AMEX Faces Lawsuit over Clear-Card Patent

Article excerpt

A card manufacturer's lawsuit against American Express Co. alleges the infringement of patent rights over payment cards made with clear plastic.

Perfect Plastic Printing Corp. filed the suit Jan. 6 in the Eastern Division of the U.S. District Court for the Northern District of Illinois. The St. Charles, Ill., company (which made standard opaque cards for Amex for several years) says it is the real inventor of the technology Amex is using to issue clear cards.

The suit alleges that at the time the New York card company filed its patent applications, it had been closely negotiating a contract with Perfect Plastic. By introducing its own clear card, Amex willfully and directly infringed on Perfect Plastic's patent rights and caused substantial damage to its business, the suit says.

In addition to seeking monetary damages and legal fees, Perfect Plastic wants the court to invalidate Amex's patent and enjoin the issuer from making any more cards according to the patent.

Amex, citing a policy of not discussing pending litigation, would not comment on the case. But Channing Barringer, an Amex spokeswoman, confirmed in an e-mail that its patent "covers clear technology for transparent and translucent charge/credit cards that use visible or invisible compounds to block, diffuse, reflect, refract, and absorb infrared light" -- exactly the method that Perfect Plastic says it invented.

Payment cards block beams of light emitted by automated teller machines and other devices, enabling them to be "read" at the point of transaction. Earlier test versions of clear cards could not be detected, because the light beams simply passed through them. Perfect Plastic says it was the first to make "a card that was transparent or translucent to visible light" yet could be picked up by ATMs.

The manufacturer says its research scientist, John Kiekhaefer, hit upon the solution through the use of special light filters.

Doug Eden, Perfect Plastic's director of marketing, would not discuss the suit, saying the company would let the complaint speak for itself. But the attachment of a Nov. 5 Amex press release to the complaint indicates the manufacturer's frustration with what it sees as the issuer's unearned bragging rights.

In that release, Amex announced that it had received a patent for the clear-card technology, which it uses for its popular Blue cards. …