This location-by-spelling card trick was invented by Jim Steinmeyer, who published it in MAGIC, Vol. 2 No. 9, May 1993, p. 56.
The principle on which this trick is based was previously used by Steinmeyer in a trick using eighteen cards: “Remote Control”, published in The New Invocation, No. 43, Feb. 1988, p. 516. The principle has since been applied to a number of other effects and variations by Steinmeyer and others.
Jack Yates's earlier “Miracle Mix-Up” uses a related principle; see Abbott's Anthology of Card Magic, Vol. 3, 1968, p. 58.