US firm fails in F&P legal bid

Last updated 15:00 18/08/2014

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The Court of Appeal has thrown out a claim by a United States software firm that a subsidiary of Fisher & Paykel Appliances infringed its intellectual property.

The subsidiary, Financial & Paykel Financial Services, was reported in 2011 to be carrying a $5.9 million provision in case of an adverse judgment.

Its chief executive, Greg Shepherd, said a provision was still in place, though he declined to confirm the amount.

"We are very happy the Court of Appeal has confirmed the finding of the High Court," he said.

The origins of the case dated back to 2004 when Fisher & Paykel acquired the consumer finance of arm of Farmers, unaware that the business was reliant on software licensed from privately owned US software firm Karum.

Fisher & Paykel was forced after the acquisition to pay a licence fee to Karum to continue using the software until it finished developing its own software system, called Lending, the following year.

However, a dispute arose after Karum argued Lending copied features of its own credit-management software.

The Appeal Court upheld an earlier High Court ruling that Fisher & Paykel had not copied Karum's source code or logic and had been within its rights to emulate the functionality of its software so as to ensure a smooth transition of the business.

Shepherd said demand for Fisher & Paykel Finance's Q Card, which lets consumers buy from a variety of retailers on three-month interest-free terms, was rising 10 per cent a year.

The finance firm is marketing the card as an alternative to credit cards.

It effectively onsold $275m of consumer Q Card debt through a medium-term note issued last week, which Shepherd said would support the future growth of the card scheme.

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