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Court sets date to hear chip card patent infringement case against Visa, MasterCard

The case of SmartMetric v. Visa and MasterCard will test the recent Supreme Court ruling that abstract ideas cannot be protected by patents.

June 30, 2014

A Federal Circuit Court has set a date of Aug. 8 to hear arguments in the patent infringement case SmartMetric Inc. v. MasterCard International and Visa Inc., according to a press release from SmartMetric.

This will be one of the financial services industry's first cases to apply the recent Supreme Court ruling that abstract ideas cannot be protected by patents.

The SmartMetric case involves the alleged infringement of U.S. patent 6,792,464, "System for automatic connection to a network," owned by SmartMetric. The company claims that the networks are violating its patent (which applies only to U.S. transactions) with their use of chip cards, which automatically trigger a network connection.

A lower court held that Visa and MasterCard were in violation of the patent in respect to both contact and contactless transactions. However, an appeals court ruled that the patent language did not cover contactless transactions.

Appeals judges sent the question of contact card infringement back to the lower court for re-adjudication.

SmartMetric is seeking damages of $13.4 billion from Visa and MasterCard.