Person-to-person payment operator PayPal says it will defend itself against a patent infringement lawsuit filed by First USA Bank.
The lawsuit, filed last week in a US district court in Delaware, alleges PayPal's e-mail-based funds transfer system infringes two First USA patents for a "cardless payment system", which enables consumers to pay for transactions using a telephone number and a security code.
PayPal, which is being acquired by online auction company eBay, says it will fight the allegations, which it describes as groundless. The company adds that one of the First USA patents in question was lodged after PayPal had launched its service.
First USA, a major Visa card issuer owned by Bank One, is not commenting on the suit.