AmEx, Visa Gift Card Claims Construction Upheld
On April 17th I blogged about a lawsuit filed by Actus (a Texas hold'em, make that "holding" company against Visa, MasterCard, AMEX, Green Dot, First Data etc. It seems this was done a couple years ago by a company called EPC, or Every Penny Counts over some gift card patents they held. Yesterday an Appeals court upheld a lower courts ruling that EPC is SOL.
Thecourt ruled Thursday that the U.S. District Court for the MiddleDistrict of Florida had correctly construed the key term of the patentsheld by Every Penny Counts Inc. It sounds like the court was a little annoyed at EPC:
Here's the pages argument for affirmation:
"EPC has surprisingly little to say about what it alleges is substantively wrong with the district court’s construction, or why its proposed construction would be better on the merits. Instead, it attempts to assign error to the district court’s construction on a number of procedural grounds. Principally, it argues that the court erred by (1) spending a portion of the claim construction hearing considering the meaning of the phrase “sales price,” which was not a disputed claim term; and (2) using the accused products to tailor a construction of the patent claims that would make it impossible for EPC to prove infringement. Neither of these arguments has merit.
EPC’s first argument is that the district court erred by spending a portion of the claim construction hearing considering the meaning of the phrase “sales price,” which was not a disputed claim term. This argument is somewhat puzzling, since it was EPC’s own proposed construction that raised questions concerning the meaning of “sales price.” EPC proposed to construe “excess cash” as “an amount . . . offered in excess of the sale price of merchandise” (emphasis added). It admitted, however, that the parties disagree about what constitutes a “sale.” According to the defendants, a sale occurs when cash changes hands at the cash register. According to EPC, by contrast, to call a transaction a sale is to imply that the merchant would treat the cash the consumer tenders as income on its accounting statements. EPC also insists—without offering any evidence—that when a consumer purchases a gift card, a merchant would not consider this to be a sale.
In the light of this acknowledged disagreement over the meaning of “sales price,” the fact that EPC would both propose to define its patent claims in terms of this phrase and then fault the court for attempting to clarify the phrase’s meaning is at best ironic and at worst disingenuous.
Again, the court’s obligation is to ensure that questions of the scope of the patent claims are not left to the jury. In order to fulfill this obligation, the court must see to it that disputes concerning the scope of the patent claims are fully resolved. In the present case, to evaluate EPC’s proposal concerning the scope of its claims, the court first had to understand this proposal. If the court had adopted EPC’s proposed construction without first assigning a fixed meaning to this construction, then it would quite clearly have failed to assign “a fixed, unambiguous, legally operative meaning to the claim.” Thus, there was nothing improper about the fact that the court interpreted EPC’s (quite slippery) proposed construction.
As Michele de Montaigne has said, there are times when “[w]e need to interpret interpretations more than to interpret things.” Jacques Derrida, Structure, Sign and Play in the Discourse of the Human Sciences, in Writing and Difference 278 (Alan Bass, trans. 1980) (quoting Montaigne).
Equally without merit is EPC’s argument that the district court erred by “tailoring its claim construction to fit the dimensions of the accused product.” A court may not use the accused products for the sole purpose of arriving at a construction of the claim terms that would make it impossible for the plaintiff to prove infringement. But that is not what the court did here. To the contrary, the court quite properly invited the parties’ views of what they thought “excess cash” meant in the context of a series of hypothetical transactions, some of which involved the accused products. For example, the court described a situation in which a consumer tenders $50 for a grocery store gift card with a face value of $50, and then asked the parties to identify whether there was any “excess cash” in that transaction, and if so, what portion of the amount tendered constitutes the “excess.” In other words, the court considered the accused products only to elicit the parties’ views about what the claim term means in the context of a concrete transaction involving these products.
EPC’s suggestion that this was improper is way wide of the mark. See id. at 1326-27 (“While a trial court should certainly not prejudge the ultimate infringement analysis by construing claims with an aim to include or exclude an accused product or process, knowledge of that product or process provides meaningful context for the first step of the infringement analysis, claim construction.”); Aero Prods. Int’l, Inc. v. Intex Recreation Corp., 466 F.3d 1000, 1012 n.6 (Fed. Cir. 2006) (“Although the court revealed an awareness of the accused device, the court’s awareness of the accused device is permissible.”).
In short, the district court correctly construed the claim terms in EPC’s patents. EPC’s attempts to assign error to the process by which the court arrived at its construction cannot succeed.
