Cardtek v. Kroger & Starbucks: Payment Convergence Patent Suit Dismissed With Prejudice
Cardtek International filed suit in the Eastern District of Texas asserting three patents covering payment convergence systems and methods against retail giants Kroger and Starbucks. The case resolved after 637 days — dismissed with prejudice on joint stipulation, with each side bearing its own costs.
Payment convergence IP clash ends quietly in East Texas
Cardtek International, Inc. filed this patent infringement action on February 6, 2023 in the Eastern District of Texas, asserting three patents — US7039593B2, US10628818B2, and US8600770B2 — against The Kroger Co. and Starbucks Corporation. The patents cover payment convergence systems and methods, a technology space central to how major retailers and food-service chains integrate multiple tender types, loyalty programs, and transaction channels at point of sale.
The case closed on November 4, 2024 via a joint stipulation of dismissal with prejudice, accepted by the court. A dismissal with prejudice is a full and final termination: Cardtek is permanently barred from reasserting the same claims against Kroger on these patents in any future action. Each party was ordered to bear its own costs, attorneys’ fees, and expenses, which means no fee-shifting motion succeeded — or was ever filed — under 35 U.S.C. § 285.
The 637-day duration and joint nature of the stipulation are consistent with a confidential settlement reached between the parties ahead of trial, though the public record does not confirm any financial terms. The mutual cost-bearing arrangement is a common hallmark of negotiated resolutions in E.D. Texas patent cases. What drove the resolution — claim construction rulings, inter partes review filings, or commercial licensing terms — remains undisclosed. Starbucks also named as a defendant suggests broad retail deployment of the allegedly infringing payment convergence technology.
Filing to Dismissed with Prejudice in 637 days
637 days — above the median E.D. Texas patent case duration, suggesting substantive pre-trial activity
Dismissed with prejudice: what the joint stipulation means for both sides
With-prejudice dismissal: a permanent bar on re-filing
A dismissal with prejudice under Fed. R. Civ. P. 41 is a final adjudication on the merits for claim-preclusion purposes. Cardtek cannot revive these specific infringement claims against Kroger — on US7039593B2, US10628818B2, or US8600770B2 — in any future action. The joint stipulation signals mutual agreement, distinguishing this from a unilateral dismissal. The court accepted the stipulation without conditions, closing all pending relief as moot.
Permanent — no re-filing permittedCardtek’s enforcement window against Kroger is closed
With prejudice means Cardtek forfeits its right to re-assert these three patents against Kroger. However, the patents themselves remain valid and enforceable against other parties. If a confidential settlement was reached — which the joint stipulation and timeline suggest — Cardtek may have secured licensing value that justified ending the litigation. The public record does not confirm any payment or license grant.
Patents still live vs. third partiesKroger and Starbucks exit with no public liability finding
The dismissal with prejudice delivers a clean exit for Kroger and Starbucks: no infringement finding, no damages award, no injunction, and no public admission of wrongdoing appears in the record. Each party bearing its own costs avoids the reputational and financial exposure of a § 285 exceptional-case finding. For Starbucks in particular, the outcome removes litigation uncertainty from its payment systems operations.
No liability on the recordPayment convergence IP remains a live enforcement risk for retailers
This case signals that payment convergence patents — covering integrated loyalty, tender, and transaction-channel systems — are actively asserted against large-footprint retailers. The three Cardtek patents span application dates from multiple generations of payment technology. Retailers operating integrated POS, mobile wallet, or loyalty convergence platforms should treat this family as a live monitoring target, particularly given the patents’ survival for future third-party enforcement.
