Square sued by professor who claims he invented card reader

January 30, 2014
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A lawsuit has been filed against the founders of mobile payment operator Square, Jack Dorsey and Jim McKelvey. The suit alleges patent infringement, as well as breach of fiduciary duty. Filed by a professor in St. Louis, it’s not the first time Square has heard this argument.


Dr. Robert Morley of Washington University claims he invented the dongle Square uses to accept payments via credit card. He also claims he came up with version 1.0 of the technology, and has been denied founder’s credit or any equity in Square as a result of his efforts. This isn’t new territory, though. Morley began his pursuit in 2009, and his newest foray into legal waters with Square are an echo of the past.

The suit alleges that “The business now known as Square was not created solely by Jack Dorsey and James McKelvey. It was Professor Robert Morley — and Dr. Morley alone — who invented the Square card reader, and Dr. Morley co-invented the corresponding magnetic stripe decoding algorithms of the Square app”. It goes on to note that Dorsey and McKelvey started Square “with the goal of entering the mobile credit card transaction industry using Dr. Morley’s invention”. Dr. Morley also asserts that Dorsey and McKelvey later dissolved the three-way partnership to start Square without him.

A Square spokesperson told CNET “It’s not surprising that Morley would file another desperate, baseless patent lawsuit given how poorly his initial claims have been received by the patent authorities. We will fight it vigorously.” They did the same in 2009, when they countersued Morley, claiming McKelvey was left off a patent that had to do with the aforementioned card reading device. It looks like Square has their nemesis, and his name is Dr. Morley.

VIA: CNET


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