[Exclusive] Shinhan Card-Pax Money 'Technology Theft' Lawsuit Ends After 4 Years

The lawsuit concerning allegations of technology theft that lasted about four years between Shinhan Card and fintech startup Paxmoney has come to an end.

According to the financial sector on the 1st, Shinhan Card and Paxmoney recently withdrew the patent infringement injunction and damages claim lawsuit that had been ongoing between the two parties. A Shinhan Card official stated, "Last month, both parties mutually withdrew the lawsuits they had filed, thus legally resolving the issue," adding, "Going forward, the focus is on building a good business relationship together."

Paxmoney filed a patent application in 2007 for a "P2P payment system between credit cards." This is a payment system where even without a bank account balance, one can send money for occasions such as congratulatory or condolence payments to others using a credit card, and the payment amount is deducted from the recipient's card payment.

The financial authorities did not approve Paxmoney's system, citing concerns about illegal activities such as 'card kkang' (illegal cash advances). As a result, Paxmoney was unable to operate its business for about three years but later prepared for commercialization through a government authoritative interpretation.

The dispute between Paxmoney and Shinhan Card arose in 2019 when Shinhan Card launched the 'My Remittance' service, designated as an innovative financial service, which was similar to Paxmoney's P2P payment technology. In March 2020, Paxmoney applied for mediation to the Small and Medium Business Technology Dispute Mediation Committee, but it failed due to Shinhan Card's refusal.

Subsequently, in May 2021, Paxmoney filed a patent infringement injunction and damages claim lawsuit against Shinhan Card. Paxmoney alleged that Shinhan Card's credit card-based service 'My Remittance' was similar to Paxmoney's 'P2P payment system between credit cards' and raised suspicions of plagiarism. At that time, Shinhan Card argued that it could not accept Paxmoney's claims, stating that the remittance structure using cards was a popularized technology utilizing the existing card payment system.

Separately, Shinhan Card filed a patent invalidation trial in September 2020, arguing that the patent registered by Paxmoney in 2007 should be invalidated. In 2022, the Patent Court ruled in the second trial to cancel the decision of the Patent Office to revoke the patent registration, judging that Paxmoney's registered patent was valid. However, Shinhan Card appealed to the Supreme Court in January last year, dissatisfied with the cancellation ruling.

Meanwhile, SY Polaris, an online credit card payment security solution specialist, filed a complaint with the Suwon District Prosecutors' Office on September 30, accusing Shinhan Card of illegally copying the program source code related to its 'Safe Click Solution.' The charges include violations of copyright law, among others.