Court Ruling On Claims Construction Issues Sept 9, 2009.
(2009-09-14)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
CARD ACTIVATION TECHNOLOGIES,
INC.,
Plaintiff,
v.
WALGREEN CO.,
Defendant.
)))))))))))
No. 06 C 5578
Magistrate Judge Maria Valdez
REPORT AND RECOMMENDATION
MARIA VALDEZ, Magistrate Judge.
Plaintiff Card Activation Technologies, Inc. (“Card Activation”) brought this suit against
Walgreen Co. pursuant to 35 U.S.C. § 271, claiming that Walgreen has infringed U.S. Patent No.
6,032,859 (the ‘859 patent), which is owned by Card Activation. The District Court referred the
matter to this Court for a hearing and a report and recommendation on claim construction. The
parties submitted opening, responsive, and supplemental claim construction briefs, and the Court
held a claim construction hearing on April 4, 2008.
DISCUSSION
I. Background
The ‘859 patent, entitled Method for Processing Debit Purchase Transactions Using a
Counter-Top Terminal System, issued March 7, 2000. It is a method patent relating to a method for
processing transactions of various debit styled cards of the type sold by retail establishments. The
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claims of the ‘859 patent cover three types of transactions using these debit styled cards: a purchase
transaction; a transaction where value is added to either a central database or to the card itself,
increasing the purchasing value of the card; or the activation of a phone card. A card is activated
by magnetically coding the card with certain relevant information including an intrinsic monetary
value. In the alternative, the value of the card may be stored in a designated database separate from
the card itself. The card can be used instead of cash by presentment at a retail establishment.
The patent also discloses the processing of these types of cards. The patent’s claims provide
that the three types of transactions using debit styled cards are processed using a countertop
terminal. The equipment used to carry out the method of the invention includes the main terminal
unit with an alphanumeric display, a keypad for entry of a personal identification number plus
programmable function keys, and a swipe reader for reading cards. The retailer’s processing
equipment determines the amount of a purchase, then contacts the debit card owner’s host account
to determine whether sufficient funds are available in the account to cover the particular purchase.
If there are sufficient funds, the debit card owner’s host communicates that fact to the retail
establishment and debits the value of the card accordingly.
As an example of use, a customer will take a product to the sales counter for purchase, then
provide input, such as swiping the card through the card reader of the terminal unit. The terminal
unit’s display will prompt the user to enter a PIN, which is entered by the customer. The clerk will
enter the amount for a given transaction, the customer will be given the opportunity to confirm it,
and the terminal unit will then dial the electronic debit processor, transmit the transaction, and upon
approval print the receipt. During the course of processing by the retailer, the card’s coding is
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changed by deducting the amount of money programmed on the card, or programmed in the
database, by the amount of the purchase.
The method of the ‘859 patent related to transactions adding value to a debit styled card
involves a customer requesting an increase in value and tendering an appropriate amount of money
to a clerk. The clerk then will enter data related to the increase in value, and the amount of the
increase in value is sent to the host data processor. A response is received from the host increasing
the purchasing value of the card. The method of the patent related to phone card activation involves
transmitting an activating request for a phone card and transmitting encrypted phone card data to
a host data processor. The encrypted approval data is then received from the host data processor and
the phone card is enabled.
II. Legal Standard
Claim construction is the first step in determining whether a patent is infringed. In the claim
construction phase, which is a matter of law to be determined exclusively by the court, the court
interprets the claims of a patent, defining the scope of the patentee's rights under the patent.
See, 52 F.3d 967, 970-71 (Fed. Cir. 1995). In the second phase,See Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448,disputed meaningsNTP v. Research in Motion, 418 F.3d
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1282, 1311 (Fed. Cir. 2005) (quoting
(Fed. Cir. 1997)) (emphasis added).
The most important source for claim construction is intrinsic evidence.
v. Benetton Group SpA
language of the claims to be construed, the patent’s other claims, the remainder of the patent
document, the prosecution history, and any prior art cited in the prosecution history.
Courts are directed to begin their analysis by looking to the claim language itself.
Advanced Cardiovascular Sys., Inc. v. Medtronic, Inc.
U.S. Surgical Corp. v. Ethicon, Inc., 103 F.3d 1554, 1568V-Formation, Inc., 401 F.3d 1307, 1310 (Fed. Cir. 2005). Intrinsic evidence includes theId. at 1311.See, 265 F.3d 1294, 1304 (Fed. Cir. 2001);
Hockerson-Halberstadt, Inc. v. Avia Group, Int’l, Inc.
