A Preliminary USPTO Decision Supports ReD in Patent Dispute

Retail Decisions PLC says the U.S. Patent and Trademark Office has issued what it calls a “preliminary decision” that supports ReD's position in a patent dispute between the company and Mountain View, Calif.-based CyberSource Corp. U.K.-based ReD includes its U.S. unit, Retail Decisions U.S.A., Hazlet, N.J. The USPTO statement, which is not a final decision, agrees with Retail Decisions that prior art renders invalid a patent held by CyberSource, number 6,029,154 (“Method and System for Detecting Fraud in a Credit Card Transaction Over the Internet), according to ReD. CyberSource has claimed in a lawsuit filed last August that a ReD product violated the patent. ReD responded to CyberSource's suit by requesting a review of the patent by the USPTO (Digital Transactions News, Jan. 5). The patent office's procedures allow CyberSource to respond to this preliminary decision, and the company would have the right to appeal any final decision. A CyberSource spokesman said today that the company won't comment on the USPTO decision, citing a policy against commenting on pending litigation. Both companies compete in the business of providing fraud-management services and transaction processing for online merchants. CyberSource filed its suit in U.S. District Court for the Northern District of California, claiming that one of ReD's products, ebitGuard, violated its patent. CyberSource applied for the patent in July 1997 and it was granted in 2000. Its suit asks the court for an injunction against ReD as well as for compensatory damages and treble damages for “willful infringement.”