Visa 2010 Annual Report Download - page 136

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2010
(in millions, except as noted)
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 patent infringement. Plaintiff amended its complaint on September 27, 2007 to add Green Dot Corp. as a party and to
add a patent to its suit. The complaint now alleges that the defendants' "open" prepaid card products infringe five U.S. Patents held by the plaintiff. After the
court denied Visa U.S.A.'s motion to dismiss, 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 due to prosecution laches and inequitable conduct.
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, which was
affirmed by the Federal Circuit on April 30, 2009. The Federal Circuit denied Every Penny Counts's petition for rehearing on May 26, 2009 and issued its
mandate on June 2, 2009. Judgment was entered pursuant to that mandate on June 10, 2009. The U.S. Supreme Court denied Every Penny Counts's petition
for writ of certiorari on November 9, 2009.
TQP Development, LLC—Data Encryption
On March 25, 2009, TQP Development, LLC filed a lawsuit against Visa Inc., Visa U.S.A., Visa International and a number of other companies,
including American Express, MasterCard and Barclays, in the U.S. District Court for the Eastern District of Texas alleging that methods practiced on the
defendants' websites infringe U.S. Patent No. 5,412,730 ("Encrypted Data Transmission System Employing Means for Randomly Altering the Encryption
Keys"). On May 22, 2009, Visa answered the complaint and filed a counterclaim for a declaratory judgment that Visa is not infringing the patent and/or that
the patent is invalid. On December 21, 2009, the parties executed an agreement to settle the litigation, and the case was dismissed with prejudice on January 4,
2010. The settlement amount is not considered material to the consolidated financial statements.
Actus, LLC—Prepaid Cards
On April 9, 2009, Actus, LLC filed a lawsuit against Visa Inc. and a number of other companies in the U.S. District Court for the Eastern District of
Texas alleging that certain Visa prepaid products infringe U.S. Patent No. 7,328,189 ("Method and Apparatus for Conducting Electronic Commerce
Transactions Using Electronic Tokens") and U.S. Patent No. 7,249,099 ("Method and Apparatus for Conducting Electronic Commerce Transactions Using
Electronic Tokens"). On June 11, 2009, Visa filed a motion to dismiss plaintiff's claims. Actus filed a second amended complaint on August 17, 2009, to
address the issues raised in Visa's motion, and Visa and other defendants filed a renewed motion to dismiss on September 8, 2009. On April 21, 2010, the
parties executed an agreement to settle the litigation, and on April 30, 2010, the court dismissed the claims against Visa with prejudice. The settlement amount
is not considered material to the consolidated financial statements.
Joao Bock Transaction Systems—Transaction Security
On May 11, 2009, Joao Bock Transaction Systems of Texas, LLC filed a lawsuit against Visa Inc. and a number of other companies in the U.S. District
Court for the Eastern District of Texas alleging that certain Visa products and/or services infringe U.S. Patent No. 7,096,003 ("Transaction Security
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