Phillips v. AWH Corp.
law that ‘the claims of a patent define the invention to which the patentee is entitled the right to
exclude.’”) (citation omitted);
(stating that courts “engage in a ‘heavy presumption’ that claim terms carry their ordinary meaning
as viewed by one of ordinary skill in the art”). The usage and context of a disputed claim term has
been called “the most important indicator of the meaning” of the term.
Mining & Mfg. Co.
its ordinary and customary meaning, which is “the meaning that the term would have to a person of
ordinary skill in the art in question at the time of the invention.”
also Altiris
term’s ordinary meaning.”).
Other than the claim language, the specification is the most important type of intrinsic
evidence.
, 222 F.3d 951, 955 (Fed. Cir. 2000); see also, 415 F.3d 1303, 1312 (Fed. Cir. 2005) (“It is a ‘bedrock principle’ of patentAltiris, Inc. v. Symantec Corp., 318 F.3d 1363, 1369 (Fed. Cir. 2003)See Middleton, Inc. v. Minn., 311 F.3d 1384, 1387 (Fed. Cir. 2002). The default meaning of a claim term isPhillips, 415 F.3d at 1312-13; see, 318 F.3d at 1369 (“[D]ictionary definitions may be consulted in establishing a claimSee Phillips, 415 F.3d at 1315 (citing Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576,
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1582 (Fed. Cir. 1996)) (stating that the specification “‘is always highly relevant to the claim
construction analysis . . . it is the single best guide to the meaning of a disputed term’”);
Co. v. Teva Pharms. USA, Inc.
claims “must be construed so as to be consistent with the specification”);
MRI Devices Corp.
can only be determined and confirmed with a full understanding of what the inventors actually
invented and intended to envelop with the claim.’”) (quoting
F.3d 1243, 1250 (Fed. Cir. 1998)).
The written description does not limit the scope of the invention as described in the patent
claim, because it sometimes describes just one way of practicing the invention, the “preferred
embodiment.”
every possible embodiment of the invention into the written description section.
Enter. Co., Ltd. v. SRAM Corp.
for a court to “import[ ] limitations from the specification into the claims absent a clear disclaimer
of claim scope.”
A court should not limit claims from the specification unless there is “a clear disclosure that the
patentee intended the claims to be limited as shown.”
474 F.3d 1323, 1334 (Fed. Cir. 2007);
1250 (“The construction that stays true to the claim language and most naturally aligns with the
patent’s description of the invention will be, in the end, the correct construction.”).
Other claims in a patent may also assist a court in construing a particular claim’s terms.
Vitronics Corp.
Merck &, 347 F.3d 1367, 1371 (Fed. Cir. 2003) (explaining that a patent’ssee also Medrad, Inc. v., 401 F.3d 1313, 1319 (Fed. Cir. 2005) (“‘[T]he interpretation to be given a termRenishaw PLC v. Marposs SpA, 158See Phillips, 415 F.3d at 1323; 35 U.S.C. § 112. A patentee does not need to putSee Sunrace Roots, 336 F.3d 1298, 1305 (Fed. Cir. 2003). Accordingly, it is not properAndersen Corp. v. Fiber Composites, LLC, 474 F.3d 1361, 1373 (Fed. Cir. 2007).MBO Labs., Inc. v. Becton Dickinson & Co.,see Phillips, 415 F.3d at 1323; Renishaw PLC, 158 F.3d atSee, 90 F.3d at 1582. “Because claim terms are normally used consistently throughout
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the patent, the usage of a term in one claim can often eliminate the meaning of the same term in
other claims.”
dependent claim are not present in the corresponding independent claim.
Another interpretation tool is the doctrine of claims differentiation, which “is based upon ‘the
common sense notion that different words or phrases used in separate claims are presumed to
indicate that the claims have different meanings and scope.’”
(citation omitted). “‘To the extent that the absence of such difference in meaning and scope would
make a claim superfluous, the doctrine of claim differentiation states the presumption that the
difference between claims is significant.’”
Comm’n
court may refer is the prosecution history, if it is in evidence, which can show the court “how the
inventor understood the invention the invention in the course of prosecution, making the claim scope
narrower than it would be otherwise.”
Courts are also authorized to consider extrinsic evidence, which “‘consists of all evidence
external to the patent and prosecution history, including expert and inventor testimony, dictionaries,
and learned treatises.’”
however, is considered less significant than the intrinsic record in determining a claim’s meaning,
and it therefore must be considered in the context of the intrinsic evidence.
