The complaint alleges that Apple Pay’s key features were based on the plaintiff’s innovations.
Apple has been sued by a Texas digital wallet maker over alleged racketeering, wire fraud and trade secrets misappropriation.
In a statement issued yesterday (7 August), the plaintiff, Fintiv, said that Apple attended meetings with CorFire – a company Fintiv acquired in 2014 – between 2011 and 2012, with the intention of licensing the company’s mobile wallet technology.
Fintiv alleges that Apple signed non-disclosure agreements in exchange for the confidential technical information it received.
However, it claims that Apple stole Fintiv’s confidential information and later hired key CorFire employees before launching Apple Pay in 2014. The complaint alleges that some of Apple Pay’s key features were based on CorFire’s innovations.
“Apple has repeated and compounded its theft by knowingly utilising Fintiv’s stolen technology in the hundreds of millions of iPhones, iPads, Apple Watches and MacBooks it has sold worldwide,” the complaint alleges.
It also accuses Apple of creating a fence by entering into an “association-in-fact” enterprise with banks such as JP Morgan Chase and Citbank and payment processing networks such as Visa and Mastercard to generate fees.
“Without the on-going benefit of Fintiv’s stolen mobile wallet technology and trade secrets,” the ability of Apple “to generate billions utilising Apple Pay would be severely compromised,” the complaint claims.
The civil lawsuit alleges violations under US laws Racketeer Influenced and Corrupt Organisations (RICO) Act, Georgia’s RICO Act, the Defend Trade Secrets Act and Georgia’s Trade Secret Act.
Fintiv’s lead lawyer calls Apple’s alleged theft of trade secrets a “colossal case of wrongdoing that is one the most egregious examples of corporate malfeasance I’ve seen in 45 years of law practice.”
The complaint further claims that Apple’s theft of Fintiv’s tech is “part of a pattern” that Apple has engaged in years and accuses the company of employing similar practices to steal proprietary information and hiring employees to commercialise the business on its own.
The lawsuit claims that Apple employed a similar “scheme” to “steal trade secrets” from health-tech companies Masimo Corp and Valencell, which Apple used for health tracking features on its Apple Watch.
This, however, is not Fintiv’s first lawsuit against Apple. The company filed a patent infringement lawsuit against Apple in 2018. That case, which was eventually dismissed, was later overturned.
Earlier this week, a federal district court ruled that Apple did not infringe some patents and granted Fintiv’s motion to dismiss the remaining claims. Fintiv also filed a similar lawsuit against PayPal.
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