430 F.3d 1377 (Fed. Cir. 2005), 05-1009, IPXL Holdings, L.L.C. v. Amazon.com, Inc.

Docket Nº:05-1009, 05-1487.
Citation:430 F.3d 1377
Party Name:77 U.S.P.Q.2d 1140 IPXL HOLDINGS, L.L.C., Plaintiff-Appellant, v. AMAZON.COM, INC., Defendant-Appellee.
Case Date:November 21, 2005
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit

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430 F.3d 1377 (Fed. Cir. 2005)

77 U.S.P.Q.2d 1140

IPXL HOLDINGS, L.L.C., Plaintiff-Appellant,

v.

AMAZON.COM, INC., Defendant-Appellee.

Nos. 05-1009, 05-1487.

United States Court of Appeals, Federal Circuit.

Nov. 21, 2005

Appealed from: United States District Court for the Eastern District of Virginia Judge Leonie M. Brinkema

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Jan M. Conlin, Robins, Kaplan, Miller & Ciresi LLP, of Minneapolis, Minnesota, argued for plaintiff-appellant. With her on the brief were Richard M. Martinez, Emily M. Rome and Nicole E. Narotzky . Of counsel was Munir R. Meghjee .

David K. Callahan, Kirkland & Ellis LLP, of Chicago, Illinois, argued for defendant-appellee. With him on the brief were Thomas G. Pasternak; and Edward C. Donovan, of Washington, DC. Of counsel were David Rokach, of Chicago, Illinois; Christine E. Duh and David S. Olson of San Francisco, California.

Before CLEVENGER, RADER, and SCHALL, Circuit Judges .

CLEVENGER, Circuit Judge .

Plaintiff-appellant IPXL Holdings, L.L.C. ("IPXL") appeals the judgment of the United States District Court for the Eastern District of Virginia granting summary judgment in favor of Defendant-appellee Amazon.com, Inc. ("Amazon"), see IPXL Holdings, L.L.C. v. Amazon.com, Inc., 333 F.Supp.2d 513 (E.D. Va. 2004) (" Summary Judgment "), and awarding Amazon attorney fees, see IPXL Holdings, L.L.C. v. Amazon.com, Inc., No. 04-CV-70 (E.D. Va. Sept. 24, 2004) (" Attorney Fees "). IPXL sued Amazon, alleging that Amazon's "1-click system" infringed claims 1, 2, 9, 15 and 25 of its U.S. Patent No. 6,149,055 ("the '055 patent"). The district court found that Amazon's system did not infringe the '055 patent and that all relevant claims were invalid. Finding that the case was "exceptional," the district court awarded Amazon attorney fees and costs under 35 U.S.C. § 285. Because we agree that claims 1, 2, 9, 15 and 25 are invalid, we affirm the district court's grant of summary judgment on invalidity and need not reach its ruling on noninfringement. However, because Amazon did not timely file its motion for attorney fees under Fed.R.Civ.P. 54(d)(2)(B), we reverse the district court's grant of attorney fees and costs.

I

The '055 patent, entitled "Electronic Fund Transfer or Transaction System," is directed to a system for executing electronic

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financial transactions, such as an electronic fund transfer system, including automated teller machines ("ATMs") or point of sale ("POS") terminals. The essence of the '055 patent is that the system stores information previously defined by the user and displays that information to the user in a single screen, from which the user may select a transaction. Thus, the system allows the user to execute a financial transaction in fewer steps.

Representative claim 1 reads as follows:

An electronic financial transaction system for executing financial transactions, the transactions being characterized by a transaction type and a plurality of transaction parameters, the system comprising:

a central controller;

a communications network;

a terminal device selectively connectable to the central controller through the communications network, the terminal device comprising:

a processor;

a display connected to the processor;

an input mechanism for providing input to the processor; the system further comprising means for storing user defined transaction information, the transaction information comprising at least one of user defined transactions and user defined transaction parameters;

the processor causing the display to display on a single screen stored transaction information; the input mechanism enabling a user to use the displayed transaction information to execute a financial transaction or to enter selections to specify one or more transaction parameters.

'055 patent, col. 20, ll. 24-46. Claims 2, 9, 15 and 25 recite the system of claim 1, with additional limitations.

The accused system, the 1-click system, enables customers to purchase goods online from Amazon.com. The system allows customers who have previously stored information, including credit card numbers and shipping addresses, to place an order without having to reenter the stored information. Amazon stores each order placed using the 1-click system for ninety minutes, during which time the order can be modified or cancelled. At the end of ninety minutes, the orders remaining in the system are finalized; once the orders have been finalized and the goods have been shipped, Amazon requests funds from the user's credit card.

