Visa 2008 Annual Report Download - page 192

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2008
(in millions, except as noted)
AAA Antiques Mall
On November 13, 2007, a putative class action lawsuit was filed in Maryland state court against Visa U.S.A., MasterCard Worldwide, and Discover
Financial Services. Plaintiff AAA Antiques Mall, Inc. alleges that "credit card fees" assessed by defendants as to the state tax portion of a sales transaction
constitute unjust enrichment and/or intentional misrepresentation.
On February 1, 2008, Visa U.S.A. filed a motion for summary judgment, or, in the alternative, motion to dismiss all claims brought against it. The court
granted Visa U.S.A.'s motion and dismissed the case against all defendants on June 12, 2008.
Hill Country Custom Cycles
Robert Smith, individually and doing business as Hill Country Custom Cycles, filed a putative class action lawsuit against Visa Inc., several banks, and
a processor in U.S. District Court for the Central District of California on June 4, 2008. The plaintiff alleges that, due to fluctuations in currency conversion
rates, a transaction disputed by a cardholder and ultimately charged back to a merchant by its acquiring bank (a "chargeback") may result in a debit to a
merchant's account in excess of the original transaction amount. The lawsuit asserts claims under federal and state antitrust law and a variety of common law
claims, including fraud and breach of contract. On October 14, 2008, Visa Inc. filed a motion to dismiss all claims brought against it.
Venezuela Interchange Proceedings
On October 2, 2008, the Superintendencia para la Promoción y Protección de la Libre Competencia (Competition Authority) of Venezuela filed an
administrative proceeding against "Visa Inc. International" (sic), MasterCard, American Express, Diners Club, Consorcio Credicard, and more than thirty
privately held financial institutions. The Competition Authority alleges that, among other things, the defendants' setting of default interchange rates and
merchant discount rates violates Venezuelan competition law. The Competition Authority seeks monetary and injunctive relief. At this early stage, it is not
possible to make any reasonable evaluation of the claims alleged.
Intellectual Property Litigation
Cryptography Research
On September 29, 2004, Cryptography Research, Inc. ("CRI") filed suit against Visa International in U.S. District Court for the North District of
California asserting claims for breach of contract, misrepresentation, and infringement of eight U.S. patents. These causes of action are based upon CRI's
allegations that Visa International has improperly used, or induced others to use, technology allegedly developed by CRI for securing "Smart Cards" against
attacks designed to discover secret information, such as the secret key for performing cryptographic operations. On March 7, 2005, CRI filed an amended
complaint identifying claims for breach of contract, misrepresentation, fraud in the inducement and infringement of the eight Patents in Suit. The breach of
contract, misrepresentation and fraud in the inducement claims stem from a September 2, 1998 Intellectual Property License Agreement between CRI and
Visa International. The license agreement granted Visa International worldwide rights to CRI's patent applications that ultimately matured into the Patents in
Suit.
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