I read with some dismay recently about the advancing patent application of Card Activation Technologies, a publicly traded Pink Sheets company under the ticker CDVT.
Card last month was issued a “notice of intent to issue reexamination certificate” on a patent “covering the processing of debit purchase transactions, such as purchases using gift cards.” Card is already “actively enforcing” this patent, which means it is suing companies and “entering into licensing agreements with numerous other retailers.”
What irks me about this and other financial services patents is that they are so easily used to squash competition. A financial services entrepreneur told me the story of how a major US bank threatened him with a patent lawsuit if he did not give the bank equity in his startup — and that bank wasn’t even granted a patent for the product/process in question!
To me, this smacks of legal blackmail, and we’ve seen countless other examples of the use of lawsuits to quash banking innovations. Is there is a resolution to this? Probably not, because not all banking patents are evil. Not all; just most.