A patent infringement lawsuit involving some of the biggest players in the credit card industry has taken a surprising turn in favor of the underdog, Meridian Enterprises Corp.

The St. Louis-based marketing company won a victory in its battle against Visa, MasterCard, Chemical Bank, Associates National Bank, Shell Oil, and Union Oil Co., when the presiding judge found merit in Meridian's patent.

The judge dismissed the defendants' motion for summary judgment, which would have ended the case.

A final verdict in Meridian's favor could be costly for banks and hinder them from introducing popular programs that offer cardholders rebates.

Meridian says its patent covers a process by which rebates are credited to cardholders' accounts electronically with points that translate into dollars.

The programs encourage customers to use their cards to earn points redeemable for the card sponsor's products.

In a 25-page opinion, Judge Dickinson R. Debevoise for the U.S. District Court of New Jersey, ruled in January that Meridian Enterprises' patent "is broad enough" to include the credit card products of the defendants.

Though it is early in the case, which has lumbered on since August 1994, industry experts said that the card giants must be considering a settlement.

"They are clearly thinking internally about what kind of settlement offer would be required," said Michael Auriemma, a credit card consultant in Westbury, N.Y., who represents a number of clients who have patented financial products.

"We are anxious to see a settlement take place," said Michael L. Fraser, a vice president of Meridian. "Settlement has been a possibility all along ."

An attorney representing Meridian Enterprises, Spiro Bereveskos, would not disclose whether a settlement is being discussed but said, "the ball is in their court."

"As far as we are concerned we have substantial claims against Meridian's patent," said Peter Bucci, a New York attorney representing the new Chase. If the case goes to trial, sources close to the companies expect it to be sometime next year.

Last year, Citibank and Online Resources Corp., best known for manufacturing screen telephones, sued each other over patent infringement issues, but eventually they settled out of court. As part of their agreement, both companies have remained silent about it.

"I wouldn't be surprised if the Meridian case goes the same way as the Citibank-Online deal," said James Wells, managing director of Washington- based Furash & Co. "When cases are settled out of court and there is a secrecy clause, it is difficult to know what is permissible under these patents."

Meridian targeted the Shell-Chemical MasterCard because of its method of processing a rebate. The card offers up to 2% back for all purchases and an additional 1% for purchases of Shell gasoline.

The rebate can be used only in the following month, and only to purchase Shell gasoline - a reward scheme that is central to Meridian's patent.

The Unocal card issued by Associates National Bank works much the same.

The card giants argue that other card programs, such as the Discover Card, predate Meridian's patent. But unlike the Shell and Unocal cards, the Discover Card rebate may be used for any purchase.

The other argument against Meridian's patent is the fact that it has been applied to programs designed to increase a company's sales revenues.

Meridian, a privately held company specializing in employee incentive programs, has licensing agreements for its patent with a number of large corporations, like IBM Corp. and American Standard.

Using Meridian's formula for crediting card accounts, IBM established a credit card rebate program as an incentive for its dealer sales representatives to sell the company's products. Points are awarded and credited to the employee's personal MasterCard when IBM's products are sold.

Judge Debevoise, however, concluded that the language in Meridian's patent does not limit it to such employee incentive programs.

If the six defendants named in Meridian's lawsuit do not decide to settle out of court, a countersuit seeks to invalidate Meridian's patent.

"There is a general perception (in the financial community) that patents can be ignored," said Mr. Auriemma. A loss by Meridian would "foster this mistrust of patents and encourage people to infringe against patents."

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