Leader Technologies Inc. v. Facebook Inc.

Filing 667

DECLARATION re 666 Reply Brief of Mark R. Weinstein by Facebook Inc.(a Delaware corporation). (Attachments: # 1 Exhibit Exhibit A, # 2 Exhibit Exhibit B, # 3 Exhibit Exhibit C, # 4 Exhibit Exhibit D, # 5 Exhibit Exhibit E, # 6 Exhibit Exhibit F - Part 1, # 7 Exhibit Exhibit F - Part 2)(Caponi, Steven)

EXHIBIT E

UNITED STATES DISTRICT CO:~’R~
EASTERNDIST~CT OF VIRGINIA

IP-XL Holdings, LLC,
Plaintiff
V.

Amazon.com, Inc.,
Defendant.

MEMO~NDUM IN SUPPORT OF DEFENDANT AMAZON.COM, INC.’S MOTION
FOR SUMMARY JUDGMENT OF NONINFRINGEMENTAND INVALIDITY

John F. Scalia, Esq. (VSB #46444)
David A. Kessler, Esq. (VSB #42315)
GREENBERG TRAURIG, LLP
1750 Tysons Boulevard
Suite 1200
McLean, VA 22.102
Tel: [phone]
David A. Zapolsky, Esq.
Vice Presidem & Associate General Counsel
AMAZON.COM, INC.
P.O. Box 81226
Seattle, WA 98108,1226
Tel: [phone]
David K. Callahan, P.C., Esq.
Thomas G. Pastemak, Esq.
KIRKLAND & ELLIS LLP
200 East Randolph Drive
Chicago, Illinois 60601
Tel: [phone]

UNDERSEAL: REFERS TO SPECIAL CONF!DENTIAL-O[ ~F$1DE, NON-.PROSECUTION COUNSEL ONLY INFORMATION

TABLE OF CONTENTS
Page
UNDISPUTED FACTS .................................................................................................................
2
I. THE ASSERTED CLAIMS OF THE ’055 PATENT ..............................................
2
II.

AMAZON.COM AND AMAZON’S 1-CLICK® FEA ~ ~TURE ................................
2
A.

Amazon’s 1-Click® Feature Is Part Of A System For Placing
2
Orders For Books And Other Goods ,On 1:he Int~met .................................

B.

ATM Technology in the mid.1990’s ...........................................................
5

C.

The Gatto ’055 Patent ..................................................................................
5

D.

5
The Prior Art Patems ...................................................................................

LEGAL STANDARDS, .... ........................................................................................................5
,..,
A.

Summary ~[udgment ....................................................................................5
:

B.

Noninfringement ..........................................................................................
6

C.

6
Invalidity ......................................................................................................

7
III. ARGUMENT ...........................................................................................................
Amazon’s 1-Click® Feature Does Not Literally Meet the Limitations of
IV.
8
Claim 1. of the ’055 Patent .......................................................................................
A.

Amazon’s 1-Click Feature Is Not "An Electronic Financial
Transaction System For Executing Financial Transactions .......................
1.
2.

B.

Amazon’s 1-Click® Feature is Not an "Electronic
Financial Transaction System." .............
i ............................. ~ ........... 8
Amazon’s 1-Click® Feature Is Not a System for
Executing Financial Transactions." .............................................
10

Am~zon’s 1-Click® Feature Does Not Meet the Limitation "The
Transactions Being Characterized By a Transaction Type and a
Plurality of Transaction Parameters." ........................................................
11
1.
2.

C.

D.

There Are No Types of Transaction ..............................................
11
There Is No "Plurality of Transaction Parameters." ......................
12

Amazon’s 1-Click® Feature Does Not Meet the Limitation "A
Terminal Device Selectively Connectable to the Central Controller
Through The Communications Network." ................................................
13
Arnazon’s 1,Click® Feature Does Not Meet The Limitation
’~Means For Storing User-defined Transaction Information, the

Transaction Information Comprising At Least One of User-defined
14
Transactions and User,defined Transaction Parameters.". ........................
There is no "Means For Storing User-defined Transaction
1.
Information, the Transaction Information Comprising At
Least One of User-defined Transactions and User-defined
¯
14
Transaction-Parameters"................................................................
E.

Amazon’s 1-Click@ Feature Does Not Meet The Limitation
15
"Display on a Single Screen Stored Transaction Information." ................

F.

Amazon’s 1-Click@ Feature Does Not Meet The Limitation
"Enabling a User to Use the Displayed Transaction Information to
Execute a Financial Transaction or to Enter Selections to Specify
16
One or More Transaction Parameters" ......................................................

Amazon’s 1-Click@ Feature Does Not Literally Meet the Limitations of
18
Claim 2 of the ’055 Patent .....................................................................................
A.

VI.

Amazon’s 1-Click@ Feature Does Not Meet the Limitation
"Predicts Transaction Information That a User of the Terminal
18
Will Desire Based on Stored Data for that User.". ....................................

Amazon’s l~Click@ Feature Does Not Literally Meet the Limitations of
20
Claim 9 of the ’055 Patent .....................................................................................
A.

-Amazon’s 1-Click@ Feature Does Not Meet The Limitation
"Means for Identifying a User Prior to Enabling the User to
20
Execute a Transaction." ..............................................................................

VII.

Amazon’s 1-Click@ Feature Does Not Literally Meet the Limitations of
21
Claim 15 of the ’055 Patent ...................................................................................

VIII.

Am .azon’s 1-Click@ Feature Does Not Literally Meet the Limitations of
21
Claim 25 of the ’055 Patent ...................................................................................
Due to the MANNER in which 1-Click@ ordering occurs, Amazon cannot
21
infringe the ’055 patent ..........................................................................................
A.
B.

Amazon Does Not Directly Infringe the ’055 Patent For Additional
21
Reasons. i ....................................................................................................
22
Amazon Canno.t Be Liable For Indirect Infringement ...............................