U.S. Surgical Corp.
because flaws are inherent in each type of extrinsic evidence, courts must assess that evidence
accordingly.
Phillips, 415 F.3d at 1314. Moreover, a court should presume that limitations in aSee id. at 1314-15.Andersen Corp., 474 F.3d at 1369Id. at 1369 (quoting Tandon Corp. v. U.S. Int’l Trade, 831 F.2d 1017, 1023 (Fed. Cir. 1987)). Another part of the intrinsic record to which aPhillips, 415 F.3d at 1317.Id. at 1317 (quoting Markman, 52 F.3d at 980). Extrinsic evidence,See C.R. Bard, Inc. v., 388 F.3d 858, 862 (Fed. Cir. 2004); Phillips, 415 F.3d at 1319. In addition,See Phillips, 415 F.3d at 1319.
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Expert testimony about the meaning of claim terms may be used “only to help the court come
to the proper understanding of the claims” and “may not be used to vary or contradict the claim
language” or to “contradict the import of other parts of the specification.”
at 1584. The Federal Circuit has approved the use of expert testimony to explain how persons
working in a relevant technological field would understand the meaning of terms used in the patent.
Vitronics Corp., 90 F.3d
See Merck & Co.
(“[E]xpert testimony can be useful to a court . . . to provide background on the technology at issue,
to explain how an invention works, to ensure . . . the court’s understanding of the technical aspects
of the patent . . ., or to establish that a particular term in the patent or the prior art has a particular
meaning in the pertinent field.”). However, expert testimony that is “conclusory” is “not useful to
a court,” nor should a court rely on expert testimony that contradicts the intrinsic evidence.
Phillips
, 347 F.3d at 1372; Altiris, 318 F.3d at 1369; see also Phillips, 415 F.3d at 1318See, 415 F.3d at 1318; Altiris, 318 F.3d at 1369.
III. Disputed Terms
The ‘859 patent contains a total of thirty-eight claims, four independent (1, 10, 20, and 29)
and the rest dependent. During claim construction briefing, the parties agreed that the remaining
claims at issue are all four independent claims and dependent claims 5, 11, 16, 21, 24, 30, 32, and
35.
A. Means-Plus-Function
Defendant first argues that the “telecommunications means” described in the method claims
requires a means-plus-function analysis as described in 35 U.S.C. § 112, ¶ 6:
An element in a claim for a combination may be expressed as a means or step for
performing a specified function without the recital of structure, material, or acts in
support thereof, and such claim shall be construed to cover the corresponding
structure, material, or acts described in the specification and equivalents thereof.
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35 U.S.C. § 112, ¶ 6.
Defendant contends that the patent is invalid for failing to disclose any structure for
performing the telecommunications function. The Federal Circuit has provided district courts with
guidance as to (1) when a particular term falls within the scope of this paragraph, and (2) how to
construe a term once it has been determined to be a “means-plus-function” term. When a limitation
uses the language “means . . . for” performing a particular function, that invokes a rebuttable
presumption that the claim limitation is governed by 35 U.S.C. § 112, ¶ 6.
Int’l, Inc. v. Int’l Trade Comm’n
may be overcome if the claim also recites “the structure needed to perform the recited function.”
See Gemstar-TV Guide, 383 F.3d 1352, 1361 (Fed. Cir. 2004). This presumption, however,
TI Group Auto. Sys. (N. Am.), Inc. v. VDO N. Am., L.L.C.
(holding that a claim limitation reciting a “pumping means” did not invoke the paragraph where the
limitation also recited the pump's structure, location, and operation);
Great Plains Chem. Co., Inc.
. . . if the claim itself recites sufficient structure, material, or acts should perform the claim
function.”). Conversely, the fact that “an element does
automatically prevent that element from being construed as a means-plus-function element.”
v. Kimberly-Clark Corp.
When construing a claim limitation governed by 35 U.S.C. § 112, ¶ 6, a court must first
identify the recited function within the limitation.
1361 (“We consult the claim language to determine the function of the limitation.”). After
determining the limitation’s function, the court then “consult[s] the written description to determine
the corresponding structure necessary to accomplish the stated function.”
