RealTime IT News

Cybersource Sues Retail Decisions

Cybersource filed a patent infringement suit today against Retail Decisions (ReD), seeking an injunction and treble monetary damages for willful infringement.

Both companies develop and market electronic payment and risk management technology for merchants who take credit card payments over the Internet.

The suit claims infringement in relation to ebitGuard, one of ReD's card fraud screening services. Cybersource alleges ebitGuard uses technology covered by Cybersource's U.S. patent issued in 2000 for a "Method and System for Detecting Fraud in a Credit Card Transaction Over the Internet." The application for the patent was filed in 1997.

"The Board . . . is investigating CyberSource's claim, but at first glance it knows of no patent infringement and therefore believes the claim to be without foundation," the London-based Retail Decisions said in a statement. "If this proves to be the case upon further investigation, [Retail Decisions] will defend its position vigorously."

The statement adds, "In the first seven months of the current financial year (to July 2004) ebitGuard accounted for approximately 3 percent of ReD's group turnover and considerably less of its operating profit."

A spokesperson for Cybersource declined comment on pending litigation.

According to the U.S. Patent granted to Cybersource, the company's method and system "comprises obtaining credit card information relating to the transaction from the consumer; and verifying the credit card information based upon a variety of parameters."

The varieties of parameters are weighted so as to provide a merchant with a quantifiable indication of whether the credit card transaction is fraudulent. In so doing, the integrated verification system allows a merchant to accurately determine the validity of a transaction over the Internet.