23
The asserted claims are invalid ..............................................................................
2
’
A.
The Prior Art Patents .................................................................. ............... 3
1.
2.

23
The Courts patent is invalidating prior art .....................................
24
The Tarbox patent is invalidating prior art ....................................

25
The Kelly patent is invalidating prior art .......................................
25
The :Single.Screen Limitation ....................................................................
3.

B.

ii

C,

The Prior Art Patents Each Contain the Single Screen Limitation of
26
Claim 1 .........................................................................................................
1.

Coutts Teaches the "Single Screen" Limitation Under
Either Amazon’ s or IP, XL’ s Proposed Constructions ...................
.26

2.

Tarb0x Teaches the ’~Single Screen" Limitation Under
Either Amazon’s or IPXL’s Proposed Constructions ....................
29

3.

Kelly Teaches the "Single Screen" Limitation Under
~XL’s Proposed Constructions .....................................................
33

D.

There is No Genuine Issue of Fact Regarding The Remaining
34
Limitations of Claim 1 ...............................................................................

E.

Coutts Contains The Additional Limitations of .,Claim 2 ...........................
35

F,

Th~ Additional Limitations of Claim 9 are Contained in Each of
36
the Prior Art Patents ....................................................................................

G.

36
Coutts Contains The Additional Limitations of Claim 15 .........................

H.

36
Courts Contains The Additional Limitations of Claim 2:5 .........................

I.

¯ C!aim25 of the ’055 Patent is Also Invalid under 35 U.S.C. § 112,
37
¶ 2 and § 101 as a Matter of Law ...............................................................
37
1.
Claim 2.5 is Indefinite Under 35 U.S;C. §112¶ 2 ..........................
2.

CONCLUSION .,,.., ....

38
Claim 25 is Also Invalid Under 35 U.S.C. §101 ...........................

3
,, ................................................................................................................ 9

ooo

111

TABLE OF AUTHORITIES
Page
Cases
Abbott Labs. v. Syntron Bioresearch Inc.,
334 F:3d 1343 (Fed. :Cir. 2003) ................................................................... ...................... 7
,
Allen Eng’g Corp, v. Bartell lndus., Inc.,
299F.3d .1336 (Fed. Cir. 2002) ..................................i ....................................................... 6
Anderson v. Liberty Lobby, Inc.,
477 U.S. 242 (1986) ............................................................................................................ 6
Aria Group Int’l, Inc. v. L.A. Gear California, Inc.,
853 F.2d 1557 (Fed. Cir. 1988) ................................................................................... 6, 28
Beckson Marine, Inc. v. NFM, Inc.,
292 F.3d 718 (Fed. Cir. 2002) .........................................................................................29
Black & Decker Inc. v. Catalina Lighting,
953 F~Supp, 134 E.~D. Va. 1997) ...............................................................................22, 23
Ce!otex Corp. v. Catrett,
477 U.S. 3!7 (!986) ....................................................................., ........................................ 6
Dayco Prods. Inc. r. Total Containment, Inc.,
329 F,3d 1358 (Fed, Cir. 2003) .........................................................., .............................. 6
De,per Prods, Inc. v. QSound Labs, Inc.,
!57 F.3d 1325 (Fed. Cir. 1998) ......................................................................................... 6
Exxon Research and Eng’g Co. v. United States,
265 E3d 1~371 (Fed, .Cir. 2001) .......................................................................................37
Ferguson Bearegard/Logie Controls v. Mega Sys.,
350 F.3d 1327 :(F.ed~. Cir. 2003) .......................................................................................22
Hewlett-Packard v. Baus.ch & Lomb,
909 F~2d !464 (Fed. Cir. 1990) ..............................................., ....................................... 22
Laitram Corp. v._ Rexnord,. Inc.,
939 F~2d i533 (Fed. Cir. 1991) ...........: .............................................................................1
Lang v. Pacif~.tc Marine and Supply Co., Ltd.,
895 F’:2d 761 (Fed. Cir. 1990) .........................................................................................21

Mqnvi!le Sales Corp. v. Paramount Sys., Inc.,
9t7 F;2d: 544 (Fed. Cir. 1990) ...................................................................................22, 23
Moba, B, V. v, Diamond AUtomation,
325 F.3ti 1306.(Fed. Cir. 2003) ..................................................................., ................... 22
PhilliPs v. AWHCorp.,363 F.3d 1207 (Fed. Cir. 2004) ...............................................................6
Price v. Symsek,
988 F,2d 1187 (Fed, Cir. 1993) .......................................................................................24
Singh v. Brake,
222 F.3d 1362 (Fed Cir. 2000) ........................................................................................ 4
2
TechSearch, L~L, C. v. Intel Corp,,
286 F,3d !~360.(Fed. Cir. 2002) .........................................................................................6
Udin v. J.Kaufman Iron Works, Inc.,
342 F. Supp. 1090 (S.D,N.Y. 1972) ................................................................................... 7
University of Rochester v. G.D. Searle & Co., Inc.,
358 F,3d 916 (Fed; Cir. 2004) ...... , .................................................................................... 7
Statutes
15 U.S.C. § 1693h .........., .............................................................................................................10
15.U.S.C. 1693a .................................................................................. ~ ........................................... 9
35 U.S,C. § 271(a) ........................................................................................................................ 21

