Apple was sued on Thursday by a Texas-based company called Fintiv, which accused the iPhone maker of stealing its technology to create its lucrative mobile wallet Apple Pay. In a complaint released Thursday, Fintiv said Apple Pay's primary functionality is based on technology developed by CorFire, which Fintiv acquired in 2014. Apple Pay is currently used by hundreds of millions of iPhones, iPads, Apple watches and MacBooks around the world.
Austin, Texas-based Fintiv said Apple held multiple meetings and entered into a nondisclosure agreement with CorFire in 2011 and 2012 aimed at licensing its mobile wallet technology to capitalize on rapidly growing demand for contactless payments.
Instead, Apple used the technology and trade secrets to launch Apple Pay in the United States and dozens of other countries starting in 2014, with the help of CorFire employees it poached, the complaint alleges.
Fintiv also said Apple led an informal extortion enterprise by using Apple Pay to collect fees from credit card issuers such as Bank of America, Capital One, Citigroup, JPMorgan Chase and Wells Fargo, as well as payment networks such as American Express, Mastercard and Visa.
The complaint alleges that "this was a massive case of corporate theft and fraud" in which Apple reaped billions of dollars in revenue without paying "a penny" to Fintiv.
Fintiv attorney Marc Kasowitz called Apple's behavior "one of the most egregious acts of corporate malfeasance" he has seen in his 45 years as a lawyer.
In a lawsuit filed in federal court in Atlanta, Fintiv seeks compensatory and punitive damages from Apple for violations of U.S. federal and Georgia trade secret and anti-fraud laws, including RICO.
Apple is the only defendant in the case. CorFire is headquartered in Alpharetta, Georgia, a suburb of Atlanta.
Court records show that on August 4, a federal judge in Austin dismissed Fintiv’s related patent infringement lawsuit against Apple, four days after some of Fintiv’s claims were dismissed.
Fintiv agreed to dismiss the verdict and planned to "appeal based on the existing record," records show.