March 7, 2013, 11:07 AM

Mobile payments vendor sues Home Depot over use of PayPal in-store

PayOne says Home Depot is infringing on the vendor’s mobile payments patents.

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PayOne, formerly PaymentOne Corp., a mobile payments and carrier billing technology provider, has filed a patent infringement lawsuit against The Home Depot Inc. in the Northern District of California. In its complaint, PayOne asserts that The Home Depot retail store deployment and use of PayPal’s in-store checkout infringes on multiple PayOne patents, including the use of a mobile phone number and a personal identification number, or PIN, to complete the checkout process and payment at the point of sale.

The complaint seeks unspecified damages and a court-ordered injunction against future infringement by Home Depot. The PayOne patents include United States Patent No. 7,848,500, entitled “Method And Apparatus To Validate A Subscriber Line,” and United States Patent No. 7,848,504, entitled “Method And Apparatus To Validate A Subscriber Line.” PayOne is represented in this action by the law firm Niro, Haller & Niro, Ltd.

A spokesman for Home Depot, No. 42 in the Internet Retailer Top 500 Guide, says the company has yet to see the suit and that “respect for intellectual property is something we take very seriously.”

For more than 10 years, PayOne has been developing technologies enabling shoppers to instantly use their phones and accounts tied to their phones to simplify payment and checkout in stores and online, the vendor says. PayOne’s platform and proprietary technologies enable, among other things, the use of a mobile phone number and PIN to transact with a merchant at the retail point of sale or in an online setting. The patents further cover technology in PayOne’s real-time authentication and fraud control system to validate, execute and settle financial transactions for physical and digital goods and services using a variety of funding methods, including accounts tied to the mobile phone number as well as credit and debit accounts and prepaid cards.

“Since 2000, PayOne has invested significant time and money developing its proprietary mobile payment technologies designed to simplify the checkout process; the PayOne systems have been deployed by digital merchants across the globe,” says Joe Lynam, president and CEO of PayOne.

The number of mobile devices in use will exceed 10 billion by the end of this year, according to the Cisco Visual Networking Index. These connected devices typically have an existing billing relationship and can be instantly enabled for mobile payment. Given the ubiquity of mobile devices with existing billing relationships, the opportunity for mobile payments through an ‘instant wallet’ such as PayOne’s technology enables now far exceeds the estimated 2 billion credit card holders on a global basis, PayOne says.

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