Stored Value Solutions, Inc. v. Card Activation Techs., Inc., C.A. No. 09–495–KAJ.

• Citation: 2011 Markman 2610392,796 F.Supp.2d 520
• Decision Date: 01 July 2011
• Docket Number: C.A. No. 09–495–KAJ.
• Parties: STORED VALUE SOLUTIONS, INC., (“n/k/a”) Ceridian Stored Value Solutions, Inc., Plaintiff, v. CARD ACTIVATION TECHNOLOGIES, INC., Defendant.
• Court: U.S. District Court — District of Delaware

2011 Markman 2610392

796 F.Supp.2d 520

STORED VALUE SOLUTIONS, INC., (“n/k/a”) Ceridian Stored Value Solutions, Inc., Plaintiff,

v.CARD ACTIVATION TECHNOLOGIES, INC., Defendant.

C.A. No. 09–495–KAJ.

United States District Court, D. Delaware.

July 1, 2011.

Richard L. Horwitz, Esq. and David E. Moore, Esq., Potter Anderson & Corroon LLP, Wilmington, DE, of Counsel, Alan M. Fisch, Esq., Jason F. Hoffman, Esq., Coke Morgan Stewart, Esq. and R. William Sigler, Kaye Scholer LLP, Washington, DC, for Plaintiff, Stored Value Solutions, Inc., n/k/a Ceridian Stored Value Solutions, Inc.

Jack B. Blumenfeld, Esq. and Julia Heaney, Esq., Morris, Nichols, Arsht & Tunnell LLP, Wilmington, DE, of Counsel, J. David Wharton, Esq., Michael J. Peterson, Esq. and Nora M. Kane, Esq., Stinson Morrison Hecker LLP, Keith H. Orum, Esq. and Mark D. Roth, Orum & Roth, LLC, Chicago, IL, for Defendant Card Activation Technologies, Inc.

MEMORANDUM OPINION

JORDAN, Circuit Judge.I. Introduction

Plaintiff Stored Value Solutions, Inc., doing business now as, Ceridian Stored Value Solutions, Inc. (“SVS”) seeks a declaratory judgment of invalidity of U.S. Patent No. 6,032,859 (the “'859 patent”), owned by Defendant Card Activation Technologies, Inc. (“CAT”). (Docket Index [“D.I.”] 1.) Before me now are SVS's Motion for Summary Judgment of Invalidity Due to Anticipation and Obviousness (D.I. 102), SVS's Motion for Partial Summary Judgment of Invalidity of Claims 20, 22–31, and 33–38 Due to Lack of Written Description (D.I. 167), CAT's Motion for Summary Judgment of Validity (D.I. 109), and CAT's Motion to Exclude the Expert Testimony of Lori Breitzke (D.I. 107). Relevant to the disposition of those motions is the construction of the term “purchase transaction” as used in the '859 patent. ( See D.I. 134.) For the reasons that follow, including my decision on the construction of that term, I will deny both of CAT's motions, grant SVS's motion on Invalidity Due to Anticipation and Obviousness in part, and grant SVS's Motion for Partial Summary Judgment of Invalidity of Claims 20, 22–31, and 33–38 Due to Lack of Written Description.

II. BackgroundA. Procedural Background

SVS filed a complaint seeking a declaratory judgment of invalidity of the ' 859 patent under 35 U.S.C. §§ 102 and 103 on July 8, 2009. (D.I. 1.) CAT filed its answer on August 13, 2009. (D.I. 9.) A report and recommendation on claim construction of nine disputed terms in the '859 patent was issued on April 28, 2010, (D.I. 61) and adopted on June 3, 2010, (D.I. 64) over CAT's objections (D.I. 62). On December 17, 2010, the parties filed their cross motions for summary judgment on validity of the '859 patent, and CAT filed its motion to exclude the testimony of SVS's expert, Ms. Breitzke. (D.I. 102, 107, 109.) At my request (D.I. 134, 138), the parties have briefed the Court on the meaning of “purchase transaction” as used in the '859 patent (D.I. 135, 136, 137, 139, 140, 141) and whether the '859 patent's written description is adequate under 35 U.S.C. § 112, ¶ 1 (D.I. 143, 144, 145, 146, 148, 149, 168, 171, 172). Oral argument on those issues was held on March 25, 2011. (D.I. 159.) On April 1, 2011, SVS filed an amended complaint, with leave of Court, alleging that, in addition to being invalid under 35 U.S.C. §§ 102 and 103, the '859 patent was also invalid for failing to meet the written description requirement of 35 U.S.C. § 112, ¶ 1. (D.I. 152). Additional expert discovery and briefing was completed on the adequacy of the written description of the '859 patent (D.I. 154, 155, 156, 157, 160, 161). The parties are scheduled to try this case before a jury beginning on July 25, 2011.

