In one of the most explosive technology lawsuits in recent memory, mobile wallet company Fintiv, Inc. has sued Apple, Inc. for RICO (racketeering) violations and misappropriation of trade secrets. Although Fintiv already has a patent infringement lawsuit pending against Apple in federal court, Fintiv has doubled down on its war against Apple with this latest allegation to intellectual property theft. Fintiv’s complaint, filed in federal court in Georgia, paints a picture of a decade-long scheme by Apple to secretly steal and monetize Fintiv’s mobile payment technology, technology that Fintiv claims helped catapult Apple’s market cap from $296 billion to about $3 trillion.
What Is Fintiv Claiming?
According to the complaint, Apple met with CorFire (Fintiv’s predecessor) in 2011 and 2012 under the pretense of entering into a business partnership. During these meetings, subject to non-Disclosure Agreements, Fintiv shared trade secret information on its mobile wallet systems, including widgets that represent physical cards, near-field communication (NFC)-enabled mobile wallet technology, and provisioning credit card credentials on a secure element chip on a phone.
Fintiv says Apple had no intention of partnering, but instead took the technology and used it to build and launch Apple Pay in 2014. The company even hired away two key CorFire employees, including the one who attended all six confidential meetings with Apple.
The Alleged RICO Scheme
Fintiv isn’t just suing for trade secret misappropriation. It is also invoking the federal and Georgia RICO statutes, accusing Apple of setting up a fraudulent enterprise to convert its stolen technology into profit. The alleged scheme includes Apple’s partnerships with Visa, Mastercard, and major banks like JPMorgan and Wells Fargo. Together, the complaint claims, these entities formed what Fintiv calls the “Apple Pay Payment Enterprise” a group designed to generate tens of billions in fees annually from the use of Apple Pay built on stolen tech.
Apple Pay reportedly now processes over $6 trillion in transactions annually and accounts for a large share of Apple’s nearly $400 billion in annual revenue.
A Pattern of Conduct?
Fintiv alleges that Apple has made a habit of this kind of behavior. The complaint outlines similar alleged schemes to misappropriate trade secrets from Masimo Corp. and Valencell Inc., both of which claim Apple feigned interest in partnerships only to steal valuable intellectual property and integrate it into products like the Apple Watch.
Why This Case Matters
This lawsuit could have massive implications not just for Apple but for how tech giants deal with startups. Fintiv is asking for treble damages, attorneys’ fees, and potentially a share of the billions Apple has earned through Apple Pay over the past decade.
If the court finds that Apple did, in fact, build its Apple Pay empire on stolen technology, it could crack open not just a damages award, but new regulatory scrutiny, not to mention a potential chilling effect on other Big Tech partnerships with startups.
Final Thought
This case serves as a reminder that when a multibillion-dollar corporation asks to “partner” with you, get an NDA written, or at least approved, by your intellectual property lawyer. Just because a company has a pristine reputation does not mean they will play fair with you. In tech, as in life, trust but verify.
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