July 15, 2013

Data breach trial involving Micros set to start Monday

A trial is set to start Monday in U.S. District Court in Baltimore over a Texas restaurant chain’s computer security-breach lawsuit against Columbia-based Micros Systems Inc.

Cotton Patch Cafe, based in Grapevine, Texas, filed suit in 2009 claiming Micros Systems (NASDAQ: MCRS) is liable for breaches in the credit card processing system the restaurant chain bought from Micros for its restaurant in Nacogdoches, Texas.

The lawsuit alleges that Micros Systems failed to meet credit card industry standards because its system did not have adequate security to prevent hackers from breaking in and stealing customers’ credit card data. The lawsuit alleges unknown third-parties accessed the system in 2006 and 2007 and stole customers’ credit card numbers.

“The system was not compliant at the time they sold it to us,” Larry Marshall, Cotton Patch Cafe’s president, said in an interview.

Louise Casamento, a Micros Systems spokeswoman, called the allegations in the lawsuit “frivolous.”

“Micros will vigorously defend itself,” she said. In an answer to the complaint filed in the case, Micros argued that it was Cotton Patch Cafe’s responsibility for maintaining the security of the system.

Cotton Patch Cafe is seeking legal fees and an unspecified amount of damages. The company has spent $800,000 on legal fees so far and paid Visa and Mastercard $250,000 in fines for not having a compliant credit-card processing system, Marshall said.

Marshall said he filed suit because Micros refused to settle.

“They left me no choice,” he said.

Cotton Patch Cafe has 41 locations in Texas, Oklahoma and New Mexico.

Micros is one of the largest providers of credit card processing, and inventory management systems used by the retail, restaurant and hotel industries.