ii

~ s~etry with its prohibited attempt to stretch the claims of the ’055 patent beyond
t_h_eir clear meaning, as detailed in Am .~.on’s claim construction, brief, IPX-L attempts to apply
claims coveri.ng only financial transactions that can be performed on an electronic fund transfer
system ("EFT") to a feature for ordering books and other products using the Interact. Amazon is
not an EFT system; it does not execute financial-transactions or perform, any other activity on an
EFT system. Amazon is an Intemet retailer--consumers go to Amazon.corn to order books and
other goods using the Intemet. One way consumers can order goods is to use Amazon’s 1Click® feature (the only aspect of Amazon that IPXL accuses of infringement). The 1-Click®
Fea~re does not execute financial transactions on an EFT system--Amazon contracts with third
party financial institutions tO process and settle the payments for the goods that Amazon
customers have ordered. This Court should grant summary judgment that the 1-Click® Feature
does not literally infringe the. asserted claims of the ’055 patent.1 See Laitram Corp. v. Rexnord,
Inc., 939 F.2d 1533, 1535 (Fed. Cir. 1991) ("To establish infringement, every l~.tation set forth
in a patent claim must be found in an accused product or process exactly or by a substantial
equivalent.").
With respect to the invalidity of the ’055 patent, this Court’s task is simple; IPXL’s
¯ expert disputes the presence of only the "single screen" limitation in the Coutts prior art patentif ..Amazon shows the Court the presence of a "single screen" in Courts, every one of the asserted
claims falls. If Amazon shows .the "single screen" limitation in Tarb0x and Kelly, claims 1 and 9
are invalid in view of thoseprior art patents. Finally, Claim 25 is statutorily ~in~a!id.
1

IPXL has not accused Amazon’s system of infringement under the doctrine ,of equivalents.
See May 28, 2004 Supplemental Answers to Amazon.corn, Inc.’s First Set of:Interrogatories
to Plaintiff IPXL Holdings, LLC at 7, attached as Exhibit 4; Felten Infringement Report at 4,
attached as Ex. 3; :~une 16, 2004 Deposition. of Edward W, Fe!ten at 1741:8-176:11, attached
as Ex. 5, and is precluded from doing so now. Therefore, Amazon¯-need only show that there
is no literal inMngement .for summary judgment to be granted.

UNDISPUTED FACTS
I.

~HE~ASSERTED.CLAI~S OF THE ~055 PATENT
The ’055 ..patent is ~titled "Electronic Fund Transfer or Transaction System" See Ex. 1,
’055 patent.
The patent, has 1 independent claim and 31 claims that are dependent from Claim 1. See
Ex. 1, ’05.5 patent.
IPXL a~serts that .Amazon infringes independent Claim 1 and dependent claims 2, 9, 15,
and. 25.2 See Ex. 2; Ex. 3.
Claim 1, the independent claim, refers to "a system for processing financial transactions,"
which the patent specification makes plain "relates generally to electrOniC transaction
network sys~tems and more particularly to electronic fund transfer systems such as
automated, teller machines." See Ex. 1, ’055 patent at 1:11-14.
The system of Claim 1 is designed to execute "a variety of activities that are or may be
performed using an EFT ["electronic fund transfer"] system." See Ex. 1, ’055 patent,
Abstract, 5:38-39.

!!.

AMAZON, COM AND AMAZON’S 1.CLICK® FEATURE
This section describes Amazon’s retail 1,Click® feature, the only aspect of Amazon’s

systems that .is .accused in the expert report on infringement proffered by IPXL’s expert, Dr.
Eel_ward Felten (the "1.Click® Feature"). See Fe!ten In~ngement Report at 13~22, attached as
E;~hibit 3.
Amazon’s 1-Click® Feature Is Part Of A System For Placing Orders For
Books And Other Goods On The Internet.
An~_ _az0n’s !,Click® Feature is part of a system for placing, orders for books and other
goods on .the Internet. Li~ke any traditional catalogue,order Company, Amazon only seeks
payment for ordered goods if the order is fulfilled, and goods are sent tO the customer.
Declaration of Douglas Heimburger ("Heimburger Decl."), ¶¶ 2-~3, attached as Ex. 13.
Using 1-Click®, an Amazon user can order an item once she has found the item. on
Amaz0n’s website, and has enabled the 1-Ciick® Feature. See Ex. 9.
To begin the ordering process,, a user must be on the Amazon.corn website, which can be
reached via the Intemet by typing in the URL "ww~.amazon.com," See Ex. 7.
2 The claim language for each asserted claim is set out in the attached Exhibit 6.

A user’s personal computer communicates with Amazon’s servers through the Intemet.
hformation is transferred back and forth betwe.en the user’s computer’, and Amaz0n’s
servers u~ing the HTTP protocol. HT.TP is a "stateless," or connection!ess protocol that
breaks mesaages down into a number of packets t, hat are route.d through the ,Internet by a
process called packet-switching, which allows packets to be transmitted along different
paths and arrive at .various timesmnot necessarily in the s~e order as they were. sent.
See Declaration. of Gene Pope ("Pope Decl."), ¶¶ 11-12, attached as Ex. 21.
10.

Unless the item appears on the "Welcome" page for that user, the user must normally
navigate through web pages to find the item. For example, the user may enter search
terms, into the keyword search box and click "Go!" to be taken to a search results page.
See Ex. C to June 2, 2004 Expert Repo.rt of Donal O’Mah0ny, Ph.D.,. Regarding. the
Noninfringement By Amazon of United States Patent No. 6,149,055 ("O’Mahony
Report"), attached a~ Ex. 8.

11.

The user c_an then select one of the results from the search results page by clicking a link
for that item. Altemativ.ely, the user can use links;on the "Welcome!’ page to browse lists
of items. All of th.ese actions will take the user to new web pages. Men a user finds
interesting item, she can click a link for that item, and be taken to theproduct detail page
for that item. See Ex. D to O’Mahony Report, attached as Ex. 8; see also Ex. 9.

12.

This product detail :page-contains more information about the item, including an estimate
of how long it will take for the item to be available for shipment. If the user wants to
order the item, she can place the order by either ~pushing the "l-Click@" button on ,this
web page,. Or by selecting the "Add to Cart" option, which will add the order to the user’s
virtual "shopping cart" and allow the user to either continue browsing for items on the
website, to leave the website entirely, or to proceed to checkout. Pushing the 1-Click@
button to order a retail item from Amazon’s inventory merely creates an order (or
modifies an existing order by adding an item to: it). In addition, after clicking the 1Click@ button, the user is taken to a new page. See Ex. K to O’Mahony Report, attached
as Ex. 8; see also Ex, 9.

