans for a partnership.
Fintiv’s legal team described Apple’s actions as “corporate theft and racketeering of monumental proportions,” claiming the company has earned billions from Apple Pay without compensating Fintiv.
Fintiv also accuses Apple of creating a fence by entering into an “association-in-fact” enterprise with banks such as JP Morgan Chase and Citbank and payment processing networks such as Visa and Mastercard to generate fees.
“Without the ongoing benefit of Fintiv’s stolen mobile wallet technology and trade secrets,” the ability of Apple “to generate billions utilising Apple Pay would be severely compromised,” the complaint says.
The lawsuit seeks both compensatory and punitive damages under federal and Georgia trade secret and anti-racketeering statutes, including the Racketeer Influenced and Corrupt Organizations Act (RICO). Apple is named as the sole defendant.
Fintiv’s lead lawyer calls Apple’s alleged theft of trade secrets a “colossal case of wrongdoing that is one the most egregious examples of corporate malfeasance I’ve seen in 45 years of law practice”.
The complaint further claims that Apple’s theft of Fintiv’s tech is “part of a pattern” that Apple has engaged in for years and accuses the company of employing similar practices to steal proprietary information and hiring employees to commercialise the business on its own.
The lawsuit claims that Apple employed a similar “scheme” to “steal trade secrets” from health-tech companies Masimo Corp and Valencell, which Apple used for health-tracking features on its Apple Watch.
Fintiv has been involved in ongoing litigation over its mobile wallet patents. Recently, it lost two key appeals: one against PayPal, which upheld the dismissal of its patent infringement claims, and another against Apple, in which the court confirmed specific patent claims were invalid.
However, in May, Fintiv secured a partial victory when the Federal Circuit reversed a lower court’s ruling that Apple did not infringe one of its patents (US Patent No. 8,843,125), allowing that part of the case to proceed.
