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Bank Of America & Wells Fargo Win Antitrust Appeal

 |  August 31, 2022

Bank of America Corp. and Wells Fargo & Co. escaped antitrust litigation over claims they engineered an industry group’s patent challenge as an end run around a settlement, when a federal appeals court in Philadelphia rejected the allegations Wednesday.

The US Court of Appeals for the Third Circuit ruled for the banks in an unpublished opinion by Judges Stephanos Bibas, Theodore A. McKee, and L. Felipe Restrepo. The ruling upheld a decision by Judge John M. Vazquez, who threw the case out of a federal district court in Newark, N.J.

The lawsuit, filed in 2017, targeted the two banks, industry group Clearing House Payments Co., and its subsidiary Askeladden LLC. Clearing House is allegedly co-owned by 25 financial institutions, including BofA and Wells Fargo.

The suit accused the banks of breaching an earlier settlement with Verify Smart Corp., which develops multi-factor authentication technology, by pushing Askeladden to challenge one of Verify’s key patents. The move allegedly succeeded in invalidating the patent.

Vazquez tossed the case in April 2019 from the US District Court for the District of New Jersey. He dismissed claims that the banks dominated Askeladden through their small stakes in Clearing House or their board seats at the industry group.

The Third Circuit affirmed in a five-page ruling.

“While we agree with the district court that the timing of Askeladden’s patent challenge was ‘suspicious,’ we also agree that the LLC agreement actually shows the banks do not control which patents Askeladden challenges,” the appeals court wrote.

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