3MFuture Africa litigation to drag on

While Cape Town-based technology firm, 3MFuture Africa is celebrating a landmark victory in the patent infringement lawsuit it brought against Standard Bank and MTN, it has warned that the battle is not yet over.

Last week, the Patent Court in Pretoria ruled that Standard Bank and MTN had infringed 3MFuture Africa’s payment card security technology patent.

The patent is a locally-developed innovation that allows users to switch their payment cards on and off with their mobile phones – thereby eliminating the problems of card cloning, skimming and theft.

According to 3MFuture Africa, Justice Tati Makgoka found that the technology was used by Standard Bank and MTN in their MTN Mobile Money Solutions joint venture until 13 January 2012, when the on/off functionality was disabled.

3MFuture Africa added that Judge Makgoka also granted the defendants a counterclaim and provisionally revoked the patent, giving the plaintiff a month to file an application to amend the patent.

“If the application is granted, the counterclaim and provisional revocation will fall away,” it said.

3MFuture Africa said the court ruling would enable the group to once again take its technology into the marketplace, and find suitable partners to implement it.

Further litigation

Dr Wolfram Reiners, director of 3MFuture Africa and co-inventor of the patented technology, alluded to further litigation in an interview conducted on Radio 702.

“The ruling as it stands is that three of the patent claims are valid and were infringed by Standard Bank and MTN. In the second stage of the litigation, there will be an enquiry into damages,” he said.

The patent suit originally had 25 claims, however the judge ruled on three.

3MFuture Africa highlighted the costly nature of the litigation process; however, it said it had litigation funding in place.

“We were forced to find guarantees running into millions of rands before we could even consider going to court, there was a long and expensive discovery process, and this trial ran well over the original two weeks set aside due to delays at the hands of the respondents,” Reiners said in a statement following the ruling.

He further told Radio 702: “3MFuture Africa secured litigation funding – the cost estimate on this litigation is well beyond R10 million. Thus far, in the first stage of the litigation, there is no financial compensation.”

The written judgment will be handed down on 11 September 2012.

Following the court ruling, Standard Bank and MTN issued out the following statements:

Standard Bank:

“We are pleased with the finding that the Plaintiff’s patent has been provisionally revoked, such revocation to become final unless the Plaintiff applies to amend the patent within one month. We are, however, disappointed by the finding that some of the claims of the Plaintiff’s patent have been infringed.”

MTN:

“MTN will review the written judgment once received from the judge and decide on next steps. The judge did not grant MTN and Standard Bank an order to apply to revoke the 3M Future patent, but an order provisionally revoking the patent, pending application for amendment of the patent by 3M Future Africa within one month of the judgment.”

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3MFuture Africa litigation to drag on