The patent was filed with the US Patent and Trademark Office in
1991, and granted to AT&T in July 1994. It covers specifically
transactions in which a trusted intermediary securely processes
payments over a communications system such as the internet.
The use of a trusted intermediary ensures that one party will
not have to disclose sensitive information, such as a credit card
number or bank account number, to the other party to the
transaction.
PayPal and eBay were advised by AT&T over a year ago that
their payment systems were infringing on the patent. EBay's system,
BillPoint, has now been phased out following eBay's acquisition of
PayPal, but generated "significant revenue" in the time that it was
running.
Both companies have refused to pay for a license in respect of
the patent – so AT&T says it has been "forced to bring the
matter to court," seeking compensation.