, 375 F.3d 1126, 1135 (Fed. Cir. 2004)see also Micro Chem., Inc. v., 194 F.3d 1250, 1257 (Fed. Cir. 1999) (“Th[e] presumption collapsesnot include the word ‘means’ does notCole, 102 F.3d 524, 531 (Fed. Cir. 1996) (emphasis in original).See Gemstar-TV Guide Int’l, Inc., 383 F.3d atId. “Identification of
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in Computer Science), all from Iowa State University. Grimes has worked in the computer field for over 35 years
and claims extensive practical experience in payment systems and their development, and he has participated in and
directed commercial payment card projects. He has been active in several professional societies and has published
Grimes earned B.S. and M.S. degrees in Electrical Engineering and a Ph.D. in Electrical Engineering (with a minor
9
corresponding structure may embrace more than the preferred embodiment. A means-plus-function
claim encompasses all structure and the specification corresponding to that element and equivalent
structures.”
at 1137 (“When multiple embodiments in the specification correspond to the claimed function,
proper application of § 112, paragraph 6 reads the claim element to embrace each of those
embodiments.”) (citation and internal quotation omitted).
However, a court’s construction should not “include[ ] elements that are not necessary for
performing the recited function.”
does not permit limitation of a means-plus-function claim by adopting a function different from that
explicitly recited in the claim. Nor does the statute permit incorporation of structure from the
written description beyond that necessary to perform the claimed function.”
F.3d at 1258.
In this case, the claims’ use of the term “means” invokes a rebuttable presumption that it is
a means-plus-function term governed by 35 U.S.C. § 112, ¶ 6. Plaintiff argues, however, that the
presumption is overcome because one skilled in the relevant art would understand that the means
itself connotes structure. Moreover, the claims add other details to the structure,
teaches that the desktop terminal is connected via a modem line to a host computer, (Column 5, lines
53-60); that the terminal “calls” a host, (Column 5, lines 18-24; Column 6, lines 41-45); and that the
terminal “dials” the electronic debit processor, (Column 3, lines 37-41). In support of its argument,
Plaintiff offers the declaration of Jack Grimes, a person skilled in the relevant art.
Micro Chem., Inc., 194 F.3d at 1258; see TI Group Auto. Sys. (N. Am.), Inc., 375 F.3dTI Group Auto. Sys. (N. Am.), Inc., 375 F.3d at 1135. “The statuteMicro Chem., Inc., 194i.e., the patent1 Grimes opines
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over 40 conference and journal papers and has made hundreds of technical presentations around the world on
The full text of the method claims is set forth at the end of the Report and Recommendation.
10
that the term “telecommunication means” calls to mind at least the structure of a modem to a person
of ordinary skill in the relevant art in 1996 and for at least ten years prior. (Pl.’s Resp., Grimes Decl.
¶ 21.) Grimes further declares that one skilled in the relevant art would understand the
specification’s description of the terminal unit “dialing” or “calling” an electronic debit processor
or host computer to mean that a modem would be the interface device that dials or calls, using a
conventional telephone line to allow a counter-top terminal to communicate with a host computer.
(
“telecommunications means” connotes a particular structure to one skilled in the relevant art, the
Court agrees with Plaintiff that the term “telecommunications means” is not a means-plus-function
term. Although Defendant conclusorily asserts that the term “telecommunications” refers only to
a function, Defendant does not offer any proof that the corresponding structure would not be
understood by one of ordinary skill in the relevant art.
Id. ¶ 17.) Based upon the unchallenged declaration demonstrating that the term
B. Timing of the Steps in the Claims
Defendant asserts that the steps in the method claims,
performed in the order set forth in the claims.
performed before other steps, all of the steps in the method claims do not need to be performed in
the precise order recited in the claims.
“Unless the steps of a method actually recite an order, the steps are not ordinarily construed
to require one. . . . However, such a result can ensue when the method steps implicitly require that
they be performed in the order written.”
i.e., Claims 1, 10, 20, and 29, must be2 Plaintiff responds that, while certain steps must beInteractive Gift Express, Inc. v. Compuserve, Inc., 256 F.3d
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1323, 1342 (Fed. Cir. 2001) (citation omitted). In determining whether a method claim’s steps must
be performed in order, a court must first “look to the claim language to determine if, as a matter of
logic or grammar, they must be performed in the order written.”
Mantech Envtl. Corp. v. Hudson Envtl. Servs., Inc.
that “the sequential nature of the claim steps is apparent from the plain meaning of the claim
language and nothing in the written description suggests otherwise”). If the limitation is not so
apparent, the court should then “look to the rest of the specification to determine whether
or implicitly requires such a narrow construction.’”
Gift Express, Inc.
steps is not required.
in claim construction apply when the limitation is the order of method steps, rather than a limitation
on a particular claim term.
