Best Buy's bid to fight gift-card patents nixed by federal jury

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A Texas-based company won a patent infringement suit against Best Buy and several other retail conglomerates Friday after a week-long trial in U.S. District Court.

Alexsam Inc. sued the Richfield-based retailing giant and other retailers for infringing on patents relating to pre-paid electronic gift card programs. A federal jury in Marshall, Texas, upheld two patents owned Alexsam Inc, which Bloomberg refers to as "closely held."

According to the Marshall News Messenger, the suit was filed by the company's founder, Robert Dorf, in 2010 against Best Buy, Barnes & Noble, The Gap Inc., Home Depot and McDonald's, among others.

What's the suit about, you ask?

Well, as Bloomberg explains, "The patents, issued in 1999 and 2001, cover systems to activate and recharge stored-value cards, such as gift and phone cards. The trial focused only on the validity of the patents, with the retailers arguing that they didn’t cover a new idea and that Alexsam isn’t entitled to enforce the patents because of misstatements during the application process."

Got that?

Or, according to the Minneapolis-St. Paul Business Journal, Best Buy and others "lost a federal court case in which they tried to invalidate patents for prepaid electronic gift cards they use," specifically "two patents that activate and recharge stored-value cards such as gift and phone cards."

Retailers joined forces to "invalidate" the patents, both sources agree.

Bloomberg refers to Alexsam as "a Texas license company," and notes that it has been down this courthouse road before, citing a pending suit against Pier 1. And this law firm web site refers to another victory for Dorf.

Here's a blow-by-blow from the Longville (Texas) News-Journal.

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