13.

After the user orders with 1-Click@ the order is ~not immediately acted upon, however.
Instead, it is put in a :holding state for at least 90 minutes. During the 90 minute holding
period the user may.add to, modify, or cancel the order freely. For example, the user can
review or edit her 1-Click@ orders, change address, ship method, payment, item
qumtities,, add gift-wrap, or apply a gift ce~ificate or promotional ~deto. her order---all
of which will change the .amo ~tmt the user will: owe if the order is fulfi!ied. See Ex. K to
O’MahQny Report~ attached as Ex. 8; Ex. 12.

14.

I.f the user m~es any changes to the order, then the 90,minute holding period starts
anew. An order can be in a holding state for an unlimited amount of time, and no
financial transaction, will occur. A user can also cancel each item selected using the 1Click@button and end. up with nothing in her order. If the user does this, then no
payment is ever made or processed. See April 27, 2004 Deposition of Jermifer E. Loflin,
at 236:4-18, attached as Ex. 10.

15.

Additionally, if a user orders an item using 1-Click@, and within 90 minutes of that
order, attempts to order that s~e item using t-Click®, the item is only ordered once.
The .user’s clicking on the 1-Click@ button multiple times will be effectively ignored.
See .October ! 2, 2001 D.eposition of Peri Ha~man at 93: 8-16, attached :as Ex. 11.

16.

Even after the 90~mi.n.ute window has expired, upuntil the point that the order enters the
~’shipping soon" sta~s, the order can still be modified, combined with other confirmed
orders, or cancelled See Ex. 12. Thus, in the case of out of stock items or pre-ordered
items, for ex~ple~ a user may actually have weeks or months to add to, cancel, or
modify a l:,Click® order.

17.

It is only after the order is finalized and shipped that Amazon seeks payment for the
goods. See Heimbu~ger Decl., ¶ 2, attached as Ex. I3.

18.

Am~on does not seek payment until goods are about to be shipped because until
shipping, the :amount(s) to be charged to the customer is (are) not certain. Further,
because A~azon seeks payment only when an item is ~about to be shipped, and because
the items making up an .order may ship separately from one another, Amazon may end up
seeking n~erous sep~ate payments associated with a single order. Id.

19.

Thus, there is no d~re¢t or constant correlation between the :n-.umber of times an Amazon
user pushes .the !,Click@ button and the number .of payments, if any, that Amazon will
eventua!ly seek, Id:

20¸,

In his exPert report, Dr. Felten ordered two Scp~ate items d~ng his visit to
Amazon,corn, both of which he counted as separate ’;.financial V~sactions." Yet his
credit card bill reflects only a single transfer of funds from his b~ to Amazon’s b .ank.
Felten Infringement Report at 15, 19, attached as Ex. 3; Felten, 008) attached as Ex. 28.

¸1.

Because ~az0n is a retailer and not a bank, it does not itself process and settle the
payments ifor the goods it has shipped. See Heimburger Decl. ¶ 2, attached as Ex. 13.

22.

Instead, ~azon collects the credit card/debit card information and related order
information that it receives and sends it in batches to third,party payment processors
a~ting .as acquiring .banks, and those payment processors present the information to and
settle the .payment with the credit card/debit card.associations. The payment processors
thereafter remit the: ~nds, less any applicable fees~ to one of.Amazon~s depository b~s.
Heimburger :Decl. ¶15, attached as Ex. 13.

23,

Ap~ from :sending the appropriate information to its designated: payment processors,
Aragon isn0t involved.in the payment processing in any way, and would not, in fact, be
able to be inVoNed since it is not an acquiring bank. Id.

24.

The "recommendations,’ displayed after a user clicks the 1-Click@. button are not based
on any stored data.:f0r that user. Instead, .part of the HTTP request that is sent when a
user clicks the 1.Cljek®. button tells the system to look up and display a list of similar
items. The list is based on the most popular items among other customers who also
ordered the referentitem.

4

B.
25.

ATM Technology in the mid-1990’s

In the 1996 timeframe, branch ATMs were typically connected to a host central controller
through the use of (usually proprietary) communication lines such as telephone lines. In
each case, the ATMs were connected so that information being transmitted between the
ATM and central controller flowed through a single, defined path.
C.

The Gatto ’055 Patent

26.

The application that issued as the ’055 patent was filed on June 26, 1996 and is a
continuation in part application of an application filed on April 13, 1995. The ’055
patent issued on November 21, 2000. Ex. 1.

27.

Other than uncorroborated inventor testimony, there is no evidence of record that
supports an invention date of the inventions claimed in Claim 1 prior to the filing date of
the ’055 patent application. See Ex. 29, May 18, 2004 IPXL’s Second Supp. Resp. to
Amazon’s 1st Set of Interrog. at 3; Ex. 14, April 28 Gatto Tr. at 8:25-10:19.

28.

Amazon first became aware of the ’055 patent in March 2002, a-fter receiving a letter
from James Gatto. After becoming aware of the ’055 patent, Amazon obtained and relied
upon opinion of counsel. Ex. 23, April 21 Amazon’s Resp. 1st Set Interrog. at 1-2.
D.

The Prior Art Patents

29.

The application that issued as the Tarbox patent was filed on December 16, 1994 and
issued on January 6, 1998. See Ex. 15, U.S. Patent No. 5,705,798.

30.

Tarbox was cited in an Information Disclosure Statement ("IDS") filed by the applicant,
Mr. James Gatto, on May 4, 2000, more than three months after the PTO mailed a Notice
of Allowability of the ’055 patent application. See Ex. 16, IPXL 00116-00118.

31.

Tarbox was cited to Mr. Gatto in a European Search Report for a related application
dated February 22, 1999, more than a yearprior to being disclosed to the PTO on May 4,
2000. See Ex. 17, IPXL 00119-00121.