Defendant states that the steps must logically be performed in the order recited. For
example, Claim 1’s first step is “providing a counter-top terminal having telecommunications means
operable with a computer,” a keypad, a display, and a card reader. The next step is “entering
transaction data to the computer through keypad data entry.” Therefore, according to Defendant,
the second step cannot be performed until after the computer and keypad have been “provided” in
step one.
Plaintiff maintains that, although several steps must logically be performed before other
steps, certain steps are capable of being performed in any order. In support of its claim, Plaintiff
presents another declaration of Jack Grimes. According to Grimes, there were several manufacturers
of terminals at the time of the patent, and each offered many different terminals for processing sales
Altiris, 318 F.3d at 1369; see also, 152 F.3d 1368, 1376 (Fed. Cir. 1998) (holdingit ‘directlyAltiris, 318 F.3d at 1370 (quoting Interactive, 256 F.3d at 1342) (emphasis in original). If it does not, the claim’s sequence ofId. The general principles governing the use of the rest of the specificationAltiris, 318 F.3d at 1370.
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His analysis of the interdependencies of the other independent claims is essentially the same as that of Claim 1.
12
transactions. Plaintiff argues that one of ordinary skill in the art would know that these different
terminals would vary in their sequence of operations, but certain operations would need to be
conducted in a particular order,
is one of the last operations.
Plaintiff also contends that the opening paragraph of the Detailed Description in Column
2, lines 43-51, supports its argument regarding the timing of the steps, where it states that the
“embodiments are provided so that this disclosure will be thorough and complete, and will fully
convey the scope of the invention to those skilled in the art.” Plaintiff offers two examples of
embodiments with differing sequences, one in which the card is swiped before the amount is entered
(Column 3, lines 25-41), and another in which the purchase is made and then the card is swiped, just
before the host is called, (Column 5, lines 53-58).
According to Grimes, the interdependencies of the steps of Claim 1
Step 1a must occur first
Steps 1b or 1c or 1e may occur after step 1a in any order
Step 1d must follow step 1c
Steps 1f, 1g, and 1h must occur last, in the order listed.
(
The Court concludes that, based on the plain language of the method claims and without
relying upon the Grimes declaration, the steps do not need to be performed in the precise order
recited. While Defendant is correct in noting that step 1b logically follows step 1a, that does not
require the further conclusion that all steps must be performed in the recited order. Upon reading
the plain language of the steps, it is clear that all steps other than step 1a must follow step 1a, as they
i.e., sending information related to a transaction to a host computer3 is as follows:See Pl.’s Initial Mem., Ex. D at 4.)
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reference the equipment provided in that step. Similarly, the final three steps, which involve
transmitting a transaction request and receiving and displaying a response from the host computer,
must logically follow steps 1b, 1c, 1d, and 1e, which relate to inputting transaction data or an
authorization to initiate a transaction. However, steps 1b, 1c, and 1e do not reference any steps other
than step 1a, and nothing in the language of the claim would prevent them from being performed
in a different sequence.
description indicating that the order is important, no disclaimer of any other order of steps, and no
prosecution history suggesting a surrender of any other order). The Court therefore recommends
that the timing of the steps of the method claims be construed in a manner consistent with their plain
language and that every step need not be performed in the precise manner recited in the claims.
See Altiris, 318 F.3d at 1370 (stating that there is no statement in the
C. “Providing a counter top terminal having telecommunication means operable with
a computer, at least one keypad for data entry to the computer, a display responsive
to the computer, and a card reader communicating with the computer” [Claims 1,
10, 20, 29]
Plaintiff argues the ordinary meaning of the term is providing (“supplying for use”) a counter
top terminal that contains a telecommunication means operable (“capable of being used”) with a
computer, at least one keypad for data entry to the computer, a display responsive to the computer
(“performing its function automatically under the control of the computer”), and a card reader
communicating (“sending or receiving information”) with the computer.
Defendant states that “[i]nterpreting the ‘providing’ clause in light of the specification
requires that it be interpreted to mean that the countertop terminal with the associated keypad
display and card reader be ready for use,”
be in position, turned on and enabled and ready to process a card.” According to Plaintiff, the
claim’s plain language does not require that the countertop terminal be turned on, enabled, and ready
i.e., “the ‘providing clause’ requires that the equipment
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to process a card. The Court finds that Plaintiff’s disagreement with this limitation is inconsistent
with its own proposed construction, which is that a terminal is “supplied for use” with a
telecommunications means that is “capable of being used,” a display that “performs its function
automatically under the control of the computer,” as well as a card reader “sending or receiving
information.” A plain reading of this language requires a construction that the terminal is active and
ready for use.
