Western Union Wins Patent Lawsuit Against MoneyGram

NEW YORK (Reuters) – Western Union Co (WU.N) said a federal jury in Texas has ordered a unit of MoneyGram International Inc (MGI.N) to pay it $16.5 million for patent infringement over a money transfer system.

Western Union alleged that MoneyGram Payment Systems Inc’s “FormFree” system essentially copied its own patented “Money Transfer By Phone” service. It said the systems involve the staging of money transfers through call centers and completing transactions at agent locations.

MoneyGram had argued that no reasonable jury could find patent infringement, in part citing trial testimony from a Western Union technical expert that it said showed the systems were sufficiently different.

MoneyGram did not immediately return a call seeking comment. Western Union, a global money-transfer and payments company based in Englewood, Colorado, sued Minneapolis-based MoneyGram in May 2007.

Shares of MoneyGram fell 16 cents to $2.78 in morning trading on the New York Stock Exchange.

Last year, MoneyGram completed a recapitalization that included investments from private equity firm Thomas H. Lee Partners LP [THL.UL] and affiliates of Goldman Sachs Group Inc (GS.N)

In the first six months of 2009, MoneyGram posted a net loss available to shareholders of $49.4 million, or 60 cents per share, on net revenue of $330 million.

The case is Western Union Co v. MoneyGram International Inc, U.S. District Court, Western District of Texas (Austin), No. 07-372. (Reporting by Jonathan Stempel, editing by Dave Zimmerman and Steve Orlofsky)