Evan Schuman's StorefrontBacktalk

“Heartland protests VeriFone’s reference to its claims in the Mercer County Complaint on the basis that the paragraph quoted was taken out of context. Heartland points out that the quoted paragraph was taken from a section of the Mercer County Complaint titled ‘The Petroleum Industry,’ and is inapplicable to the restaurant and retail merchants comprising most of the audience of VeriFone’s press releases and other documents,” the federal judge wrote. “It is not clear to the Court that the distinction between Heartland’s petroleum merchants and Heartland’s retail and restaurant merchants is a significant one for purposes of the challenged statements. The Mercer County Complaint explains the fundamental functionality difference between ‘freestanding’ point of sale terminals typically found in retail and restaurant outlets and ‘integrated systems’ that provide inventory functions in addition to point of sale capabilities found in gas stations. However, the section of the Mercer County Complaint titled ‘The Petroleum Industry’ states that the relationship between Heartland and VeriFone is similar in the petroleum industry as it is to POS terminals generally.”

But the judge paid particular attention to a concession made by an attorney representing Heartland. (Sayeth Heartland’s board of directors: “Et tu, Brute?”) “Counsel for Heartland conceded at oral argument that the Web site is targeted broadly to different types of merchants, including petroleum merchants, and that Heartland has ‘a small segment of petroleum customers that they acquired in an acquisition not too long ago.'”

In an odd twist to this case, Judge Cooper’s decision was issued on December 23 and, within a couple of hours, yanked back. Court officials said the decision accidentally included some material that the judge had agreed to keep secret. That confidential material was details about the number of Heartland customers who had moved to VeriFone.

Heartland Attorney Jonathan Korn, in a letter to the judge, unsuccessfully challenged VeriFone’s claim that the numbers should be kept from investors and customers. “VeriFone, through its public statements, acknowledges that the number of customers who have registered is not confidential information. Indeed, in its very own [news] release, VeriFone has claimed that ‘merchants from coast to coast are contacting VeriFone,'” Korn wrote. He then said the agreement to keep it secret happened during a conference call.

“During that conference, the parties discussed the confidential nature of the identities of the customers who have registered with VeriFone through its Web site or toll free number,” Korn wrote on December 28. “There was no discussion relating to the confidential nature of the number of customers who have registered with VeriFone. That discussion did not occur because the number of customers, without any information identifying those customers, is not confidential information.”