FTO review advised for retail POS platformsFull party and counsel information
| Role | Name | Type | Detail |
|---|---|---|---|
| Plaintiff | Cardtek International, Inc. | Company | Payment technology IP licensor — holder of US7039593B2, US10628818B2, and US8600770B2Search in Eureka ↗ |
| Defendant | Kroger, Co. | Company | The Kroger Co. and Starbucks Corporation — major U.S. retail and food-service operatorsSearch in Eureka ↗ |
| Co-Defendant | Starbucks Corporation | Company | Search in Eureka ↗ |
| Plaintiff counsel | Andrew Thompson (Tom) Gorham | Attorney | Counsel for Cardtek International, Inc.Search in Eureka ↗ |
| Plaintiff counsel | Bradley Bowling | Attorney | Counsel for Cardtek International, Inc.Search in Eureka ↗ |
| Plaintiff counsel | Eric P. Chenoweth | Attorney | Counsel for Cardtek International, Inc.Search in Eureka ↗ |
| Plaintiff counsel | J. Thad Heartfield | Attorney | Counsel for Cardtek International, Inc.Search in Eureka ↗ |
| Plaintiff counsel | Kevin Eugene Cadwell | Attorney | Counsel for Cardtek International, Inc.Search in Eureka ↗ |
| Plaintiff counsel | Lisa Maria Thomas | Attorney | Counsel for Cardtek International, Inc.Search in Eureka ↗ |
| Plaintiff counsel | Logan English Johnson | Attorney | Counsel for Cardtek International, Inc.Search in Eureka ↗ |
| Plaintiff counsel | Melissa Richards Smith | Attorney | Counsel for Cardtek International, Inc.Search in Eureka ↗ |
| Plaintiff counsel | Michael Francis Reeder | Attorney | Counsel for Cardtek International, Inc.Search in Eureka ↗ |
| Plaintiff counsel | Varant Yegparian | Attorney | Counsel for Cardtek International, Inc.Search in Eureka ↗ |
| Plaintiff law firm | Ajamie LLP | Law Firm | Representing Cardtek International, Inc.Search in Eureka ↗ |
| Plaintiff law firm | Cadwell Clonts & Reeder LLP – Houston | Law Firm | Representing Cardtek International, Inc.Search in Eureka ↗ |
| Plaintiff law firm | Cadwell Clonts Reeder Thomas | Law Firm | Representing Cardtek International, Inc.Search in Eureka ↗ |
| Plaintiff law firm | Gillam & Smith LLP | Law Firm | Representing Cardtek International, Inc.Search in Eureka ↗ |
| Plaintiff law firm | Hicks Johnson PLLC | Law Firm | Representing Cardtek International, Inc.Search in Eureka ↗ |
| Plaintiff law firm | The Heartfield Law Firm | Law Firm | Representing Cardtek International, Inc.Search in Eureka ↗ |
| Defendant counsel | Benjamin Kiersz | Attorney | Counsel for Kroger, Co.Search in Eureka ↗ |
| Defendant counsel | Gregory Phillip Love | Attorney | Counsel for Kroger, Co.Search in Eureka ↗ |
| Defendant counsel | William P. Atkins | Attorney | Counsel for Kroger, Co.Search in Eureka ↗ |
| Defendant law firm | Pillsbury Winthrop Shaw Pittman LLP | Law Firm | Representing Kroger, Co.Search in Eureka ↗ |
| Defendant law firm | Steckler Wayne Cherry & Love, PLLC | Law Firm | Representing Kroger, Co.Search in Eureka ↗ |
| Presiding judge | Judge N/A | Judge | Texas Eastern District CourtSearch in Eureka ↗ |
Official order — verbatim text
The court’s acceptance of the joint stipulation of dismissal with prejudice is procedurally straightforward but commercially significant. The explicit language — ‘all claims and causes of action…are DISMISSED WITH PREJUDICE’ — forecloses any future action by Cardtek against Kroger on these patents. The own-costs provision and absence of any damages finding mean the public record is silent on financial terms, which is consistent with a confidential resolution having been reached prior to the stipulation being filed.
US7039593B2, US10628818B2 & US8600770B2 — Payment Convergence Systems
The three asserted patents — US7039593B2, US10628818B2, and US8600770B2 — form a patent family covering payment convergence systems and methods. Filed across multiple application dates (US10/217903, US11/381099, and US14/095731), these patents span the evolution from early integrated POS convergence architectures to more recent platform implementations. Payment convergence technology addresses the integration of disparate tender types, loyalty programs, stored-value instruments, and digital payment channels into a unified transaction processing framework at retail points of sale.
