Mobile payments startup Square’s origins have been thrown into dispute after a Washington University in St. Louis professor has filed a law suit alleging fraud patent infringement.
Professor Robert E. Morley has alleged that Square’s founders, Twitter chairman and co-founder Jack Dorsey and James McKelvey, froze Morley out from the business.
The complaint reads: “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.”
Morley also argued that the three originally formed a joint venture to focus on mobile payments, but then Dorsey and McKelvey formed a new firm and shut Morley out.
Aaron Zamost, a spokesman for Square, said: “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.”
Square has attracted $341m in venture funding, including from firms such as Visa and Starbucks as well as British businessman Richard Branson. It was at $3.25 billion at the last funding round in 2012, and it is tipped to hold an initial public offering during 2014.