D. “Purchasing value of a card in response to card use” [Claims 11, 30]
Plaintiff states that this term means “a value in a central data base identified by the card (for
magnetic stripe cards) or stored on the card (for chip cards).” Defendant proposes a construction
by which the claim requires the card reader to “serve the function of ‘modifying’ the ‘purchasing
value’ of a card, and that, when interpreted in light of the specification, must be construed to modify
information contained on the card.” Defendant states that the only disclosure of “modifying” a card
is in connection with phone and gift cards, in which the information is contained on the card or on
a separate database.
Plaintiff argues that the plain and ordinary meaning of the claim is that a card can be used
for purchases and has a certain value, and when it is used for purchases, its value goes down by the
amount of the purchase. According to Plaintiff, the specification also supports its reading. The
specification provides, among other things, that “[t]he host keeps a record of the account balances.
Alternatively in applications using smart cards (chip cards), the balance is kept on the card and the
terminal will call the host only in batch mode to transfer all collected activity rather than for each
individual transaction,” (Column 5, lines 28-32); after a customer makes a purchase using a prepaid
card, “the host computer . . . would deduct the purchase from the balance and keep a running total,”
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(Column 5, lines 54-59); and the host “deducts current purchase and sends back balance remaining
which is printed on customer receipt,” (Column 5, lines 41-46).
Plaintiff also argues that its interpretation is consistent with the patent’s other claims, namely
independent claims 1, 10, 20, and 29, which provide for the step of entering a code for “access to
a customer data base of a host computer” and another step of transmitting a transaction request to
a host data processor “for requesting a response of approval or disapproval from the host data
processor.” Pursuant to the parties’ agreed interpretation of the clause of requesting an approval
from the host data processor, the host data processor checks the customer data base to determine
whether there are funds available in the customer data base to cover the transaction. Plaintiff argues
that this agreed interpretation is not consistent with Defendant’s proposed interpretation of the
present term, which by implication eliminates any value reflected in a database.
The Court finds that Defendant’s proposed construction is not apparent from the plain
language of the claims, and its broad citation to two full columns in the specification (without
pinpoint line citations) in support of its argument is not sufficient to persuade the Court to adopt its
construction. Therefore, the Court recommends that Plaintiff’s construction of the term “purchasing
value of a card in response to card use” be adopted.
E. “Transaction data” [Claims 1, 10] and “sales transaction data” [Claims 20, 29]
Plaintiff states that “transaction data” means “information associated with a transaction” and
“sales transaction data” to mean “information associated with a sales transaction.” Defendant
interprets the term “sales transaction data” as necessarily including the price paid for goods or
services; otherwise, the customer’s authorization would be meaningless. According to Defendant,
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both claim terms refer to “information relating to purchases, including such things as pricing
information, the nature of goods, etc.”
Plaintiff states that the term “transaction data” does not limit itself to information regarding
a “purchase” and that the specification does not limit or expand the plain and ordinary meaning of
the phrase “transaction data.” Plaintiff also contends that Defendant erroneously attempts to define
the two terms in the same manner, as the term “transaction data,” found in claims 1 and 10, is
distinguished from the term “sales transaction data,” found in claims 20 and 29. Plaintiff argues that
the term “sales” modifies and narrows the broader phrase “transaction data,” but it does not require
than an interpretation of “sales transaction data” include pricing information, the nature of goods,
etc.
The Court agrees with Plaintiff that, to the extent Defendant construes the separate terms
“transaction data” and “sales transaction data” identically, such a construction is inconsistent with
the plain language of the claims. The Court recommends that Plaintiff’s proposed construction of
the term “transaction data” be adopted. For the term “sales transaction data,” the Court agrees with
Defendant that, consistent with the specification, (
of Claims 20 and 29, the definition of the term should include a reference to the amount of the
transaction. The Court therefore recommends that the District Court construe the term “sales
transaction data” as “information associated with a sales transaction, including but not limited to
pricing information.”
see, e.g., Column 3, lines 35-37), and the context
F. “Debit styled card” [Claims 1, 10, 20, 29]
Plaintiff’s interpretation of the term “debit styled card” is “a card having a value in a central
data base identified by the card (for magnetic stripe cards) or stored on the card (for chip cards).”
