PayPal transfers $7.5 Million to Vancouver company in patent dispute
Yesterday LML Patent Corp. Inc., a fully owned U.S. subsidiary of Vancouver-based LML Payment Systems Inc., announced they will receive $7.5 million after settling patent disputes with PayPal. The settlement and licence agreement is payment to allow PayPal to use LML's technology for electronic cheque conversion transactions.
Many of our readers may not be familiar with LML, but you've likely heard of their main subsidiary - Beanstream Internet Commerce. In 2007 LML acquired Victoria's Beanstream - a provider of authentication and Internet payment processing solutions.
At first glance this is great news for the Vancouver company. But if you dig a little deeper, you'll see that LML is hardly new to collecting on patent infringements.
LML had filed a lawsuit in the Texas court alleging 25 banks and payment processors had infringed a patent related to LML’s system. The lawsuit alleges theses companies infringed a patent related to a point-of-sale system, which is designed to read information from a cheque or credit card and verify the customer has an appropriate balance.
Including the PayPal settlement announced yesterday, LML has collected $28 Million to date from seven banks and payment processers settling patent disputes. In addition to PayPal, the following have settled.
- Mar. 4, 2011 - $7.5 Million from Citigroup
- Mar. 3, 2011 - $5.5 Million from HSBC Holdings PLC
- Nov. 22, 2010 - $1.315 Million from Regions Bank, Fifth Third Bank and Marshall & Ilsley Bank
- Oct. 8, 2010 - $5.15 Million from The Bank of New York Mellon and First National Bank of Omaha
- Oct. 4, 2010 - $695,000 from M&T Bank Corporation
- Aug. 9, 2010 - $1.2 Million from Union Bank N.A.
With 18 banks and payment processors yet to settle and an average settlement of $4 Million, at the end of the day this lawsuit could be worth over $100 Million to LML.
It shouldn't come as a surprise that some accuse LML of being a patent troll but 14 years is a long time to wait to cash in.
