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by Tim Sloane 0

The Home Depot’s efforts to enable its customers to pay using PayPal may have hit a snag, as PayOne has brought a patent-infringement lawsuit against the home-improvement retailer. And the suit could have broad implications.

PayOne, which also has filed a similar suit against PayPal in a separate case, claims the use of a mobile number and PIN to pay, as PayPal’s service supports, infringes on several PayOne patents. The company is seeking unspecified damages and a court injunction to prevent Home Depot from future infringement.

From Joe Lynam, PayOne president and CEO, in Mobile Commerce Daily:

“PayOne will continue to work with industry participants to help bring seamless mobile payments to market. … We will review what we believe to be ongoing infringement scenarios on a case by case basis and keep those options open. … While PayPal announced other major national retailers use of this technology, The Home Depot was the first to broadly deploy the technology at its in-store checkout.”

It’s always difficult to determine how patent cases will turn out, but if The Home Depot loses, it could have implications beyond just PayPal and its partners. Other mobile- and online-payments providers also use a shopper’s mobile number and PIN to facilitate payments, including Looped In and Sprint Mobile.

Not many PayPal customers reportedly use their mobile number and PIN to pay. Recognizing that many consumers may not be ready to shop using their phones at the point of sale, PayPal plans to issue some 50 million cards that ride on Discover’s network to its customers, and those cards will require a PIN to facilitate payments. It’s doubtful that PayOne also has a patent on PIN-based card transactions.

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