Maxim Integrated, a California semiconductor company, filed a patent infringement suit against Starbucks in the U.S. District Court in the Eastern District of Texas alleging the Starbucks Card Mobile, Starbucks for iPhone and Starbucks for Android applications infringed upon four of Maxim Integrated’s patents. The patents in question describe mobile payment methods “for enabling a user to fill a portable module with a cash equivalent and to spend the cash equivalent at a variety of locations” and as an “electronic module [that] is capable of passing information back and forth between a service provider’s equipment via a secure, encrypted technique so that money and other valuable data can be securely passed electronically.”

Starbucks isn’t the only recipient of the mobile payment app infringement claim. Maxim Integrated also filed similar patent infringement suits against Expedia Inc. and Capital One Financial Group. According to paidContent.org,

The activities described in the patents seem to encompass activities inherent to any mobile payments operation. Moreover, Maxim is asserting them across different platforms. In its complaints, it singles out apps like “Expedia Hotels for Android” and “Capital One Mobile Banking for Android” in addition to iPhone and iPad apps.

With mobile payment apps available on a variety of smart phones and mobile technology devices, any consumer with the technology can partake in what seems to be an easy and efficient way to get off the line to pay and out the door with your purchase. Anyone who has waited on line at a Starbucks during the morning rush to work could be reasonably inclined to utilize Starbucks’ mobile payment app. It would be in Starbucks’ interest to attempt to settle the patent infringement claim, seeing as how the mobile payment app keeps customers coming back irrespective of the packed lines that fill its stores each morning. According to an article by James Wester,

The Starbucks mobile payment app was released last January and has been incredibly popular. As of late 2011 the company said the app had been used for more than 26 million transactions at the point of sale. The app employs a simple bar code linked to a prepaid account and read by scanners at the point of sale to make purchases at Starbucks locations. It proved so popular it was expanded to Canada late last year and just went live in the U.K. and Ireland on Jan. 5.

The developments of the patent infringement claim could likely end up in a settlement between Maxim Integrated and the companies they’re suing. Instead of outright banning the use of the mobile payment technology, it could be more lucrative to license the use of the patents so that Maxim Integrated would not lose out on its investment and Starbucks could keep using the apps that have become so popular, especially since it is now being used internationally.

(Source: Practising Law Institute)