Serverside Grp. Ltd. v. Tactical 8 Techs., L.L.C.

• Decision Date: 06 January 2014
• Docket Number: No. C 12–2016–MWB.,C 12–2016–MWB.
• Citation: 985 F.Supp.2d 944
• Parties: SERVERSIDE GROUP LIMITED and Serverside Graphics, Inc., Plaintiffs, v. TACTICAL 8 TECHNOLOGIES, L.L.C., and Bank Iowa Corporation, Defendants.
• Court: U.S. District Court — Northern District of Iowa

985 F.Supp.2d 944

SERVERSIDE GROUP LIMITED and Serverside Graphics, Inc., Plaintiffs,

v.TACTICAL 8 TECHNOLOGIES, L.L.C., and Bank Iowa Corporation, Defendants.

No. C 12–2016–MWB.

United States District Court,

N.D. Iowa,

Eastern Division.

Jan. 6, 2014.

Charles T. Steenburg, Hunter D. Keeton, Michael A. Albert, Wolf, Greenfield & Sacks, PC, Boston, MA, Glenn L. Johnson, Nyemaster Goode, P.C., Cedar Rapids, IA, for Plaintiffs.

David M. Breiner, Michael A. Dee, Brant D. Kahler, G. Brian Pingel, Brown, Winick, Graves, Gross, Baskerville & Schoenebaum PLC, Des Moines, IA, for Defendants.

MEMORANDUM OPINION AND ORDER REGARDING PLAINTIFFS' MOTION FOR PARTIAL RECONSIDERATION OF SUMMARY JUDGMENT ORDER

MARK W. BENNETT, District Judge.

This patent-infringement action, alleging infringement of two of the plaintiffs' patents, U.S. Patent No. 7,931,199 (the '199 patent) and U.S. Patent No. 7,946,490 (the '490 patent), both entitled “Computerized Card Production Equipment,” is before me on the December 12, 2013, Motion For Partial Reconsideration Of Summary Judgment Order (docket no. 151) by plaintiffs Serverside Group Limited and Serverside Graphics, Inc., collectively “Serverside.” Because trial in this matter is set to begin on January 21, 2014, I entered an Order (docket no. 152) on December 20, 2013, setting expedited briefing deadlines and telephonic oral arguments on Serverside's Motion For Partial Reconsideration. Defendants Tactical 8 Technologies, L.L.C., now known as Banno, L.L.C. (Banno), and Bank of Iowa Corporation (BIC), collectively “the Iowa Defendants,” filed their Resistance (docket no. 155) on December 30, 2013, and Serverside filed its Reply (docket no. 162) on January 2, 2014. I heard telephonic oral arguments on the Motion on January 3, 2014. I have expedited my disposition of the Motion, as well.

Serverside seeks reconsideration of pages 64–66 and 75–77 of my December 9, 2013, Memorandum Opinion And Order Regarding Defendants' Motion for Summary Judgment (Summary Judgment Ruling) (docket no. 144), Serverside Group Ltd. v. Tactical 8 Techs., L.L.C., 985 F.Supp.2d 900, 936–38, 942–43, 2013 WL 6448824, *30–*31, *36–*37 (N.D.Iowa Dec. 9, 2013). In the first cited section of my Summary Judgment Ruling, I concluded that, as to the “secure unique identifier” of claim of the '199 patent, “it is not the system that must be ‘secure,’ but the ‘unique identifier’ itself that must be ‘secure’ ”; that, as to the “uniqueness” requirement, the Iowa Defendants had pointed to evidence that there is a possibility, however small or remote, that two customers of the same financial institution could have the same first and last names and the same last four digits of their PANs, that Serverside had failed to generate a genuine issue of material fact that the Gramm–Leach Bliley Act Standards For Safeguarding Customer Information or pertinent regulations would preclude such an occurrence, or that such an occurrence is computationally impossible; and that, as a consequence, the Iowa Defendants were entitled to summary judgment of noninfringement of claim of the '199 patent, because Serverside had not generated any genuine issue of material fact that there was any “secure” or “unique” identifier in Banno's accused Cre8MyCard system. Summary Judgment Ruling at 64–66, Serverside Group Ltd., 985 F.Supp.2d at 936–38, 2013 WL 6448824 at *30–*31 (emphasis in the original).

In the second cited section of my Summary Judgment Ruling, I reached a similar conclusion that, as to the “encrypted customer information” limitation of the claims of the '490 patent, “it is not the system, but the ‘customer identifier’ itself that must ‘encompass [ ] encrypted customer information,’ ” and that, as a consequence, the Iowa Defendants were entitled to summary judgment that they do not infringe claim of the '490 patent, and all other patent claims of the '490 patent at issue, as a matter of law, because Serverside had failed to generate a genuine issue of material fact that the alleged “customer identifier” in the Cre8MyCard system “encompasses encrypted customer information.” Id. at 75–77,Serverside Group Ltd., 985 F.Supp.2d at 942–43, 2013 WL 6448824 at *36–*37.

