LML Patent Corp. Inc., a fully-owned U.S. subsidiary of Vancouver-based LML Payment Systems Inc., provides financial payment processing solutions for e-commerce and traditional businesses. It appears by all accounts they own U.S. Patent No. RE40220, Check Writing Point of Sale System, filed 6-12-2004, issued 4-8-2008, and assigned to LML Patent Corp. in the patent document.
The topic sentence of the Abstract for RE40220 reads: A point of sale system designed to read information from a consumer’s check, credit card, or manual input with a subsequent debiting of a consumer’s account and crediting merchant’s account for the goods or services provided.
In essence, this invention brings check handling into the paperless world eliminating the processing and physical handling of commercial bank drafts, replacing those bank drafts at the point of sale.
Upon issuance of RE40220, LML immediately publicized the existence of the patent.
Once the corral was built and the gates oiled, it didn’t take long before LML started the round-up.
LML Patent Corp. Files Patent Infringement Suit Against 19 DefendantsThis is how the GLOBE NEWSWIRE headline read in Vancouver, B.C., on Nov. 24, 2008.
Choosing the Eastern District of Texas venue, LML sued for infringement JP Morgan Chase & Co., WellsFargo & Company, Wachovia Corp., Citigroup, Inc., HSBC and PayPal and 13 more companies that provide equipment, systems and services that convert paper checks into electronic transactions at the point of sale.
Realizing that they had some less obvious strays, LML struck out again in mid-2009 against six more offenders, among them the National Bank of Daingerfield and the American National Bank of Texas, again seeking “damages, injunctive and other relief” for infringement of RE40220. In all, LML sued 25 defendants.
Publicizing their largest settlements, LML announcedlast week it had agreed to a $7.5-million settlement with Citigroup a $5.5-million settlement with HSBC. The paid-up license agreements, which back-pay for the use of LML technology from 2008, and allow the two banks to use LML technology for check conversion transactions until January 2013 (patent expiration), help valuators get a sense of RE40220’s value, when the $13M is combined with the $9M in settlements already reached with 12 other defendants.