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Visa sues AmEx
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November 26, 1996: 8:38 a.m. ET
Credit card giant alleges trademark infringement in rewards program
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NEW YORK (CNNfn) - Visa U.S.A. filed suit against American Express Co. late Monday, charging trademark infringement in connection with a cardholder-rewards program.
The suit, filed in federal district court in San Francisco, focuses on American Express' program with Advanta Corp., which issues a "Rewards Accelerator" Visa card. The Advanta program enables American Express cardholders to earn additional points on that company's "Membership Rewards" program.
Horsham, Pa.-based Advanta is the nation's ninth-largest credit card issuer.
Visa said its suit aimed "to stop American Express' attempt to take a 'free ride' on the Visa brand" through the program with Advanta."
"The 'Rewards Accelerator' card co-mingles the Visa and American Express brands in a way that is harmful to Visa and its member institutions and to consumers," Visa Chief Executive Officer Carl Pascarella said in a statement."
"It's a lure," Pascarella said. "(It's) like a McDonald's franchise using the golden arches as a customer draw and then selling them a Burger King Whopper once they're in the door and vice versa."
In addition to the lawsuit against American Express, Visa said it notified Advanta that its "Rewards Accelerator" program violates existing regulations since it requires participating Visa cardholders to have an American Express card. The company also requested that Advanta terminate the program and cease soliciting cardholders.
-- Pia C Napolitano
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Visa
American Express
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