Sears, Walgreen, TJX Sued for Giftcard Patent Violations

TJX was the seventh retailer to be sued, but not likely to be the last as Card Activation issued letters to 400 potential defendants.

Major retailers—including Sears, Walgreen, TJX, Barnes & Noble, Aeropostale and OfficeMax—are involved in federal patent lawsuits, accusing the chains of violating a patent when they started processing their giftcards through their POS systems.

TJX was the most recent defendant (do you get the impression that TJXs corporate counsels is about to install one of those "Take A Number" devices?) accused of violation of United States Patent 6,032,859, owned by Card Activation Technologies.

The Patent—full copy available here—lays out the methodology that Card Activation had in mind.

Card Activation attorney Mark Roth said this Patent—filed in 1996—anticipated the next wave of giftcard and phonecard usage. At the time, the cards were issued for a specific value and then thrown away when emptied. The Patent envisions POS units that could add and deduct value.

The TJX lawsuit was the seventh retailer to be sued, but its not likely to be the last as Card Activation issued a statement that more than "400 letters have been sent to other retailers advising them that they are violating the companys patent, which has been independently valued at $3.7 billion."

The very first defendant that was sued was McDonalds, which is also the only retailer to have settled thus far. According to a Card Activation SEC filing this summer, McDonalds paid $45,000 on Feb. 27 and received a license that runs through September 2017.

Its quite likely the retailers were simply using the capabilities offered by their POS vendors, but those retail chains have much deeper pockets.

Retail Center Editor Evan Schuman can be reached at


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