Patent Suit Targets Companies Using Tokens as Micropayments

WASHINGTON — Playboy Enterprises Inc. and 29 mainstream companies are embroiled in patent infringement litigation over online technology involving the use of electronic tokens and related software programs to make the tokens function as micropayments.

The suit, waged earlier this year, should be closely watched in the online adult industry because, in the case of Playboy, the claims directly target its pay-by-minute video-on-demand products. (Since the suit was filed Playboy has licensed out its online business.)

Some of the other companies in the suit have been hit with charges of infringing on the intellectual property via mobile payments, as well as e-gift cards.

The 30 defendant companies are alleged to have infringed on two related patents: U.S. Patent Nos. 7,177,838 and 7,376,621.

Both patents are similar in nature and are described to function as a "method and apparatus for conducting electronic commerce transactions using electronic tokens."

Besides Playboy, other companies named in the suit filed by patent holding company Abridge Technology include Metro PCS Communications Inc., Mopay Inc., NCSoft Corp., Nexus Payment Systems, P.F. Chang's China Bistro Inc., Perfect World Entertainment Inc., Pex Card, Plastyc Inc., Precash Inc., Prepaid Technologies LLC, Ready Financial Group, Regions Financial Corp. , Southwest Airlines Co., Staples Inc., SVM LP, Toys R Us Inc., USA Paycard Inc., Wells Fargo & Co., AccountNow Inc., Arroweye Solutions Inc., BB&T Corp., Boku Inc., Cashstar Inc., Compass Bancshares Inc., Doctor's Associates Inc. (Subway), Echovox Inc., Facebook Inc., IMVU Inc. and J.C. Penney Co.

The 30-defendant suit has been filed at U.S. District Court in Marshall, Texas.

The federal court in Marshall is a popular one for patent lawsuits.Attorneys say that quick trials and plaintiff-friendly juries are the big draw there. So are the Texas-sized verdicts sometimes handed to winners.

Patent cases are heard faster in Marshall than in many other courts, forcing some defendants to buckle under the pressure of time when trying to sort out complex infringement cases.

And while only about five percent make it to trial in Marshall, patent holders win 78 percent of the time, compared with an average of 59 percent nationwide, according to LegalMetric, a company that tracks patent litigation.