For major retailers and food-service operators, payment convergence infrastructure is mission-critical: it underpins mobile wallet acceptance, gift card redemption, loyalty point accrual, and multi-tender split transactions. The breadth of this three-patent family — covering both system and method claims across multiple continuation generations — creates a layered enforcement profile that is difficult to design around without a thorough claim mapping exercise. Any retailer operating an integrated POS or loyalty-convergence platform should treat this family as a live monitoring target given the patents’ continued validity.
Should you run an FTO against US7039593B2 and the Cardtek payment convergence family?
If your organisation operates or develops integrated payment platforms, multi-tender POS systems, mobile wallet acceptance infrastructure, or loyalty-convergence solutions, the Cardtek patent family warrants a formal freedom-to-operate assessment. The fact that Cardtek successfully brought claims against two of the largest U.S. retailers — and resolved both on confidential terms — suggests the patents have at minimum sufficient claim breadth to sustain litigation pressure. Product teams deploying payment convergence features should not assume prior art or obviousness arguments will easily invalidate all three patents.
PatSnap Eureka’s FTO Search Agent can map your payment system’s technical architecture against the claim sets in US7039593B2, US10628818B2, and US8600770B2 simultaneously, identifying overlap, design-around opportunities, and prior art candidates across the full family. Eureka’s citation graph also surfaces related family members and continuation applications that may not yet be asserted — giving your legal and R&D teams a complete picture of Cardtek’s IP perimeter before you ship or scale.
Run a freedom-to-operate analysis on US7039593B2 to assess your product’s exposure
Run FTO in Eureka →Similar payment convergence patent cases in E.D. Texas and related venues
Explore comparable payment system and POS technology infringement actions filed in the Eastern District of Texas and related venues targeting retail and fintech operators.
What this case signals for the payment technology IP landscape
E.D. Texas remains a preferred venue for payment system patent assertions. This tri-patent filing against two household retail names warrants attention.
E.D. Texas is still a preferred venue for payment tech patent assertions
Cardtek’s choice of the Eastern District of Texas for a payment convergence infringement action is consistent with a broader trend of NPE and licensing-focused plaintiffs filing in plaintiff-friendly venues. Retailers and fintech operators with significant U.S. commercial footprints should monitor their exposure to this court specifically.
Multi-defendant retail filing suggests a licensing campaign, not just litigation
Naming both Kroger and Starbucks — two of the largest U.S. retail and food-service operators — in the same action suggests Cardtek was pursuing a sector-wide licensing strategy. Patent holders targeting payment infrastructure often file sequentially or jointly against multiple retailers to establish licensing norms and royalty benchmarks across the industry.
Cardtek v Kroger — key questions answered
The dismissal with prejudice permanently bars Cardtek from re-asserting the same infringement claims against Kroger on US7039593B2, US10628818B2, and US8600770B2. However, the patents remain valid and fully enforceable against all other parties. Cardtek retains the right to assert these patents against any other retailer or payment technology operator who has not settled.
Cardtek asserted three patents: US7039593B2 (application US10/217903), US10628818B2 (application US14/095731), and US8600770B2 (application US11/381099). All three cover payment convergence systems and methods — technology relevant to integrated multi-tender POS, loyalty, and digital payment platforms used in retail and food-service environments.
The mutual own-costs provision avoids any fee-shifting analysis under 35 U.S.C. § 285, which requires a finding that the case is ‘exceptional.’ It is a standard term in joint stipulations of dismissal and is consistent with a negotiated resolution. It does not indicate either party won or lost on the merits — and the public record does not disclose whether any financial settlement was reached.
The joint stipulation names Cardtek and The Kroger Co. as the filing parties, and the court order references dismissal of all claims and causes of action between Plaintiff and Defendant. Based on the public docket record, Starbucks was a named defendant and the case was closed in its entirety. However, the precise scope of the dismissal as applied to Starbucks specifically should be verified against the full docket text.
The three Cardtek patents cover systems and methods for converging multiple payment types — including stored-value cards, loyalty instruments, credit/debit tenders, and digital wallets — into a unified transaction processing framework. This technology is embedded in retail POS infrastructure used by major grocery chains, quick-service restaurants, and other high-volume consumer transaction environments where multi-tender and loyalty integration is standard.
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