32.

The application that issued as the Courts patent was filed on November 15, 1993 and
issued on February 14, 1995. See Ex. 18, U.S. Patent No. 5,389,773.
Courts was cited in an IDS filed on November 22, 1996. See Ex. 19, IPXL 00078-00082.
The Kelly patent issued on May 15, 1984. See Ex. 20, U.S. Patent No. 4,449,186.
LEGAL STANDARDS
A.

Summary Judgment

Summary judgment is appropriate where "there is no genuine issue as to any material
fact" and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); see
also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Phillips v. AWH Corp., 363 F.3d 1207,
1211 (Fed. Cir. 2004). This Court must view the evidence in the light most favorable to IPXL,
which must do more than merely raise some doubt as to the existence of a fact for that fact to be
in genuine dispute; it must present evidence sufficient to require submission of the fact to the
jury. Avia Group Int’l, Inc. v. L.A. Gear California, Inc., 853 F.2d 1557, 1560 (Fed. Cir. 1988)
(citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986)).
B.

Noninfringement

To prove infringement, IPXL must prove that each and every limitation of the asserted
claims is found in the accused product. Allen Eng’g Corp. v. Bartell Indus., Inc., 299 F.3d 1336,
1345-46, 1357 (Fed. Cir. 2002) (reversing finding of infringement; court failed to compare each
claim limitation to the corresponding element of the accused products); Desper Prods., Inc. v.
QSound Labs, Inc., 157 F.3d 1325, 1337-38 (Fed. Cir. 1998) (affirming summary judgment of
noninfringement affirmed claim element missing from accused devices). Literal infringement,
which is all that IPXL has alleged, requires that the accused device contain each limitation of the
claim exactly; any deviation precludes a finding of literal infringement. See TeehSearch, L.L.C.
v. Intel Corp., 286 F.3d 1360, 1371 (Fed. Cir. 2002).
C.

Invalidity

Anticipation is found where each and every element of a claim is found, either expressly
or inherently, in a single prior art reference. See Dayeo Prods. Inc. v. Total Containment, Inc.,
329 F.3d 1358, 1368 (Fed. Cir. 2003) ("the dispositive question regarding anticipation [i]s
whether one skilled in the art would reasonably understand or infer from the [prior art
reference’s] teaching that every claim element was disclosed in that single reference"). A patent

6

is presumed valid, and Amazon must prove invalidity by clear and convincing evidence. See
University of Rochester v. G.D. Searle & Co., Inc., 358 F.3d 916, 920 (Fed. Cir. 2004) The clear
and convincing standard does not shift depending on whether a piece of prior art was cited
during prosecution of a patent at issue. See Abbott Labs. v. Syntron Bioresearch Inc., 334 F.3d
1343, 1357 (Fed. Cir. 2003) ("presumption of validity remains the same whether or not the art
relied upon at trial was before the examiner"). Where a party shows by clear and convincing
evidence that the asserted claims are invalid as anticipated in view of particular prior art
references, the fact that those prior art references was disclosed to the PTO does not prevent a
finding of invalidity. See e.g., Udin v. J.Kaufman Iron Works, Inc., 342 F. Supp. 1090, 1100-01
(S.D.N.Y. 1972)
III.

ARGUMENT
No reasonable jury could find that Amazon’s 1-Click® Feature, a feature for placing

orders for goods over the Internet, contains each and every element of the asserted claims of the
Specifically
’055 patent, which relate to the electronic execution of financial transactions.
Amazon’s 1-Click® Feature:
¯ is not an "electronic financial transaction system";
¯ does not execute "financial transactions"’
¯ allows no selection of"transaction types’"
¯ does not present a "plurality of transaction parameters’"
¯ does not contain "a terminal device selectively connectable to the central controller
through the communications network"’
¯ does not contain "means for storing user-defined transaction information, the
transaction information comprising at least one of user-defined transactions and userdefined transaction parameters"’
¯ does not "display on a single screen stored transaction information"’
¯ does not "enabl[e] a user to use the displayed transaction information to execute a
financial transaction or to enter selections to specify one or more transaction
parameters"’
¯ does not "predict[] transaction information that a user of the terminal will desire
based on stored data for that user"; and

does not contain "means for identifying a user prior to enabling the user to execute a
transaction."
Amazon’s 1-Click@ Feature is missing virtually every limitation of the claims of the ’055
patent; this Court must grant summary judgment if it finds even a single limitation missing. The
asserted claims are also invalid in view of Courts, Tarbox, and Kelly, and Claim 25 is statutorily
invalid.
IV.

AMAZON’S 1-CLICK® FEATURE DOES NOT LITERALLY MEET THE
LIMITATIONS OF CLAIM 1 OF THE ’055 PATENT.
Amazon’s 1-Click@ Feature fails to meet each and every limitation of Claim 1, applying

either Amazon’s or IPXL’s proposed constructions of this claim.
A.

Amazon’s 1-Click Feature Is Not "An Electronic Financial Transaction
System For Executing Financial Transactions."
1.

Amazon’s 1-Click@ Feature is Not an "Electronic Financial
Transaction System."