I turn, first, to the questions of the authority and standards for reconsideration of these conclusions in my Summary Judgment Ruling. In Kirt v. Fashion Bug # 3252, Inc., 495 F.Supp.2d 957 (N.D.Iowa 2007), I addressed these questions, as follows:

This court has previously found that Rule 54(b) of the Federal Rules of Civil Procedure provides authority for a court to reconsider any interlocutory order, including a prior ruling on a motion for summary judgment. Doctor John's, Inc. v. City of Sioux City, Iowa, 467 F.Supp.2d 925, 931 (N.D.Iowa 2006); Wells' Dairy, Inc. v. Travelers Indemnity Company of Illinois, 336 F.Supp.2d 906, 909 (N.D.Iowa 2004) (citing cases). Specifically, Rule 54(b) provides that, unless the court certifies the order for interlocutory appeal, “any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.” Fed.R.Civ.P. 54(b) (emphasis added). Moreover, this court has repeatedly held that it has the inherent power to reconsider and revise any interlocutory order, such as a summary judgment ruling, up until the time that a final judgment is entered. Wells' Dairy, Inc., 336 F.Supp.2d at 909 (citing Kaydon Acquisition Corp. v. Custum Mfg., Inc., 317 F.Supp.2d 896, 903 (N.D.Iowa 2004); Helm Financial Corp. v. Iowa N. Ry. Co., 214 F.Supp.2d 934, 999 (N.D.Iowa 2002); and Longstreth v. Copple, 189 F.R.D. 401, 403 (N.D.Iowa 1999)).

This court has also noted, “The exact standard applicable to the granting of a motion under Rule 54(b) is not clear, though it is typically held to be less exacting than would be [applicable to] a motion under Federal Rule of Civil Procedure 59(e), which is in turn less exacting than the standards enunciated in Federal Rule of Civil Procedure 60(b).” Id. Although the standards for reconsideration of interlocutory orders may be less “exacting” than the standards for reconsideration of final orders under Rules 59(e) and 60(b), this court has nevertheless held that it should look to the general principles under Rules 59(e) and 60(b) for guidance when reconsidering a summary judgment ruling pursuant to Rule 54(b). Id. (citing Bragg v. Robertson, 183 F.R.D. 494, 496 (S.D.W.Va.1998)). Under Rule 59(e), a judgment may be amended to correct “clearly” or “manifestly” erroneous findings of fact or conclusions of law. See, e.g., Hagerman v. Yukon Energy Corp., 839 F.2d 407, 414 (8th Cir.1988); Baker v. John Morrell & Co., 266 F.Supp.2d 909, 919 (N.D.Iowa 2003). It is this standard that the court finds is applicable to reconsideration of a summary judgment ruling under Rule 54(b).

Kirt, 495 F.Supp.2d at 964–65;see also Rattray v. Woodbury Cnty., Iowa, 908 F.Supp.2d 976, 984–85 (N.D.Iowa 2012) (quoting this portion of Kirt ). I conclude that these standards are also applicable to Serverside's Motion For Partial Reconsideration of my Summary Judgment Ruling.

The first error in my Summary Judgment Ruling that Serverside asserts is that it was improper for me to grant summary judgment on the basis of arguments or issues not raised by the parties in their arguments concerning summary judgment or that had not previously been part of the case. The Eighth Circuit Court of Appeals has stated,

We have repeatedly held that in the Eighth Circuit, a district court commits reversible error when it grants summary judgment on an issue not raised or discussed by the parties. It is fundamentally unfair to the nonmoving party to require her to address issues not addressed by the moving party in anticipation that the district court might rely on some unidentified issue to grant the motion.

Heisler v. Metropolitan Council, 339 F.3d 622, 631 (8th Cir.2003); see also Cowden v. BNSF Ry. Co., 690 F.3d 884, 895 (8th Cir.2012) (quoting this excerpt from Heisler );Liberty Mut. Ins. Co. v. Pella Corp., 650 F.3d 1161, 1178 (8th Cir.2011) (also quoting this excerpt from Heisler ). Leaving aside—for the moment—the question of whether I granted summary judgment in the challenged portions of my Summary Judgment Ruling on the basis of grounds not raised or discussed by the parties or previously part of the case, as Severside contends, Serverside now concedes that, by entertaining briefing and oral arguments on its Motion For Partial Reconsideration, I have remedied any fundamental unfairness in the challenged parts of my Summary Judgment Ruling and that I may now enter rulings on the pertinent issues either altering or adhering to my previous rulings.

Thus, the real question on Serverside's Motion For Partial Reconsideration is whether I “clearly” or “manifestly” erred, as a matter of fact or law, in my conclusions in the challenged parts of my Summary Judgment Ruling. See Kirt, 495 F.Supp.2d at 965. I conclude that I did not, even considering Serverside's additional arguments in support of its Motion For Partial Reconsideration.

More specifically, Serverside argues that, contrary to my Summary Judgment Ruling, neither the claims, the specification, nor my prior constructions of the claim terms at issue require that the “security” of the “secure unique identifier” in claim of the '199 patent, or the “encryption” of customer information in the customer identifier in claim of the '490 patent, be intrinsically “secure” (or “encrypted”). Rather, Severside argues that such “security” or “encryption” can be achieved in a variety of ways, including firewall trust security, secure locations, encrypted transmissions, etc. Serverside cites in...