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Intellectual property dispute finally settled for Square

Paying for goods and services by swiping a credit card through a plastic attachment on a cell phone has become so ubiquitous that it might be difficult to imagine any type of controversy surrounding the process. Behind the scenes, though, the founders of Square Inc. have been embroiled in an ongoing dispute with an engineer and his company, REM Holdings 3. The intellectual property dispute did not appear to impact Louisiana businesses who use the Square software.

Square was founded by Jim McKelvey and Jack Dorsey. McKelvey apparently lost out on a sale at his business for glass art when he was unable to process a credit card, leading him to seek some type of more reliable alternative. He and Dorsey first discussed developing a smart phone card reader in 2008 before approaching Robert Morley Jr. — a long-time entrepreneur — to develop a prototype in 2009.

The legal troubles started a short while later, when a 2010 lawsuit filed by Square claimed that Morley’s company failed to properly include McKelvey on a patent for the device. A 2014 suit filed by Morley alleged that McKelvey and Dorsey had unfairly cut him out of the picture even though he had developed the key piece of software for Square’s success. He also said that Square had given him the opportunity to act as a Square co-founder, a claim that Dorsey and McKelvey both refuted.

Square was denied a summary judgement earlier in 2016, but a $50 million settlement was listed as part of the earnings for a recent quarter. Square and REM Holdings also signed a binding term sheet regarding the intellectual property dispute. These types of disputes can be understandably difficult and emotionally taxing, but Louisiana business owners who successfully follow through with their legal action can achieve just compensation for wrongful use of their property.

Source:, “Settlement finalized in Square invention dispute“, Lisa Brown, June 14, 2016