RealTime IT News

PayPal Hit by Another Patent Suit

Patent infringement lawsuits and PayPal seem to go hand-in-hand, and this time the court action was brought by credit card issuer First USA, a unit of BankOne .

PayPal, whose IPO was delayed by a patent infringement suit last February, of course denied the contention. The earlier suit, brought by online risk management company CertCo, was dropped in April.

The latest case, filed in federal court in Wilmington, Del., alleges that the Palo Alto, Calif.-based Internet payments company has infringed on two First USA patents for a "cardless payment system."

A PayPal spokesperson was quoted as saying it was "pretty obvious" its service did not infringe the patents in question. Reuters quoted the spokesperson as saying that one of the First USA patents for cardless payments was not issued until after PayPal's service had been launched.

First USA, a major issuer of Visa cards, had no comment.

PayPal went public on Feb. 15 and now is in the process of being acquired by auction leader eBay .