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According to Defendant, the term should include “any card against which a charge is incurred, that
would include not only a ‘debit card,’ such as a gift card or a phone card, but a credit card as well.”
The parties thus disagree on whether the term should include credit cards.
Plaintiff states that the independent claims of the patent all claim a “debit styled card” where
money is immediately withdrawn from a central account or from the card itself, as opposed to a
credit card, which is a card that assures a retailer that the card holder has sufficient credit and that
the issuer will pay for the merchandise at issue. The specification provides that, among other things,
“[t]he [debit-styled] card has intrinsic value which is debited every time a purchase is made,”
(Column 5, lines 17-18); the value of the card “is reduced as purchases are made,” (Column 5, lines
50-52); and the value of the card can be increased “once the balance is depleted or is insufficient for
the purchase,” (Column 5, lines 28-32). Plaintiff also argues that its proposed interpretation of the
term is consistent with the proper interpretation of the phrase “purchasing value of a card.”
Defendant maintains that the processing of debit cards is at best a preferred embodiment and
that nothing in the claims or specification limits “debit styled cards” to debit cards alone. Defendant
argues that a claim’s preamble merely recites an intended use and does not limit the claim where,
as in this case, the preamble does not provide antecedents for claim terms appearing later in the
claims.
(Fed. Cir. 2003). Defendant states that, for example, Claim 1’s preamble refers to “debit purchase
transactions,” while the method step constituting a limitation refers to a “debit styled card,”
demonstrating that the preamble provides no antecedent for a “debit styled card” and thus is not a
limitation of the claims.
See Boehringer Ingelheim Vetmedica, Inc. v. Schering-Plough Corp., 320 F.3d 1339, 1345
Case 1:06-cv-05578 Document 108 Filed 09/09/2009 Page 17 of 27
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Defendant also contends that the specification is not consistent with Plaintiff’s construction
that the claims are limited to debit cards. The Summary of the Invention states:
In view of the foregoing background, it is therefore an object of the present invention
to provide a counter-top credit and ATM transaction card terminal for the purchase
of goods and services. It is further an object to provide capability for phone card
activation, customer frequency programs, check guarantee and prepaid cellular time
activation.
* * * *
Processing services to merchants will allow them to accept all credit and ATM cards
for the purchase of goods or services provided by that particular location.
(Column 1, lines 54-60; Column 2, lines 7-9.)
In light of the specification language summarizing the invention, the Court agrees with
Defendant’s proposed construction that the term “debit styled cards” may include credit cards as
well as a gift card or phone card.
invention as a whole, rather than statements that describe only preferred embodiments, are more
likely to support a limiting definition of a claim term.”).
See C.R. Bard, 388 F.3d at 864 (“Statements that describe the
G. “Entering a customer authorization code” [Claims 1, 10, 21, 32]
The parties do not dispute that the term “customer” should be given its ordinary meaning,
that the term “code” means “a sequence of letters or numbers or a combination thereof,” and that
“authorization” means “approval by an entity with authority for approval.” Plaintiff states that the
step of “entering a customer authorization code” means “a code, a code being a series of letters or
numbers or a combination thereof, signifying customer approval.” Defendant argues that a
“‘customer authorization code’ should be construed as a series of letters or numbers or a
combination thereof known to the customer making the purchase which is entered into the computer
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to authorize access to the customer data base.” The parties therefore disagree on whether the code
must be known to the customer.
Plaintiff argues that the claim language does not state that the customer must know the exact
digits comprising a code, and thus the plain and ordinary meaning of the words does not support
Defendant’s proposed construction. According to Plaintiff, the patent specification does not clearly
disclaim the scope of the plain claim language. First, the specification does not provide that the code
is known to the customer. The specification indicates that a code may be entered by swiping a card,
scanning a bar code, entering an identification number on a keypad, or other equivalent means. In
addition, the specification provides that the authorization code may be encrypted on a card, so the
code may not even be apparent to the customer. Second, Plaintiff contends that the file history
supports this reading. The examiner originally rejected the claim on the basis that another patent
taught entering an authorization code through a keypad, in which case the code would be known to
the customer. Plaintiff also maintains that Defendant’s proposed interpretation is inconsistent with
its own interpretations of other claims in this case. For example, in relation to claim 20, Defendant’s
proposed interpretation does not provide that the person “entering an authorization code through the
keypad for having the computer initiate communication with a host data processor” must know the
code.
