On September 24, 2009, in a patent lawsuit between Western Union (NYSE: WU) and MoneyGram Payment Systems, Inc., a jury returned a damage award in favor of Western Union in the amount of $16.5 Million. Western Union won the damage award after a patent infringement trial conducted in the Western District of Texas (Austin).

Western Union sued MoneyGram in 2007 for infringement of a family of four U.S. patents (U.S. Patent Numbers 6,488,203, 6,502,747, 6,761,309 and 7,070,094). Each of the patents relate to money transfer systems, and some of the patents relate to money transfer systems which use prepaid debit cards.

The jury concluded that MoneyGram’s “Form Free” service infringed one or more of the patent claims. The “Form Free” service “eliminates paperwork and reduces wait time at the customer service desk. It is a self-service concept that allows the consumer to complete most of the transaction by phone in his or her native language with a live operator at MoneyGram” (from the MoneyGram website).

The Western Union patents apparently relate to a money transfer staging process (which uses prepaid cards in some versions) to allow customers to initiate a money transfer by interacting with a call center agent, and then complete the transfer by visiting a Western Union location.

It is unclear whether MoneyGram will appeal the decision to the Court of Appeals for the Federal Circuit. The final opinion is not yet available, so we are unable to see exactly what features of the MoneyGram systems were found to be infringing.