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Alexsam, Inc., Obtains $9 Million Jury Verdict Against IDT Corporation

February 17, 2011

Fitch Even client Alexsam, Inc., received a favorable jury verdict in its patent infringement lawsuit against IDT Corporation in the United States District Court for the Eastern District of Texas. Alexsam owns U.S. Patent Nos. 6,000,608 and 6,189,787, which relate to the activation of prepaid phone cards, gift cards, and other stored value cards at retail locations using standard retail point-of-sale terminals. The patented technology has helped fuel the growth of the prepaid card market through “gift card malls” now commonly found at prominent national retail chains.

Alexsam asserted at trial that IDT’s systems for activating prepaid long-distance calling cards and Visa gift cards through IDT-authorized retail locations infringe both patents. On February 15, 2011, the jury returned a verdict finding that each of the accused IDT card activation systems infringes and that the asserted claims of Alexsam’s ‘608 and ‘787 patents are not invalid. The jury awarded damages of $9.06 million as a reasonable royalty on past sales.

Alexsam has a number of licensees and is pursuing additional patent infringement lawsuits against other participants in the prepaid card industry, with the case against IDT presenting the first opportunity for a jury to assess the patents.

Fitch Even’s trial team consisted of Steven Schroer, Timothy Maloney, Alison Aubry Richards, David Gosse, and Nicole Little, together with local trial counsel Melissa Smith of the law firm Gillam & Smith in Marshall, Texas.

IDT was represented at trial by Denver-based Bartlit Beck Herman Palenchar & Scott, and Washington, D.C.-based Murphy & King, together with local trial counsel from the Heartfield Law Firm.
 

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