PayPal Inc. has paid LML Patent Corp., a wholly owned, indirect subsidiary of LML Payment Systems Inc., $7.5 million to settle a patent dispute that stemmed from an infringement complaint involving 19 other financial institutions.
LML, which announced the settlement Friday, filed the complaint in 2008.
It claimed that the financial institutions infringed on its technology that can "read information from a consumer's check, credit card or manual input with a subsequent debiting of a consumer's account and crediting a merchant's account for goods or services provided," according to court documents from the U.S. District Court in Eastern Texas.
PayPal, a subsidiary of eBay Inc., receives a fully paid-up license to certain patents for electronic check-conversion transactions as part of the settlement, according to LML's press release.
LML, of Vancouver, British Columbia, said it also has settled litigation with nine other financial institutions, including Citigroup Inc. and HSBC Holdings PLC.
PayPal, of San Jose, Calif., did not comment on the settlement.
LML did not respond to a request for comment.
LML provides payment processing for both e-commerce and brick-and-mortar retailers. Its recent settlements canceled the patent trial's first phase, which was scheduled to begin March 21, the company said in a press release. Two more trial phases still are scheduled to begin in October.
