Black Card Sues Visa for $600 Million

CHEYENNE, Wyo. (CN) - Wyoming-based Black Card sued Visa for $600 million in Federal Court, claiming the credit-card interfered with contract to develop a competing product.

American Express owns trademark rights for the phrase "Black Card," which Black Card claims to co-market with Visa. It says the card "was designed to be a high-end luxury card and is marketed as an elite card with exclusive benefits."

The black stainless steel and carbon card is "the most coveted and recognizable" card among consumers, according to the complaint.

Black Card, of Jackson, claims it invested tens of millions of dollars to market the card from 2008 to 2013, when Visa suddenly changed the terms of its co-marketing agreement.

It claims that Visa prohibited use of the "Black Card" moniker some months, but approved it for others, stringing Black Card along while costing it millions in marketing and market momentum.

"In light of Black Card's marketing success with direct mailings, and in reliance upon Visa's continued approval of its marketing, Black Card made significant additional investment in its marketing and prepaid for the printing of all of its direct mailings for 2014," according to the Feb. 18 complaint. "In mid-December 2013, Visa informed Black Card it had concerns regarding the naming protocol. In other words, after five years of uninterrupted successful marketing, Visa expressed concerns for the first time regarding the naming of the Visa Black Card."

Visa claimed for the first time that the Black Card "created confusion among consumers about which party was offering the card," Black Card says.

It was simply part of Visa's ploy to delay further marketing while it swiped Black Card's trade secrets to produce its own card and squeeze the company out of the industry, according to the complaint.

"Throughout the relationship, Black Card provided Visa with its trade secrets, including its marketing studies, marketing plans, trademark information and patented credit card design and prototype," the complaint states. "Visa had a contractual and common law obligation to protect the trade secrets of Black Card."

Black Card claims Visa met with a separate Visa entity in China to discuss the card's international market.

"If followed, Visa's requirements would prohibit Back Card from marketing in maintaining its brand, 'Visa Black Card,' enabling Visa to effectively eliminate a competitor and gain an increased market share when it launches its competing, high-end credit cards in both the U.S. and internationally," the complaint states.

As a result, Black Card says, it has been unable to release other product lines, such as the Titanium Card and the Gold Card.

Black Card seeks damages for breach of contract, breach of faith, breach of implied-in-fact contract, equitable and promissory estoppel, interference with contract and interference with prospective economic advantage.

It is represented by and Billie Addleman with Hirst Applegate, of Cheyenne, and Jason Neville with Williams, Porter, Day & Neville, of Casper.

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