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.