On Friday (June 7), a federal jury ruled in favor of (Barnes & Noble (NYSE:BKS)) in retail. The arguments focused on when is a giftcard transaction truly processed—is it when the card has money placed into it or is it when the products/services are delivered?—and whether a processor is acting as a bank? And if the retailer controls the full transactions, is it acting bank-like?
The reason the bank-like issue comes into play is that the patent in this case specified that a transaction would go through a bank connection and Barnes & Noble argued that they handle the transactions internally, as a stored payment. Therefore, the chain argued, it's a different process and does not violate the patent. The patent holder, Alexsam, said that the way that Barnes & Noble processed these payments was using their payment processor. Given that the payment processor network also handled traditional bank card payments, it's a bank network and it's therefore the same as the patent. The jury sided with the bookseller.