Visa Buxx Accused of Patent Infringement

visa-buxxOne of the great teen debit cards, the Visa Buxx card, is involved in an ongoing patent spat with a company called SpendingMoney LLC. SpendingMoney accused Visa of infringing U.S. Patent No. 5,864,830 in a lawsuit filed in a Federal District Court in Connecticut in January 2009.

Patent disputes are not new in the prepaid debit and gift card world (see our earlier news item about a patent suit involving Western Union and MoneyGram.

These patent suits threaten to shut down certain prepaid products. It is unclear how the SpendingMoney suit against Visa will turn out. As of now, it appears that the patent litigation is ongoing, and that no verdict has been reached.

Here are a few details about the SpendingMoney patent:

A data-processing method by which one or more prepaid satellite spending cards are configured and linked to a cardholder’s host credit card or card account such that a predetermined available spending capacity of each satellite card is selectively determined by the cardholder of the host credit card, is deducted from the available balance of the host card or card account and limits the total spending capacity of the satellite card. The main cardholder may also remotely selectively increase the available spending capacity of the one or more satellite cards by deducting the desired additional spending capacity of each satellite card from the available balance of the host credit card as a purchase against the host card account.

We’ll keep tabs on this patent suit as well as other gift card patents and prepaid debit card patents and patent litigation.

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