The district court, having construed the claim terms, found that the 1-click system did not meet the following claim limitations: "electronic financial transaction," "stored transaction information," and "single screen." The district court also found that claims 1, 2, 9 and 15 were anticipated, and thus invalid under 35 U.S.C. § 102, as each limitation of the claims was disclosed by U.S. Patent No. 5,389,773 ("the Coutts patent"). Further, the district court found that claim 25 was indefinite, and thus invalid under 35 U.S.C. § 112, as it claimed both a system and a method for using that system. Finding the case to be "exceptional," the district court awarded attorney fees and costs under 35 U.S.C. § 285. On June 28, 2005, the district court set attorney fees and costs in the sum of $1,674,645.82, plus interest. See IPXL Holdings, L.L.C. v. Amazon.com, Inc., No. 04-CV-70 (E.D. Va. June 28, 2005).

On appeal, IPXL argues that the district court erred in several respects with regard to claim construction and that its judgment of noninfringement is therefore incorrect. IPXL also challenges the district court's determination that the Coutts patent anticipated claims 1, 2, 9 and 15 of the '055 patent, arguing that the Coutts patent

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does not disclose three aspects of the "single screen" limitation: a single screen, on which a stored transaction is displayed, and from which a user may select transaction parameters. IPXL further argues that claim 25 does not contain a method limitation within an apparatus claim and that the claim is therefore not indefinite. IPXL also challenges the award of attorney fees on the grounds that Amazon's motion for attorney fees was untimely under Fed.R.Civ.P. 54, as it was made more than fourteen days after entry of judgment. IPXL also argues that attorney fees were not warranted, as there was no showing of subjective bad faith such that the case cannot be found to be "exceptional."

Amazon argues that there was no error in the district court's claim construction and that both the decisions on noninfringement and invalidity are correct. Amazon also argues that its motion for attorney fees was timely and that, in any case, it was within the district court's discretion to allow the motion. Finally, Amazon argues that the case was "exceptional" and that the district court properly exercised its discretion to award attorney fees.

We hold that the district court correctly found that claims 1, 2, 9 and 15 are anticipated by the Coutts patent and that claim 25 is indefinite. Because the claims in suit are invalid, we need not visit the question of whether the district court erred in determining that the claims were not infringed. In addition, we hold that the correct way to perfect a claim to attorney fees under 35 U.S.C. § 285 is through compliance with Fed.R.Civ.P. 54. Because Amazon did not file a timely request for attorney fees under that rule, the district court erred in granting attorney fees to Amazon, and we reverse the order granting attorney fees. Because the award of fees was improper, we need not address IPXL's contention that the case was not "exceptional" under 35 U.S.C. § 285.

II

Claim construction is a question of law that this court reviews de novo. Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1456 (Fed. Cir. 1998) (en banc). Similarly, indefiniteness is a question of law. Atmel Corp. v. Info. Storage Devices, 198 F.3d 1374, 1378 (Fed. Cir. 1999). Anticipation is a question of fact. Med. Instrumentation & Diagnostics Corp. v. Elekta AB, 344 F.3d 1205, 1220 (Fed. Cir. 2003).

Summary judgment is appropriate when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). "In determining whether there is a genuine issue of material fact, the evidence must be viewed in the light most favorable to the party opposing the motion, with doubts resolved in favor of the opponent." Chiuminatta Concrete Concepts, Inc. v. Cardinal Indus., 145 F.3d 1303, 1307 (Fed. Cir. 1998). When a district court grants summary judgment, we review de novo both whether there are disputed material facts and whether the prevailing party is entitled to judgment as a matter of law. SunTiger, Inc. v. Scientific Research Funding Group, 189 F.3d 1327, 1333 (Fed. Cir. 1999).

In reviewing a motion for attorney fees under 35 U.S.C. § 285, we review factual findings, such as whether a case is exceptional, for clear error. Cybor Corp., 138 F.3d at 1460. We review de novo whether the district court applied the proper legal standard to the case. Sulzer Textil A.G. v. Picanol N.V., 358 F.3d 1356, 1363 (Fed. Cir. 2004). We then review the court's decision whether or not to award attorney fees under an abuse of discretion standard. Id.

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III

Anticipation by the Coutts patent

A claim is anticipated under 35 U.S.C. § 102 "if each and every limitation is found either expressly or inherently in a single prior art reference." Bristol-Myers Squibb Co. v. Ben Venue Labs, Inc., 246 F.3d 1368, 1343 (Fed. Cir. 2001). Under 35 U.S.C. § 282, patents are presumed to be valid. However, a patent may be found to be anticipated on the basis of a reference that had properly been before the patent examiner in the United States Patent and Trademark Office ("PTO") at the time of issuance. See Prima Tek II, L.L.C. v. Polypap,...

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