Moscow court rules in favor of Smart Engines in Citibank ID scanning software row
The Arbitrazh Court of Moscow ruled in favor of Smart Engines in a lawsuit that saw the local Citibank subsidiary reportedly using the company’s OCR mobile recognition solution Smart IDReader beyond the term of an initial two-year contract signed in 2020.
According to the court ruling (in Russian), Smart Engines demanded compensation for 5 million rubles (US$82,300). The court acknowledged some damage incurred by the firms due to the unlicensed use of the software but reduced the compensation needed to 0.5 million rubles ($8,230).
The software is used for authenticating ID cards.
“The court apparently considered that the term of unlicensed use was not particularly long (six months). Therefore it reduced the amount of compensation,” says the plaintiff’s attorney Aram Grigoryan, senior associate of Nektorov at the Saveliev & Partners law firm, in an announcement shared with Biometric Update.
Commenting on the news, Smart Engines CEO Vladimir Arlazarov said the company will explore the possibility of an appeal once the reasoning part of the decision is published.
“Our basic licensing policy is one of trust. It is very strange for us to see a bank, whose main value is also the trust of its clients, engage in unlicensed use of the software,” Arlazarov says.
“Of course, we are happy that the court sided with us, but it is extremely surprising that we had to sue such a globally respected company as Citibank.”
Citibank announced in late-October it would sell part of the loan portfolio of AO Citibank to Russian commercial bank Uralsib as it winds down operations.
The lawsuit comes days after Smart Engines updated its algorithms for improved accuracy and speed when scanning Machine Readable Zone documents.