Amazon’s 1-Click@ Feature is not an "electronic financial transaction system," nor is it
part of any such system. The ’055 patent explicitly defines the term "transaction" as "intended
to broadly describe a wide variety of activities that are or may be performed using an EFT3
system." Ex. 1, ’055 patent, 5:37-39. Thus, since the term "transaction" as used in the patent
means one of the activities that can be performed using an "EFT ("electronic fund transfer")
System," the "electronic financial transaction system" of Claim 1 must be such an EFT
(electronic funds transfer) system.
There is no genuine dispute of material fact that Amazon’s 1-Click@ Feature is not either
by itself, or in conjunction with any other Amazon system, an EFT system. The meaning of the

The ’055 patent explicitly defines "EFT" to mean "electronic fund transfer." Ex. 1, ’055
patent, Abstract.

term EFT system is well-known (and defined by federal law), as explained in Amazon’s claim
construction brief. The Electronic Fund Transfer Act, 15 U.S.C. 1693a, defines EFT as follows:
(6) the term "electronic fund transfer" means any transfer of funds,
other than a transaction originated by check, dratl, or similar paper
instrument, which is initiated through an electronic terminal,
telephonic instrument, or computer or magnetic tape so as to order,
instruct, or authorize a financial institution to debit or credit an
account. Such term includes, but is not limited to, point-of-sale
transfers, automated teller machine transactions, direct deposits or
withdrawals of funds, and transfers initiated by telephone.
Amazon’s 1-Click® Feature is not such an EFT system. Amazon’s 1-Click® Feature is a
feature for placing orders for goods. Amazon’s 1-Click® Feature does not provide for the
"transfer of funds.., which is initiated through an electronic terminal.., or computer.., so as
to order, instruct, or authorize a financial institution to debit or credit an account." In fact,
Amazon is even further removed from EFT systems than are "brick and mortar" retail stores,
which may well have point-of-sale ("POS") terminals in the store that customers can use to pay
for purchases. Amazon has nothing like that, but instead passes on payment requests to its thirdparty payment processors, similar to a mail order house. Heimburger Decl. ¶¶ 2, 4, attached as
Ex. 13.
Further, unlike EFT systems, which immediately execute EFTs according to a user’s
instructions, as set forth in its Conditions of Use, no matter what order a customer places using
1-Click®, Amazon may not accept the user’s order; it often refuses to accept orders where there
is a suspicion of credit card fraud, or a history of fraudulent transactions by the customer placing
the order. See Loflin Deposition at 77:23-78:12, attached as Ex. 10. Moreover, even if Amazon
wants to accept an order, there are times (e.g., when an item is out of stock and cannot be
obtained) when Amazon simply cannot fulfill the order, in which case Amazon never requests
payment for that order. Thus, a 1-Click® order does not obligate Amazon to request that the

9

customer’s credit card be charged for an order; Amazon never makes such a request if it either
will not or cannot fulfill the order.
Tiffs is a far cry from the obligations that attach to financial institutions and financial
services companies executing EFTs under the EFT Act. In Amazon’s case, customers use 1Click® to place orders that Amazon can choose to fulfill or not with no legal consequence to
Amazon. In the case of an EFT system, if a customer uses the EFT system to instruct a financial
institution to transfer funds, the fund transfer is executed--the EFT has no choice, and may be
held liable under 15 U.S.C. § 1693h if it does not promptly effect the instructed fund transfer.
2.

Amazon’s 1-Click® Feature Is Not a System for "Exeenting Financial
Transactions."

Amazon’s 1-Click® feature is used only to order goods, not for "executing financial
transactions." The differences between 1-Click® orders and EFT executions are manifest.
Using 1-Click®, an Amazon customer can order an item. No fund transfer, or financial
transaction, is executed by clicking the 1-Click®, however. Instead, pushing the 1-Click®
button creates a new order or modifies an existing order for products, which is put in a holding
state for at least 90 minutes. See supra II.A., ¶ 13-14. During that 90-minute holding period the
customer may add to, modify, or cancel the order; each change starts the 90-minute holding
period starts anew. Further, if a user orders the same item using 1-Click® within that 90-minute
holding period, the item is only ordered once. That is, the user’s clicking on the 1-Click® button
multiple times will be effectively ignored. Additionally, the order can continue to be changed or
cancelled up until the point that the order enters the "shipping soon" status. See supra II.A., ¶
15-16.
Once the order is finalized and the goods making up the order are shipped, Amazon’s
system is done processing the order. Then and only then do fund transfers occur. In an entirely

10

separate transaction, Amazon sends credit card information and amounts to be charged in batches
to one of its several third-party payment processors, who actually execute financial transactions
to charge customers’~ cards. See supra II.A., ¶ 21-23. Moreover, because Amazon only seeks
payment once the item is shipped, and because the items making up an order may ship separately
from one another, there may end up being numerous charges associated with a single order. See
supra II.A., ¶ 18. Thus, there is no direct or constant correlation between the number of times a
consumer uses 1-Click® and the number of financial transactions, if any, that eventually will be
carried out. Heimburger Decl. ¶ 5, attached as Ex. 13.
For the same reasons, the 1-Click® Featttre does not infringe even this Court adopts
IPXL’s definition. IPXL defines this claim term as "any financial transaction performed
electronically" and gives a list of examples of financial transactions. Each of the examples given
by IPXL are for electronic fund transfers, none relate to placing orders. Even the example that
IPXL relies on extensively--paying for the purchase of goods or servicesqproves Amazon’s
poi.nt. It could not be more clear that selecting or ordering goods as part of a purchase is separate
and apart fi’om paying for the purchase of the goods. 1-Click® is used to select the goods for
purchase. Paying for the purchase of the goods is handled by a third party if and when Amazon
fills the order and ships the goods, which may happen days, if not weeks, after the order is
placed, or never at all.
In sum, Amazon’s 1-Click® Feature is not a system for executing financial transactions,
nor does it allow users to execute financial transactions. Amazon does not meet this claim
limitation and this Court should grant summary judgment of noninfringement.
B.

Amazon’s 1-Click® Featnre Does Not Meet the Limitation "The
Transactions Being Characterized By a Transaction Type and a Plurality of
Transaction Parameters."
1.

There Are No Types of Transaction.

