InComm v. Blackhawk Network: Federal Circuit Dismisses Patent Appeal (170 Days)
Interactive Communications International, Inc. challenged Blackhawk Network, Inc. over US9865135B2, a patent covering methods for selling pre-printed online lottery tickets. The Federal Circuit granted Blackhawk’s motion to dismiss the appeal without reaching the merits of the underlying patentability dispute, with each side bearing its own costs.
Federal Circuit ends InComm patent appeal on procedural grounds
Interactive Communications International, Inc. (InComm) filed this appeal at the Court of Appeals for the Federal Circuit on April 9, 2025, challenging a patentability determination relating to US9865135B2. The patent covers methods for selling pre-printed online lottery tickets — a commercially significant product category in the prepaid card and lottery distribution sector. Blackhawk Network, Inc., a major competitor in the gift and prepaid card network space, was the respondent having successfully advanced an invalidity or cancellation action in the tribunal below.
The Federal Circuit dismissed the appeal on September 26, 2025, granting Blackhawk’s motion to dismiss filed at the ECF stage. Notably, the court also granted Blackhawk’s motion to file a sur-sur-reply, suggesting InComm raised arguments in reply briefing that Blackhawk contended required an additional responsive submission. The dismissal is procedural in nature — the appellate court declined to adjudicate the underlying patentability merits, leaving the lower tribunal’s determination formally in place. Each side was ordered to bear its own costs, a neutral cost allocation consistent with a dismissal on procedural or jurisdictional grounds rather than a substantive win for either party.
The 170-day resolution is notably swift for a Federal Circuit appeal, consistent with early dismissal before full merits briefing was completed. The public record does not disclose the precise jurisdictional or procedural basis for dismissal — possibilities include lack of standing, mootness, finality defects in the appealed order, or failure to meet appellate prerequisites. What remains unresolved is whether the underlying patentability challenge to US9865135B2 is now final or whether InComm retains any further avenue to contest the invalidity finding.
Filing to Appeal Dismissed in 170 days
170-day appeal — resolved without full merits briefing, suggesting early procedural disposition
Federal Circuit dismissal: what the ruling means for both parties
Procedural dismissal — no merits ruling on patentability
A motion-to-dismiss dismissal at the Federal Circuit means the appellate court declined to review the substance of the patentability challenge. The lower tribunal’s ruling — adverse to InComm — remains in effect, but the Federal Circuit has issued no opinion on whether that ruling was correct. Common grounds include lack of appellate jurisdiction, mootness, absence of a final appealable order, or failure to satisfy standing requirements.
Procedural — no merits decidedInComm’s appeal path closes without vindication
For InComm as appellant and patent holder, the dismissal is unfavorable procedurally: the appeal is ended without the Federal Circuit endorsing the patent’s validity. The adverse patentability determination below is left standing. Unless InComm can identify a separate procedural vehicle — such as a corrected filing to establish jurisdiction — the invalidity or cancellation finding against US9865135B2 likely becomes final. Commercial enforcement of this patent against Blackhawk and third parties is materially impaired.
Adverse to patent holderBlackhawk secures dismissal without conceding any ground
Blackhawk Network prevailed on its motion to dismiss, ending InComm’s appeal without any appellate adjudication of the patent’s validity. The underlying invalidity or cancellation ruling in Blackhawk’s favour is preserved. The cost-neutral outcome — each side bears own costs — suggests the dismissal rested on a procedural defect rather than a finding of bad-faith or frivolous appeal. Blackhawk faces no further Federal Circuit exposure on this case in its current posture.
Favourable to challengerPre-printed lottery ticket IP landscape shifts toward challengers
The dismissal, combined with the underlying invalidity finding, suggests US9865135B2 no longer provides reliable enforcement leverage in the pre-printed online lottery ticket distribution market. Competitors and partners in the prepaid card and lottery channel should note that this patent’s scope is effectively neutralised for now. However, the absence of a merits ruling means no precedent has been set on the patent’s claim construction or validity — a nuance that may matter for related patent families or continuation applications.
Patent enforceability reducedFull party and counsel information
| Role | Name | Type | Detail |
|---|---|---|---|
| Plaintiff | Interactive Communications International, Inc. | Company | Search in Eureka ↗ |
| Defendant | Blackhawk Network, Inc. | Company | Search in Eureka ↗ |
| Plaintiff counsel | Donald Joseph English | Attorney | Counsel for Interactive Communications International, Inc.Search in Eureka ↗ |
| Plaintiff counsel | Patrick C. Muldoon Special Counsel | Attorney | Counsel for Interactive Communications International, Inc.Search in Eureka ↗ |
| Plaintiff counsel | Patrick D. McPherson | Attorney | Counsel for Interactive Communications International, Inc.Search in Eureka ↗ |
| Plaintiff law firm | Duane Morris, LLP | Law Firm | Representing Interactive Communications International, Inc.Search in Eureka ↗ |
| Defendant counsel | Jason F. Hoffman | Attorney | Counsel for Blackhawk Network, Inc.Search in Eureka ↗ |
| Defendant counsel | Robert Louis Hails | Attorney | Counsel for Blackhawk Network, Inc.Search in Eureka ↗ |
| Defendant law firm | Baker & Hostetler, LLP | Law Firm | Representing Blackhawk Network, Inc.Search in Eureka ↗ |
| Presiding judge | Judge N/A | Judge | Court of Appeals for the Federal CircuitSearch in Eureka ↗ |
Official order — verbatim text
The Federal Circuit’s order is tripartite: it first resolves a procedural motion (sur-sur-reply granted), then disposes of the appeal entirely (motion to dismiss granted), and allocates costs neutrally. The court issued no opinion on the patentability merits of US9865135B2. This structure is consistent with a jurisdictional or procedural dismissal — the appellate court found it lacked authority or that a prerequisite was unmet, without evaluating InComm’s substantive arguments. The neutral cost order further suggests the dismissal rested on grounds other than frivolity.
