New Patent Suits Target Starbucks, Expedia Mobile Payments

In a possible sign of trouble for the booming mobile payment industry, a semiconductor firm filed patent lawsuits against Starbucks (NSDQ: SBUX), Expedia and Capital One over applications like “Starbucks for iPhone.”
The patents in question are owned by Maxim Integrated, a California semiconductor company, and describe basic mobile payment actions. For instance, US Patent 5949880 was issued in 1997 and describes a method:

for enabling a user to fill a portable module with a cash equivalent and to spend the cash equivalent at a variety of locations

The company is also asserting three other patents against the defendants, including one from 2000 in which an:

electronic module 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. The module is capable of being programmed, keeping track of real time, recording transactions for later review, and creating encryption key pairs.

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.
Maxim is a public company that reported $2.5 billion in 2011 revenues. A spokeswoman said it has a “strong presence” in smart phones and tablets and that 30% of its chip business is consumer facing. The company acquired the patents when it bought Dallas Semiconductor in 2001.
The company filed the three lawsuits last week in federal court in East Texas. The Maxim spokeswoman said she could not immediately confirm if the company was going to sue other firms that offer mobile payment options.
Starbucks was an early adopter of mobile payments and attracted buzz last year for its app which allows people to pay for coffee and collect rewards by holding their phone up to an in-score scanner.
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