Visa 2008 Annual Report Download - page 195

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2008
(in millions, except as noted)
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 & Co. and Wells Fargo & Co. 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 issuing financial institutions 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 reached an agreement in principle to settle the dispute in December 2007. In light of this agreement, on January 9, 2008 the court dismissed
the case with prejudice, provided that the settlement is finalized within 90 days of the dismissal. The parties executed the final settlement agreement in
February 2008. The amount of the settlement is not material to the Company's financial statements taken as a whole.
Every Penny Counts, Inc.—Prepaid Cards
On July 17, 2007, Every Penny Counts, Inc. filed a complaint in the U.S. District Court for the Middle District of Florida against Visa U.S.A.,
MasterCard and American Express for infringement of four of its patents. Plaintiff amended its complaint on September 27, 2007 to add Green Dot Corp. as a
party and to add a fifth patent to its suit. The Complaint now alleges that the defendants' "open" prepaid card products infringe U.S. Patent No. 5,621,640
("Automatic Philanthropic Contribution System"). U.S. Patent No. 6,112,191 ("Method and System to Create and Distribute Excess Funds from Consumer
Spending Transactions"). U.S. Patent No. 6,088,682 ("Funds Distribution System Connected with Point of Sale Transactions"), U.S. Patent No. 6,876,971
("Funds Distribution System Connected with Point of Sale Transaction") and U.S. Patent No. 7,171,370 ("Funds Distribution System Connected with Point of
Sale Transactions"). Visa U.S.A. filed a Motion to Dismiss, or in the Alternative for a More Definite Statement, based on the plaintiff's failure to identify
which products or services offered by Visa U.S.A. purportedly infringe which of the plaintiff's patents on October 12, 2007. The court denied the motion on
October 29, 2007. On November 13, 2007, Visa U.S.A. filed its answer and counterclaims alleging that Visa does not infringe the plaintiff's patents, that the
plaintiff's patents are invalid, and that the plaintiff's patents are unenforceable to prosecution laches and inequitable conduct. The court issued an order on
December 13, 2007 setting procedural deadlines for the claim construction and scheduling a Markman hearing in May 2008.
At a claims construction hearing on May 22, 2008, the court ruled in favor of defendants on all five of plaintiff's patents. In light of this ruling, plaintiff
orally agreed to a stipulated judgment in favor of all defendants on all claims. The court entered judgment for all defendants on May 23, 2008. On June 18,
2008, plaintiff filed a notice of appeal to the U.S. Court of Appeals for the Federal Circuit.
Note 24—Subsequent Events
In October of 2008, the Company redeemed of 79,748,857 shares of class C (series II) common stock and 35,263,585 shares of class C (series III)
common stock held by Visa Europe for a combined total $2.7 billion, less dividends and certain other adjustments. See Note 4—Visa Europe and Note 16—
Stockholders' Equity and Redeemable Shares.
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