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Fiserv Must Face Claim Over Patent for Check-Fraud Prevention

Fiserv Inc. (FISV), the manager of check- processing and cash machines, will have to defend itself again in a patent-infringement lawsuit brought by Advanced Software Design Corp. after an appeals court revived the case.

A trial judge erred in her reasoning when she said Brookfield, Wisconsin-based Fiserv wasn’t infringing an Advanced Software patent, the U.S. Court of Appeals for the Federal Circuit in Washington said in an opinion on its website today. The case was remanded to the lower court for review.

The patent covers a way to encrypt and decrypt checks to prevent fraud. Closely held Advanced Software, based in Richmond Hill, Ontario, filed the lawsuit after licensing negotiations failed, according to the opinion. The companies offer competing products that encrypt selected information on a check that can be matched with visible data.

The three-judge panel of the court also said the trial judge erred in her interpretation of a key term describing the invention. It dismissed Fiserv’s appeal of a ruling that rejected challenges to the validity of the patent, saying that issue hadn’t been fully resolved by the lower court and so wasn’t subject to appellate review.

The case is Advanced Software Design Corp. v. Fiserv Inc., 2009-1585 and 2010-1011, both U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Advanced Software Design Corp. v. Federal Reserve Bank of St. Louis, 07cv185, U.S. District Court, Eastern District of Missouri (St. Louis).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net.

To contact the editor responsible for this story: Allan Holmes at aholmes25@bloomberg.net

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