11

l.Click@ ordering does not allow the execution of different types of financial
transactions. Under both Amazon’s and IPXL’s constructions, not only does 1-Click@ ordering
not havet a plurality of transaction typesi but the one function performed--placing orders--is not
and does~ not involve a transaction type.4
¯ Under Amazon’s definition, a "~ansaction type" is "an account balance inquiry or kind or
type of asset transfer that is selected ias part of a financial transaction." IPXL’s definition
specifies that a "transaction type" can be "any type of financial transaction," and as discussed
above, PXL’s definition of "financial transaction" is a series of examples, each of which
examph involves the transfer of funds {or balance inquiry). Obviously the mere clicking on the
1-Click@ button to place an order does.’ not involve a balance inquiry or funds transfer, as has
been ex’~lained above, but instead sirnply places conditional order (since it may be freely
cancelle~ or modified in at least the ne.xt 90 minutes). infra II.A., ¶ 13-14. Under either
See
construe :ion there are no "transaction types."
2.

There Is No "Plurality of Transaction Parameters."

this Court adopts Amazon’s ~.construction of "transaction parameters," Amazon’s 1Click@ Feature does not meet this li .mitation for additional reasons. Amazon’s construction
limits a~ "transaction parameter" to "information necessary to define a given financial
,transaction." "Financial transactions" are activities performed by an electronic fund transfer
system, including fund transfers or blalance inquixies. Thus, the only transaction parameter
associat,.~d with an order placed as a result of clicking Amazon’s 1-Click@ button is the credit
card inf~rmation that will be used if the order is fulfilled; there is no "plurality" of transaction
paramet~ers from which to select.Other types of customer information such as product choice,

4

SeeEx. 31.

12

shipping address, and speed of shipping are not associated with a fund transfer and are not
transaction parameters. Amazon does not meet this claim limitation and this Court should
independently grant summary judgment of noninfringement.
C.

Amazon’s 1-Click@ Feature Does Not Meet the Limitation "A Terminal
Device Selectively Connectable to the Central Controller Through The
Communications Network."

If this Court adopts Amazon’s construction,5 Amazon’s 1-Click@ Feature does not meet
this limitation. Amazon’s definition requires a single defined, dedicated, path is maintained for
the duration of the transmission. This is not the case with the Internet, which is a connectionless
system without such a single defined, dedicated, path of communication. See Declaration of
Gene Pope, ¶¶ 11-12, attached as Ex. 21.
The Interact is a public medium created by the combined systems of many public and
private entities. See generally Reno v. ACLU, 521 U.S. 844, 849-854 (1997) (description of the
Interact). Unlike an ATM network, in which data flows only through a private, single-path,
network data transmitted via the Internet travels along diverse and changing paths unknown to
the user and owned by many different entities. See Lichstein Decl., ~ 2-4, attached as Ex. 30;
Pope Deck ¶¶ 11-13, attached as Ex. 21. Customers placing orders on Amazon’s website clearly
do not have a single defined, dedicated, path to Amazon’s central controller that is maintained
for the duration of the transmission. Rather, HTTP protocol is a "stateless," or connectionless,
protocol system; the path changes from one second to the ne£t, with packet-switched data
transmitted back and forth along numerous different routes, resulting in the data sometimes
arriving at the destination computer out of order. See id. In addition, both the PC and the host
server communicating via the Internet are "intelligent" when it comes to addressing where the

See Ex. 31.

13

packet-switched data they are sending should go. See O’Mahony Report at 12, attached as Ex. 8.
This is completely different from the world of ATM systems at the time of the ’055 patent
invention. In ATM systems, only the central controller or terminal controller selects which
terminal to connect with the central controller in order to communicate information. See
Lichstein Decl. ¶ 2-31, attached at Ex. 30. The terminals have no independent ability to
determine when they communicate, nor do they exercise control over where their data is sentwit
all passes through a single defined, dedicated, path to the Central Controller. Id. at ¶ 2-5.
Because of the way the Internet functions, Amazon’s system does not infringe, and this Court
should grant summary judgment.
D.

Amazon’s 1-Click® Feature Does Not Meet The Limitation "Means For
Storing User-defined Transaction Information, the Transaction Information
Comprising At Least One of User-defined Transactions and User-defined
Transaction Parameters."
1.

There is no "Means For Storing User-defined Transaction
Information, the Transaction Information Comprising At Least One
of User-defined Transactions and User-defined TransactionParameters."

If this Court adopts Amazon’s definition of"means for storing user-defined transactions,"
the 1-Click® Feature does not infringe.6 First, as set out in Amazon’s claim construction brief at
17-20, under Amazon’s construction the only means for storing user defined transaction
information that is covered by the claims is a user card. Because no user card is used to order
with 1-Click®, this limitation cannot be infringed under Amazon’s construction.
Second, Amazon further defines this claim limitation as requiring the system to store at
least one user-defined transaction (which is comprised of both a user-defined transaction type

See Ex 31.

14

and a plurality of user-defined transaction parameters), and at least one additional user-defined
transaction parameter.
As explained earlier, Amazon does not store transaction types,---and certainly does not
store user defined transaction types. The only function accused by IPXL in Amazon’s system is
the ordering of products using the 1-Click® Feature, see Ex. 3 at 13-22, which involves no
transaction type.
Even if one were to view the ordering of products with 1-Click® to be a "transaction
type," there would still be only a single transaction type. Because a customer ordering with 1Click® is simply placing orders for products, Amazon’s system doesn’t have a way to store
different "types" of transactions--there are no other types.
Thus, Amazon does not meet this claim limitation and this Court should grant summary
judgment.
E.

Amazon’s 1-Click® Feature Does Not Meet The Limitation "Display on a
Single Screen Stored Transaction Information."

Amazon’s 1-Click® Feature does not meet the "single screen" limitation under either
proposed construction.7 There is no infringement if one applies IPXL’s construction because a
user who ultimately orders using 1-Click must navigate through one or more web pages in order
to find and select the item that she would like to order. See supra, II.A., ¶ 7-10. Indeed,
according to IPXL’s constructions, because IPXL suggests that the name of an item is a
"transaction parameter," then in order to reach the product detail page, where the user may
choose to order the product using the 1-Click® feature, the user must "first endur[e] a series of
transaction entry screens," which does not meet the claim limitation as construed by IPXL.
Amazon’s 1-Click® Feature therefore fails to meet the "single screen" limitation and does not

See Ex 31.

