VeriFone Holding Inc.’s allegation that a payment terminal Heartland Payment Systems Inc. is developing infringes on a VeriFone patent has sparked Heartland to sue VeriFone over a separate matter, according to court documents.
In a Sept. 9 complaint filed in the U.S. District Court, Northern District of California, VeriFone alleges a new payment terminal the Princeton, N.J.-based payment processor is developing infringes on a patent subsidiary VeriFone Israel holds for an anti-tamper enclosure in a point-of-sale terminal.
VeriFone alleges that the Heartland device, using technology supplied by Uniform Industrial Corp., a Taiwan-based company, relied on the patent. More than a week later, Heartland filed suit against VeriFone in the Superior Court of New Jersey in Mercer County alleging VeriFone threatened Heartland that it would cut off supply and services to Heartland’s merchants if it did not cease development of device that used the patent.
Heartland alleges VeriFone wants an exclusive deal to supply Heartland with payment terminals using advanced encryption technology.
“VeriFone’s motive for this was clear: It did not want Heartland enabling the efforts of an Asian terminal manufacturer to enter the United States and compete with it,” Heartland’s complaint states. Heartland also claims VeriFone CEO Douglas G. Bergeron said, “I can’t let you bring the Asians into North America. I want an unfair advantage. That’s what I live for.” A VeriFone spokesperson says the company has no comment on that claim.
In a statement, VeriFone responded that its case against Heartland “is a simple case intellectual infringement.” Additionally, the statement says VeriFone “is committed to license the VeriShield end-to-end encryption solution to the payment industry.” VeriShield is VeriFone’s proprietary system for protecting sensitive cardholder data.
In an amended complaint against Heartland filed Oct. 13, VeriFone says Heartland’s suit is “in retaliation for filing this suit seeking to enforce VeriFone Israel’s patent.” VeriFone wants Heartland to stop activity it says infringes on that patent. Heartland is seeking court costs and undisclosed compensatory and punitive damages in its case.
A statement from Heartland was not available by CardLine’s deadline.