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Cofounder Dispute: Square’s Origins Come Under Investigation (Again)

February 3, 2024         By: David Mindich

Square’s cofounders are involved in another lawsuit over the mobile payment giant’s supposed origin.

An engineering professor at Washington University is suing Square’s cofounders Jack Dorsey and Jim McKelvey for fraud and patent infringement, claiming that he was in fact the inventor of Sqaure’s flagship product: a dongle that let’s merchants accept payments directly from their smartphones.

Robert Morley has alleged that McKelvey and Dorsey used him for his technical expertise in creating the dongle, and then cut him out of the business.

Morley’s name should sound familiar to anyone who has been following Square, as he was sued by McKelvey in 2010 for allegedly leaving him off of a patent for the device, saying that the reader was his idea, and after consulting with Dorsey about it, went to Morely to help create it.

This suit, which is still ongoing, will heavily effect the outcome of this new claim; if McKelvey is found to be a co-inventor of the dongle, Morely’s claim will not have any merit.

This seems to be a common problem for many successful tech startups as of late. Snapchat is currently going through its own cofounder dispute. Facebook’s origin issues have become very well-known thanks to “The Social Network.” And, interestingly, Dorsey had been involved in cofounder disputes at his other company you may have heard of, Twitter.

There is a lot of money at stake in this case, as there are rumors that Square, which has been valued at $5 billion according to the lawsuit, will be going public within the year.