B. The '859 Patent

The '859 patent discloses a method for processing electronic transactions which involve an ATM card, prepaid debit card, or phone card. Entitled “Method for Processing Debit Purchase Transactions Using a Counter–Top Terminal System,” the '859 patent issued March 7, 2000, on an application filed September 15, 1997, and claimed priority to two provisional applications, Nos. 60/025,281 and 60/033,153, that were filed September 18, 1996 and December 13, 1996, respectively. As originally issued, the '859 patent contained thirty-eight claims, four of which were independent (claims 1, 10, 20, and 29). Pursuant to an ex parte reexamination of the patent, CAT canceled dependent claims 21 and 32 and added language from those claims to the independent claims on which they rely, claims 20 and 29, respectively. Ex Parte Reexamination Certificate No. U.S. 6,032,859 C1, October 5, 2010, Reexamination Request No. 90/009,459, April 30, 2009.¹

III. Applicable Law and Standard of ReviewA. Claim Construction

“[A] district court may engage in claim construction during various phases of litigation, not just in a Markman order,” especially as “its understanding of the technology evolves.” Conoco, Inc. v. Energy & Envtl., L.C., 460 F.3d 1349, 1359 (Fed.Cir.2006) (internal quotations omitted) (addressing a District Court's sua sponte construction of a term). Claim construction is a matter of law. Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1448, 1454–56 (Fed.Cir.1998) (en banc). “[T]he words of a claim ‘are generally given their ordinary and customary meaning.’ ” Phillips v. AWH Corp., 415 F.3d 1303, 1312 (Fed.Cir.2005) (en banc) (quoting Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed.Cir.1996)). That ordinary meaning “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,” after a reading of the entire patent. Id. at 1313.

To determine ordinary meaning, the court should review the same resources as would the person of ordinary skill in the art. Multiform Desiccants, Inc. v. Medzam, Ltd., 133 F.3d 1473, 1477 (Fed.Cir.1998). Those include “the words of the claims themselves, the remainder of the specification, the prosecution history, and extrinsic evidence concerning relevant scientific principles, the meaning of technical terms, and the state of the art.” Innova/Pure Water, Inc. v. Safari Water Filtration Sys., Inc., 381 F.3d 1111, 1116 (Fed.Cir.2004).

Of those resources, the patent specification is “the single best guide to the meaning of a disputed term.” Phillips, 415 F.3d at 1315 (quoting Vitronics, 90 F.3d at 1582). Moreover, while “the claims themselves provide substantial guidance as to the meaning of particular claim terms,” “the context in which a term is used in [a] claim” and the “[o]ther claims of the patent in question” are useful for understanding the ordinary meaning of a term “[b]ecause claim terms are normally used consistently throughout the patent.” Id. at 1314.

The patent specification does not stand alone, however. A court “should also consider the patent's prosecution history.” Markman v. Westview Instruments, Inc., 52 F.3d 967, 980 (Fed.Cir.1995) (en banc), aff'd, 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996). “Like the specification, the prosecution history provides evidence of how the [Patent and Trademark Office] and the inventor understood the patent.” Phillips, 415 F.3d at 1317 (citing Lemelson v. Gen. Mills, Inc., 968 F.2d 1202, 1206 (Fed.Cir.1992)). A court may also rely on extrinsic evidence, which is “all evidence external to the patent and prosecution history, including expert and inventor testimony, dictionaries, and learned treatises.” Markman, 52 F.3d at 980. In particular, “dictionaries, and especially technical dictionaries, ... have been properly recognized as among the many tools that can assist the court in determining the meaning of particular terminology.” Phillips, 415 F.3d at 1318 (citing Teleflex, Inc. v. Ficosa N. Am. Corp., 299 F.3d 1313, 1325 (Fed.Cir.2002)).

However, during claim construction, “[t]he sequence of steps used by the judge in consulting various sources is not important; what matters is for the court to attach the appropriate weight to be assigned to those sources in light of the statutes and policies that inform patent law.” Id. at 1324. For example, extrinsic evidence is “less significant than the intrinsic record in determining the ‘legally operative meaning of disputed claim language.’ ” C.R. Bard, Inc. v. U.S. Surgical Corp., 388 F.3d 858, 862 (Fed.Cir.2004) (quoting Vanderlande Indus. Nederland BV v. Int'l Trade Comm'n, 366 F.3d 1311, 1318 (Fed.Cir.2004)), and extrinsic evidence “is unlikely to result in a reliable interpretation of patent claim scope unless considered in the context of the intrinsic evidence.” Phillips, 415 F.3d at 1318–19. Thus, “[t]he 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.” Renishaw PLC v. Marposs Societa' per Azioni, 158 F.3d 1243, 1250 (Fed.Cir.1998). For that reason, a construction should not exclude an inventor's product or a preferred embodiment. See Osram GmbH v. Int'l Trade Comm'n, 505 F.3d 1351, 1358 (Fed.Cir.2007) (noting that claim construction conclusion can be reinforced by the fact that alternate constructions would exclude the “products that [a] patent[ ] w[as] designed to cover”); Modine Mfg. Co. v. U.S. Int'l Trade Comm'n, 75 F.3d 1545, 1550 (Fed.Cir.1996) (“[A] claim interpretation that would exclude the inventor's device is rarely the correct interpretation.”).

B. Summary Judgment

Pursuant to Federal Rule of Civil Procedure 56(a), a “court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Both the movant and non-movant must support their factual positions either by “citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other...