Wednesday, October 9, 2013

Intellectual Ventures Sues Over CID/CVV Patent

Mike Masnick (via John Siracusa):

AmEx patented those little numbers on your credit card, and then for the good of the industry and consumer protection donated the patent to a non-profit, who promised not to enforce the patent against banks… and then proceeded to sell the patent to Intellectual Ventures who is now suing banks over it.

Update (2014-04-22): Joe Mullin:

Three other IV patents were dropped from the case at earlier stages of the litigation. One of them, No. 6,182,894, originated with research at American Express. IV lawyers said it covered the use of the three-digit CVV security codes on the back of credit cards, but in January they submitted a motion in which they “recognize that the claims, as written, are at risk of being found invalid,” and withdrew the patent.

Of course, some commentators wondered how a three-digit security code on the back of a credit card could be purchased at all. Perhaps in recognition of how terrible it would look suing over such a patent, AMEX donated the patent to a non-profit, the Consumer and Merchant Awareness Foundation (CMAF). The charity promised not to use the patent to sue “issuers, acquirers, merchants or consumers.” In 2009, patent office records show CMAF sold the patent to Intellectual Ventures.

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