US9865135B2 — methods for selling pre-printed online lottery tickets
US9865135B2, filed under application number US14/679028, protects methods for selling pre-printed online lottery tickets — a technology at the intersection of prepaid card infrastructure, point-of-sale retail systems, and state lottery distribution. The patent covers the transactional and distribution methodology enabling retailers to sell lottery tickets that are pre-printed and activated through digital networks, a workflow that became commercially significant as lottery operators sought to extend ticket availability into mass-retail environments beyond traditional lottery terminals.
Strategically, this patent represents InComm’s attempt to assert proprietary rights over a key operational method in the prepaid and lottery distribution channel — a market in which Blackhawk Network is also a major participant. The invalidity challenge brought by Blackhawk, and the subsequent Federal Circuit dismissal of InComm’s appeal, suggests the patent’s claims faced serious prior art or patentability scrutiny. For competitors and platform operators in the lottery technology and gift card network sector, the effective neutralisation of this patent may reduce licensing exposure but leaves open questions about related InComm IP.
Should your team run an FTO against US9865135B2?
Product and platform teams operating in the pre-printed lottery ticket distribution space, prepaid card activation networks, or retail point-of-sale lottery fulfilment should still consider a targeted FTO review. While the invalidity finding against US9865135B2 is currently in place, the absence of a Federal Circuit merits ruling means no claim construction has been judicially affirmed. Related continuation or divisional applications in InComm’s portfolio may cover overlapping methods and remain active and enforceable.
PatSnap Eureka’s FTO Search Agent can rapidly map InComm’s full patent family around US9865135B2, identify continuation and divisional filings, flag claims still in prosecution, and benchmark your product workflow against asserted claim elements. For R&D teams building or acquiring lottery distribution or prepaid activation technology, a proactive FTO analysis now — before a new enforcement action is filed — is materially lower cost than litigation response.
Run a freedom-to-operate analysis on US9865135B2 to assess your product’s exposure
Run FTO in Eureka →Similar Federal Circuit appeals in prepaid card and lottery patent disputes
Federal Circuit cases involving prepaid card network patents, lottery ticket distribution methods, and patentability appeals by fintech platform companies against major retail gift card networks.
What this case signals for the prepaid card and lottery IP landscape
A Federal Circuit appeal dismissed on procedural grounds before merits review carries distinct signals for patent holders and challengers in the fintech and lottery distribution sector.
Appellate jurisdiction prerequisites are a real enforcement risk
This dismissal highlights that winning at the tribunal level does not guarantee a viable Federal Circuit appeal path. Patent holders contesting IPR or invalidity rulings must rigorously verify finality, standing, and jurisdictional prerequisites before filing — a procedural misstep can forfeit the appellate opportunity entirely, leaving an adverse validity ruling in place.
Cost-neutral dismissals do not signal settlement — they signal procedural failure
The ‘each side bears own costs’ order here is standard for procedural dismissals and should not be read as a negotiated compromise. There is no public indication of settlement. IP teams monitoring this dispute should treat the underlying invalidity finding as the operative outcome until InComm demonstrates a further challenge vehicle.
Interactive v Blackhawk — key questions answered
The Federal Circuit dismissed the appeal on Blackhawk Network’s motion (Case No. 25-1632, closed September 26, 2025). No merits ruling was issued on the patentability of US9865135B2. Each side was ordered to bear its own costs. The underlying invalidity or cancellation determination against InComm’s patent remains in place.
US9865135B2 covers methods for selling pre-printed online lottery tickets through retail and digital distribution networks. The dispute arose because both Interactive Communications International (InComm) and Blackhawk Network operate in the prepaid card and lottery distribution channel. Blackhawk pursued an invalidity or cancellation action, which succeeded at the lower tribunal level before InComm’s appeal was dismissed at the Federal Circuit.
The precise basis for dismissal is not detailed in the public order. Common grounds for such procedural dismissals at the Federal Circuit include lack of appellate jurisdiction, absence of a final appealable order below, mootness, or failure to satisfy standing requirements. The grant of a sur-sur-reply to Blackhawk suggests InComm raised new arguments in reply that complicated the procedural posture, though the specific dismissal ground is not publicly stated.
A cost-neutral order — where neither party recovers appellate costs from the other — is standard in procedural dismissals at the Federal Circuit and does not indicate a negotiated settlement or compromise. It typically reflects that the dismissal rested on a neutral procedural ground rather than a finding that the appeal was frivolous or brought in bad faith. There is no public indication of any settlement between InComm and Blackhawk.
Following a procedural dismissal, the viability of further challenge depends on the specific ground for dismissal. If the appeal was dismissed for a curable defect — such as a lack of finality in the appealed order — InComm may potentially re-appeal once that defect is remedied. If the dismissal was on jurisdictional or mootness grounds, further appeal may be foreclosed. The public record does not specify the basis, so legal counsel would need to assess InComm’s remaining options on the specific facts.
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