Defendant argues that because the customer authorization code signifies approval, the code
must be known to the customer. But Defendant acknowledges that in certain circumstances, a
customer may signify approval by swiping a card. Defendant attempts to work around this
specification by stating that the customer must at least have “sufficient control” over the code that
entry of the code signifies approval and that it is “known” to the customer “in that its use is under
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the customer’s control.” Defendant’s interpretation of the term “customer authorization code” does
not support the proposed limitation that the code be “known” to the customer. Defendant’s apparent
concern that a customer’s approval may not be given unless the customer knows the code is not well
founded. Plaintiff’s own construction requires that the code be used to signify approval; it is not an
additional requirement of the claim that the precise code signifying the approval be known. The
Court therefore recommends that the term be construed consistent with its ordinary meaning and
without the requirement that the code be known to the customer.
H. “Entry of a clerk authorization code for initiating a debit purchase transaction”
[Claims 1, 10, 21]
Plaintiff defines a clerk authorization code as a code, a series of numbers or letters or
combination thereof, identifying a clerk. Plaintiff reads the claim as not requiring that the clerk
authorization code be entered through the keypad, or that the code be entered for each transaction.
Defendant interprets the claim term as “[e]ntering, through the keypad, a code known to the
store clerk entered for each transaction to enable information respecting the sale to be transmitted
to the data processing computer for the purpose of initiating the transaction. In other words, the
‘clerk authorization code’ is a code which tells the system that the transaction information can be
forwarded to the computer for processing.” The parties therefore disagree on whether the clerk
authorization code must be known to the clerk and whether it must be entered for each transaction.
In support of its argument that the code must be known to the clerk, Defendant states that
the specification provides that the only way the code can be input is through the keypad, and thus
the code must be known. Plaintiff responds that Defendant’s interpretation is inconsistent with the
specification, which provides that for cellular phone activation, “the user, provides input . . . by
swiping an ID card . . . or in an alternative, enters the ID number on the keypad.” (Column 4, lines
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59-64.) Plaintiff also cites to the specification’s declaration that “[t]he code . . . serves to
authenticate the source of the message so that . . . unauthorized persons can not steal service by
entering
arguments are unpersuasive. First, the cited portion of the specification describing “swiping an ID
card” relates to cellular phone activation transaction, not “for initiating a debit purchase transaction”
as described in the claim. Second, assuming this part of the specification is relevant to a debit
purchase transaction, the language following the quoted portion makes it clear that the “user [who]
provides input . . . by swiping” is the customer, not the clerk: “The user makes the selection, the
clerk is prompted to collect the amount and confirm it by entering an authorization code on the
remote keypad.” (Column 4, line 66-Column 5, line 1.) Plaintiff has therefore offered no basis to
conclude that the authorization code entered by the clerk can be entered other than on the keypad
provided in the method claims.
Defendant next argues that the wording of the claims demonstrates that separate entry of a
code is required for each transaction,
data associated with a transaction is authorized to be released, a clerk authorization code must be
entered. Plaintiff argues that a code identifying a clerk is sufficient and that the word “a” in the
phrases “a clerk authorization code” and “a debit purchase transaction” should be read as “one or
more,” meaning that a clerk need not enter a code for each separate transaction. Defendant responds
that Plaintiff’s proposed construction disregards the purpose of the clerk authorization code, which
is “initiating” and “authorizing” the transaction, not identifying a particular clerk.
The Federal Circuit “has repeatedly emphasized that an indefinite article ‘a’ or ‘an’ in patent
parlance carries the meaning of ‘one or more’ in open-ended claims containing the transitional
false messages into the system.” (Column 4, lines 35-39 (Plaintiff’s emphasis).) Plaintiff’si.e., each time a debit purchase transaction is initiated and the
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phrase ‘comprising.’”
(“Unless the claim is specific as to the number of elements, the article ‘a’ receives a singular
interpretation only in rare circumstances when the patentee evinces a clear intent to so limit the
article.”);
(Fed. Cir. 2001) (“In the parlance of patent law, the transition ‘comprising’ creates a presumption
that the recited elements are only a part of the device, that the claim does not exclude additional,
unrecited elements.”).
In this case, the claims do contain the transitional phrase “comprising,” and therefore
Plaintiff has met the presumption that the indefinite article “a” means “one or more.” Moreover,
Defendant has not made a showing that this is one of the “rare circumstances” in which the patentee
has evinced a clear intent to limit the article. Thus, while Defendant’s “common sense” reading of
the claims may be logically compelling, Defendant has offered no case law that allows it to
