TJX Cos. Inc. is being sued by Chicagobased Card Activation Technologies, it
was announced Wednesday.
CAT filed the suit against the Framingham, Mass.based retailer, claiming it
owes the company royalties from its activation and processing of gift cards.
Card Activation Technologies owns patented payment transaction technology used
for processing gift cards, phone cards and other debit purchase transactions,
and claims many retailers, including TJX Cos., that use the debit cards infringe
on its patent. CAT is seeking a percentage of the amount of money transacted
through using the patent technology, which is used to activate stored value on
gift and other cards.
TJX Companies (NYSE: TJX) reported $17.4 billion in sales for fiscal 2007, which
ended Jan. 27, 2007, according to SEC filings. U.S. stores produced 78 percent
of those sales. While there is no breakout of sales attributed to gift cards, it
is believed the total could be significant, according to a CAT news release.
CAT (OTCBB: CDVT) also has an injunction to halt further use of gift cards
pending TJX obtaining a license agreement from Card Activation Technologies.
The lawsuit was filed in the U.S. Federal Court in Chicago on Nov. 6, 2007.
Because the lawsuit is pending, a TJX Cos. spokeswoman said the company could