December 17, 2009
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News: Square Accused of Stealing Technology
It looks like Twitter co-founder, Jack Dorsey, will have some legal battles to sort through before he's able to continue plans on the cellular phone credit card payment processing device called Square. Just a few short weeks after Dorsey announced that his Square credit card processing program is ready to start-up, a Washington University associate professor of electrical engineering is making claim to the device's technology. Bob Morley said he designed the Square credit card reading device and that he has filed for a patent. Morley claims it was his idea and that he designed and assembled the first working prototype.
Morley claims to be a close friend of Square's co-founder and Chairman, Jim McKelvey's family through Washington University where the senior McKelvey was on the faculty and Jim McKelvey himself was an engineering student. Morley had been working on a project to protect consumers against credit card fraud. McKelvey, a glass artist, was looking for a way to sell his wares with a portable credit card reader. In response, Morley designed the prototype which Dorsey and McKelvey call the Square.
Morley gives credit where credit is due by saying that several other individuals have contributed to the finished product which turns an iPhone into a credit card processor. He also says he didn't contribute to the design of the application that controls the device, but rather just the technology for scanning the card's magnetic strip and converting it to an audio signal for which he filed a patent on in June. It was his intention to work with Dorsey and McKelvey to contract the device in exchange for part ownership in the company. Negotiations fell through. Square maintains that they are not using Morley's technology, but Morley hasn't acknowledged that he believes it. Morley says that if Square isn't willing to negotiate with him, he will most likely license the technology to Square's competitors. This will be a story we'll want to follow up on.