Visa 2007 Annual Report Download - page 162

Table of Contents
VISA U.S.A. INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
November 2, 2006, the parties entered an agreement to allow this judgment to become final without seeking any further amendment or appeal.
Starpay and VIMachine
On May 8, 2003, Starpay and VIMachine sued Visa U.S.A. and Visa International in United States District Court for the Northern District of Texas,
claiming that Visa used information provided to it by Starpay in 2000 to create VbV and to file a Visa patent application on the technology underlying VbV.
Two claims are asserted: infringement of VIMachine's patent and misappropriation of Starpay's trade secrets. In February 2006, each party filed objections to
the Magistrate Judge's recommendation on claim construction.
On September 10, 2007, the District Court issued an order resolving the parties' various objections and finalized the claim construction. The court has
set a schedule that calls for the completion of discovery by April 18, 2008 and the filing of any dispositive motions by May 16, 2008. No trial date has been
set.
Softcard Systems Inc.
In November 2003, Softcard Systems Inc. (Softcard) filed a complaint against Visa U.S.A. and Target Corporation (Target) in United States District
Court for the Northern District of Georgia. Softcard alleged that aspects of Visa and Target's smart card loyalty programs for cardholders infringed Softcard
patents related to electronic coupon programs. In December 2005, the case was dismissed pursuant to a settlement agreement that resolved all claims.
Every Penny Counts, Inc. – "Keep the Change"
On January 30, 2007, Every Penny Counts, Inc. filed a lawsuit in federal court in the Middle District of Florida against Bank of America Corporation
and Visa U.S.A. alleging patent infringement related to Bank of America's "Keep the Change" program. Bank of America has agreed to indemnify Visa
U.S.A. in this litigation and has taken over the defense of the lawsuit. On April 23, 2007, Every Penny Counts, Inc. voluntarily dismissed its claims against
Visa U.S.A.
PrivaSys
On June 20, 2007, PrivaSys, Inc. filed a complaint in the U.S. District Court for the Northern District of California against Visa International and Visa
U.S.A. for patent infringement. PrivaSys alleges that Visa U.S.A.'s contactless payment technology infringes U.S. Patent No. 7,195,154 ("the 154 patent"),
entitled "Method for Generating Customer Secure Card Numbers." Visa U.S.A. and Visa International filed their respective answers and counterclaims on
August 21, 2007 alleging that Visa did not infringe the 154 patent, that the 154 patent is invalid and that the patent is unenforceable due to inequitable conduct
and prosecution laches. On September 28, 2007, PrivaSys filed a motion requesting leave to file an amended complaint adding J.P. Morgan Chase and Wells
Fargo as defendants. Visa U.S.A. and Visa International opposed this motion on October 26, 2007 and asked the court, in the alternative, to stay all
proceedings against Visa member banks pending resolution of the issue of whether the Visa technology infringes the PrivaSys patent. On November 14, 2007,
the court granted PrivaSys's motion for leave to file the amended complaint. On December 5, 2007, Visa U.S.A. filed an answer to the amended complaint.
The parties have reached an agreement in principle to settle the dispute.
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