.
The district court appropriately construed the key term in EPC’s patent claims. We therefore affirm. The defendants may recover their costs accrued in this court.
Click here to read the court document
Thecourt ruled Thursday that the U.S. District Court for the MiddleDistrict of Florida had correctly construed the key term of the patentsheld by Every Penny Counts Inc. It sounds like the court was a little annoyed at EPC:
Here's the pages argument for affirmation:
"EPC has surprisingly little to say about what it alleges is substantively wrong with the district court’s construction, or why its proposed construction would be better on the merits. Instead, it attempts to assign error to the district court’s construction on a number of procedural grounds. Principally, it argues that the court erred by (1) spending a portion of the claim construction hearing considering the meaning of the phrase “sales price,” which was not a disputed claim term; and (2) using the accused products to tailor a construction of the patent claims that would make it impossible for EPC to prove infringement. Neither of these arguments has merit.
EPC’s first argument is that the district court erred by spending a portion of the claim construction hearing considering the meaning of the phrase “sales price,” which was not a disputed claim term. This argument is somewhat puzzling, since it was EPC’s own proposed construction that raised questions concerning the meaning of “sales price.” EPC proposed to construe “excess cash” as “an amount . . . offered in excess of the sale price of merchandise” (emphasis added). It admitted, however, that the parties disagree about what constitutes a “sale.” According to the defendants, a sale occurs when cash changes hands at the cash register. According to EPC, by contrast, to call a transaction a sale is to imply that the merchant would treat the cash the consumer tenders as income on its accounting statements. EPC also insists—without offering any evidence—that when a consumer purchases a gift card, a merchant would not consider this to be a sale.
In the light of this acknowledged disagreement over the meaning of “sales price,” the fact that EPC would both propose to define its patent claims in terms of this phrase and then fault the court for attempting to clarify the phrase’s meaning is at best ironic and at worst disingenuous.
Again, the court’s obligation is to ensure that questions of the scope of the patent claims are not left to the jury. In order to fulfill this obligation, the court must see to it that disputes concerning the scope of the patent claims are fully resolved. In the present case, to evaluate EPC’s proposal concerning the scope of its claims, the court first had to understand this proposal. If the court had adopted EPC’s proposed construction without first assigning a fixed meaning to this construction, then it would quite clearly have failed to assign “a fixed, unambiguous, legally operative meaning to the claim.” Thus, there was nothing improper about the fact that the court interpreted EPC’s (quite slippery) proposed construction.
As Michele de Montaigne has said, there are times when “[w]e need to interpret interpretations more than to interpret things.” Jacques Derrida, Structure, Sign and Play in the Discourse of the Human Sciences, in Writing and Difference 278 (Alan Bass, trans. 1980) (quoting Montaigne).
Equally without merit is EPC’s argument that the district court erred by “tailoring its claim construction to fit the dimensions of the accused product.” A court may not use the accused products for the sole purpose of arriving at a construction of the claim terms that would make it impossible for the plaintiff to prove infringement. But that is not what the court did here. To the contrary, the court quite properly invited the parties’ views of what they thought “excess cash” meant in the context of a series of hypothetical transactions, some of which involved the accused products. For example, the court described a situation in which a consumer tenders $50 for a grocery store gift card with a face value of $50, and then asked the parties to identify whether there was any “excess cash” in that transaction, and if so, what portion of the amount tendered constitutes the “excess.” In other words, the court considered the accused products only to elicit the parties’ views about what the claim term means in the context of a concrete transaction involving these products.
EPC’s suggestion that this was improper is way wide of the mark. See id. at 1326-27 (“While a trial court should certainly not prejudge the ultimate infringement analysis by construing claims with an aim to include or exclude an accused product or process, knowledge of that product or process provides meaningful context for the first step of the infringement analysis, claim construction.”); Aero Prods. Int’l, Inc. v. Intex Recreation Corp., 466 F.3d 1000, 1012 n.6 (Fed. Cir. 2006) (“Although the court revealed an awareness of the accused device, the court’s awareness of the accused device is permissible.”).
In short, the district court correctly construed the claim terms in EPC’s patents. EPC’s attempts to assign error to the process by which the court arrived at its construction cannot succeed.
.
The district court appropriately construed the key term in EPC’s patent claims. We therefore affirm. The defendants may recover their costs accrued in this court.
AFFIRMED.
Click here to read the court document
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