InComm Victorious in Patent Infringement Lawsuit Against Blackhawk Network

San Diego – In a patent infringement lawsuit filed in October 2009 in a Wisconsin district court, a jury came back with a unanimous verdict in favor of Incomm, finding Blackhawk Network liable for infringing an Incomm patent related to prepaid card transactions.

In its complaint, Incomm alleged that Blackhawk infringed its patent “by practicing, making, using, selling or offering for sale in this judicial district and elsewhere the inventions claimed in the patent-in-suit” by offering its gift-card mall program. At the time, the Incomm patent in question was still pending, but had received a notice of allowance with the United States Patent and Trademark Office (USPTO).

During litigation proceedings for the case, Blackhawk Network, a provider of prepaid products, attempted to have Incomm’s patent invalidated with the USPTO to support its defense. Unable to prove the patent was invalid, Blackhawk has since removed the portions of the unused code found to infringe Incomm’s patent. The modification will reportedly have no effect on how Blackhawk’s business operates nor will it affect any Blackhawk customers.

The patent involved in the case is U.S. Patent No. 7,578,439 entitled “System and Method for Authorizing Stored Value Card Transactions.” After the verdict was read, Incomm was awarded approximately $3.5 million in compensatory damages as a result of Blackhawk Network’s repeated infringement of its patented computer system and method during the period from August 2009 to February 2012, with no further payments due as a result of Blackhawk’s removal of the lines of code.

Blackhawk is reportedly considering appealing the jury’s verdict.

Founded in 1992, Incomm has become an industry leader in the innovation, marketing, and distribution of store-value gift and prepaid products using its patented point-of-sale transaction technology and payment solutions. With over $15 billion in processed retail sales transactions for 2011, Incomm is the nation’s largest provider of gift cards, prepaid wireless products, reloadable debit cards, digital music downloads, content, games, software and bill payment solutions.

Incomm partners with well-known consumer brands all over the world, providing approximately 250,000 retail locations the products and services in demand from their customers. The company is headquartered in Atlanta, Georgia with satellite offices in other states as well as around the world.