Did Apple really steal trade secrets from Fintiv?

Apple has not had the best times in recent months, especially where its AI efforts are concerned. Now, the firm is getting sued over its Apple Pay, compounding problems like getting its talent poached by Mark Zuckerberg’s open purse, stalling the iPhone maker’s AI progress. 

Apple now has to deal with a Texas-based company, Fintiv, that just slammed it with a lawsuit filed in Atlanta federal court, accusing the tech giant of using stolen trade secrets to develop Apple Pay.

Did Apple really steal trade secrets?

According to Fintiv’s claims, Apple Pay’s core features have their foundations rooted in a technology developed by CorFire, a company Fintiv acquired in 2014.

According to the complaint, Apple allegedly had multiple meetings with CorFire between 2011 and 2012, even entering nondisclosure agreements to explore licensing CorFire’s mobile wallet technology as it sought to capitalize on the rapidly growing demand for contactless payments.

Fintiv alleges Apple backstabbed CorFire by instead using the confidential information it received and reportedly hiring critical CorFire employees to work on Apple Pay in 2014.

The product has been rolled out and has been so successful that it has evolved into an enterprise Apple uses to generate fees for credit card issuers such as Bank of America, Capital One, Citigroup, JPMorgan Chase, and Wells Fargo, and the payment networks American Express, Mastercard, and Visa.

Fintiv says it keeps up the charade by “fraudulently advance[ing] the false narrative that it is the developer of Apple Pay” and that those relationships with the companies that formed the enterprise have led to “unlawful conduct” on a “staggering” scale.

The lawsuit seeks compensatory and punitive damages for violations of federal and Georgia trade secret laws, as well as RICO violations. Apple is the only defendant.

“This is a case of corporate theft and racketeering of monumental proportions,” enabling Cupertino, California-based Apple to generate billions of dollars of revenue without paying Fintiv “a single penny,” the complaint read.

Fintiv has been in a legal tussle with Apple for years now

Fintiv’s lawyer Marc Kasowitz has tagged Apple’s conduct “one of the most egregious examples of corporate malfeasance” he has witnessed in almost five decades of law practice. The latest lawsuit is not the first time that Fintiv has initiated legal action against Apple, alleging shady moves.

According to the company, the theft is part of a pattern that Apple has engaged in for years, and Kasowitz and Fintiv claim those misappropriations are not limited to trade secrets.

They claim Apple appears like it wants to “partner” with companies to get access to confidential and proprietary information. Next, it lures away key employees, ultimately stealing the company’s valuable intellectual property and using it to commercialize the business on its own.

Fintiv cited similar partnership schemes between Apple and Masimo over blood oxygen monitoring technology and with biotech company Valencell, Inc. over heart-monitoring technology.

Fintiv’s legal crusade against Apple can be traced back to 2018, when it filed a complaint against Apple over one of its mobile wallet-related patents.

That case was dismissed earlier this week after a judge ruled Apple had not infringed on certain patents. Fintiv has plans to appeal the dismissal as it waits for Apple’s response to the latest lawsuit.

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