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Cardpool Gift Card Exchange Patent Confirmed Valid by Patent Appeals Court

PLEASANTON, Calif., April 20, 2016 /PRNewswire/ -- On April 5, 2016, the U.S. Court of Appeals for the Federal Circuit issued a precedential opinion confirming that the fifty-two reexamined claims of Cardpool, Inc.'s U.S. Patent No. 7,494,048 entitled "System and Method for Brand Name Gift Card Exchange" (the "Gusler Patent") are valid and can be freely asserted against any competitor. 

In 2011, Cardpool sued Plastic Jungle for infringement of the original claims of the Gusler Patent. Plastic Jungle alleged that the original claims were invalid on the ground of obviousness, 35 U.S.C. § 103 (2006), and that the claimed subject matter is patent-ineligible under 35 U.S.C. § 101.  The District Court dismissed the case finding the original claims invalid.  Cardpool appealed and filed for reexamination of the original claims over the prior art cited by Plastic Jungle.  In 2014, the Patent Office found the amended and new claims of the Gusler Patent (the "Reexamined Claims") to be valid over the prior art.  Because Plastic Jungle had since gone out of the business of gift card exchange, the Parties jointly moved to dismiss the case without prejudice to Cardpool to re-file should Plastic Jungle reenter the business of gift card exchange.

Judge Pauline Newman wrote the consensus opinion, which held in favor of Cardpool on both issues:  (1) whether the reexamined claims are valid in view of the District Court's decision regarding the old claims; and (2) whether res judicata applied to the reexamined claims. In the opinion, the Federal Circuit noted that the reexamined claims to gift card exchange were found "patentable" by the Patent Office and that the prior District Court ruling related only to the pre-reexamination claims and had no effect on the validity of the reexamined claims, stating:  "the issue of validity of the reexamined claims remains to be addressed in any future proceeding."

"Cardpool is pleased that the reexamined claims of its patent are not subject to the district court's previous invalidity decision," said Jason F, Hoffman, a partner at Baker Hostetler representing Cardpool.

Under the Federal Circuit's opinion, future infringement claims against Plastic Jungle also would not be barred by res judicata, said Hoffman.  According to the Federal Circuit opinion:  "If the claim did not exist at the time of the earlier action, it could not have been asserted in that action and is not barred by res judicata. (quoting the Supreme Court 'a prior judgment' cannot be given the effect of extinguishing claims which did not even then exist and which could not possibly have been sued upon in the previous case.)"

The outcome was a complete vindication for Cardpool, as the Cardpool's fifty-two reexamined Gusler claims remain valid and Cardpool is free to assert its claims against any infringing competitor.  The reexamined claims of the Patent are to the process and apparatus to exchange a gift card of one brand for a gift card of another and is a pioneering patent related to gift card exchange.

"We are very pleased with the decision, the validity of our reexamined Gusler Patent was affirmed and we are not legally barred from asserting our patent against any infringer of our gift card exchange patent. It is exactly what we wanted.  We are thankful to the Federal Circuit that they decided it in a way to save us from having to go back to the district court, which saved us unnecessary cost and expedited validating our claims," said Jim McDonald, Blackhawk's Chief IP Counsel.

About Blackhawk Network
Blackhawk Network Holdings, Inc. (NASDAQ: HAWK) is a leading prepaid and payments global company, which supports the program management and distribution of gift cards, prepaid telecom products and financial service products in a number of different retail, digital and incentive channels. Blackhawk's digital platform supports prepaid across a network of digital distribution partners including retailers, financial service providers, and mobile wallets. For more information, please visit www.blackhawknetwork.com or product websites Cardpool, Gift Card Lab, Gift Card Mall, GiftCards.com and OmniCard.

About Cardpool, Inc.
Cardpool, Inc., a Blackhawk Network, Inc. company, is a leading gift card exchange company where customers can buy discounted gift cards or sell gift cards for cash. Cardpool verifies the balance of each of its gift cards and offers the Cardpool Purchase Guarantee; see cardpool.com for terms and conditions. Cardpool also helps retailers provide their shoppers with these exchange services in their own physical stores or on retailer-branded sites. Cardpool provides a turn-key solution driving commerce for its partners, and retailers may integrate with the exchange services by using Cardpool's proprietary APIs. Headquartered in San Francisco, California; visit Cardpool at www.cardpool.com.

CONTACT:
Teri Llach
teri.llach@bhnetwork.com 
650-575-6913

Ashley Jackson
ashley@fletchergroupllc.com 
719-332-3495

 

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SOURCE Blackhawk Network Holdings, Inc.