Visa charged with stealing trade secrets

Visa USA and a credit-card transaction processing company are in court battling over whether Visa tried to steal trade secrets by hiring seven information systems professionals from the processing company. Those trade secrets, claims Deluxe Data Systems (DDS), include information about software that DDS has been developing for Visa. The software would let the credit-card giant process transactions involving debit cards.

Visa USA and a credit-card transaction processing company are in court battling over whether Visa tried to steal trade secrets by hiring seven information systems professionals from the processing company.

Those trade secrets, claims Milwaukee-based Deluxe Data Systems (DDS), include information about software that DDS has been developing for Visa. The software would let the credit-card giant process transactions involving debit cards.

The DDS lawsuit, filed January 17 in Milwaukee County Circuit Court, seeks to permanently block any of the seven employees from helping Visa develop debit-processing software. If Visa had such software in-house, it could perform the transactions itself without relying on outside providers such as DDS, Visa officials said.

DDS so far has won a temporary restraining order blocking such work. Hearings were held this week on whether to make the order permanent.

Officials at DDS and the company's lawyers weren't available for comment. Visa officials have said DDS' claims "lack merit." In a counterclaim, Visa charged that DDS had threatened to sue several employees who said they were leaving to join Visa. Visa also charged that DDS had failed to supply all the software and services it had promised to Visa, although Visa has paid DDS US$6.5 million for the work.

Visa claims that a software licensing agreement between it and DDS gives Visa the right to use DDS' Advantage software to offer debit-processing services.

"Visa had viewed that licensing agreement as an alliance with [DDS] that would provide Visa's member financial institutions with enhanced processing capability for Visa check cards and other debit-processing services," said a Visa spokesman.

That agreement, by letting either Visa or DDS use Advantage to offer debit-processing capabilities to the market, would provide "financial institutions with two strong processing alternatives," the spokesman said. "We are disappointed that [DDS] has taken this action, which may impede both Visa and [DDS] from achieving that goal."

Join the newsletter!

Error: Please check your email address.
Show Comments
[]