15

infringe this claim. This Court should grant summary judgment of noninfringement on this
ground.
Applying Amazon’s proposed construction this limitation is not met because Amazon’s
system does not display stored "transaction information." As explained supra section W.B.1.
Amazon’s system does not storewand therefore cannot display--a transaction type. In addition,
under Amazon’s definition of"transaction parameters," Amazon’s system does not display userdefined parameters associated with any financial transaction, as explained supra section IV.B.2.
Amazon does not meet this claim limitation and this Court should grant summary judgment.
F.

Amazon’s 1.Click@ Feature Does Not Meet The Limitation "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"

Under both parties’ definitions, this claim limitation requires display of transaction
information sufficient to allow the. user to choose between executing a user-defined financial
transaction or specifying one or more transaction parameters.8 Because of this requirement,
Amazon’s 1-Click® Feature does not infringe this limitation.
First, there is no display of transaction information that allows the user to execute a userdefined financial transaction. As explained above, Amazon’s 1-Click@ Feature does not display
on a single screen transaction information, nor does it display parameters related to a financial
transaction.
In addition, Amazon’s 1-Click@ Feature does not "execute" a financial transaction under
either Amazon’s or ]PXL’s constructions of that term. Amazon defines "execute" as "carry out
fully" or "put completely into effect." IPXL defines "execute" as "to cause to carry out or
perform the transaction ’without the need for further inputs or selections by the user.’"
8 SeeEx. 31.

16

Arnazon’s 1-Click® Feature is part of a system for placing orders for goods on the Internet. By
clicking the 1-Click® button, a user submits an order which may or may not result in a financial
transaction somewhere down the line. The user does not (and cannot) complete a financial
transaction by instructing, the EFT system to commence a transfer of funds (or balance query).
Nor does (or can) the user cause to carry out or perform the transaction without the need for
further inputs or selections by the user. As explained above, many things can happen before a
financial transaction takes place, if it takes place at all.
Further, to execute a financial transaction under either Amazon’s or I:PXL’s definition,
the dollar amount of the financial transaction must be known and set. Because a user can add
new 1-Click® orders within 90 minutes of the latest modification to the order, there is no way to
know what the final amount that will be charged to the credit card will be until the order is
fulfilled. And, of course, the order might never be fulfilled if, for instance, Amazon chooses not
to fulfill it or if the product ordered is not available. Additionally, changing the shipping
method, changing item quantities, adding gift wrap, or applying a gift certificate or a
promotional code to the order all will also change the amount to be charged to the credit card if
the order is fulfilled.
If this Court adopts Amazon’s construction, there is no display of transaction information
that allows the user to specify one or more transaction parameters. As explained in detail above,
Amazon’s 1-Click® feature does not display on a single screen transaction information, nor does
it display parameters related to a financial transaction on such a single screen. Hence, there is no
way for a user to use such displayed transaction information to specify one or more transaction
parameters. Using 1-Click® ordering, a user cannot specify any financial transaction parameters
at all. For example, a user cannot directly select the credit card to be used from the "ship to"

17

dr0pdown menu. Instead, a user may only select an address from the dropdown menu to which
the product is to be shipped.
For all of these reasons Amazon’s 1-Click® Feature does not meet this limitation, and
this Court should grant summary judgment.
V.

AMAZON’S 1-CLICK® FEATURE DOES NOT LITERALLY MEET THE
LIMITATIONS OF CLAIM 2 OF THE ’055 PATENT.
Claim 2 is dependent on Claim 1. Accordingly, it is not infringed if all of the

limitations of Claim 1 are not met. Because 1-Click® does not meet all the limitations of Claim
1, Claim 2 is not infringed. In addition, Amazon’s 1,Click@ Feature does not meet Claim 2’s
added limitation--"predicts transaction information that a user of the terminal will desire based
on stored data for that .user."
A.

Amazon’s 1.C!iek® Feature Does Not Meet the Limitation "Predicts
Transaction.Information That a User of the Terminal Will Desire Based. on
Stored Data for that User."

IPXL’s expert, Dr. Felten, offers only one example of infringement of this Claim: "lClick® Thank You pages, as illustrated in Appendices 15 and 16,... offer the user 1-Click®
Ordering of items based on stored information about what the user has ordered previously." See
Ex. 3, Felten Report at 20, Appendices 15, 16. Amazon’s 1-Click® Feature does not meet this
limitation under either Amazon’s or IPXL’s construction.
First, under Amazon’s and IPXL’s construction,9 Amazon’s 1.Click® Feature does not
foretell transaction information to display to a user based upon data stored by that user .for
rep_eated use in future tr.ansactions. As discussed above, Amazon’s 1-Click® Feature stores only
one kind of financial transaction parameter -- credit card information. Amazon’s system does
not predict which credit card information to use with which 1-Click® purchase. Instead, this has
9

SeeEx. 31.

18

been set as a default for each shipping address and no prediction related is needed or done. Ex.
2_6, Felten Tr. at 522:11-20 (defaults not predictions under IPXL’s definition).
Second, even under IPXL’s broader definition, Amazon’s "recommendations" are not
predictions "based at least in part on stored data associated with that user." The
"recommendations" shown in Appendices 15 and 16 to Dr. Felten’s report are not based on
stored under data. Instead, the clicking of the 1-Click® button, while simultaneously
constructing an order and storing it in a holding state, acts like clicking on an "13xplore Similar
Items" link and returns a list of most similar items among other customers who have 1-Clicked
the same item, such as the lists shown in Appendices 15 and 16 to Dr. Felten’s report. This
process involves no use or reference of stored data for the user who has just clicked the 1-Click®
button. See Pope Decl., ¶ 5, attached as Ex. 21.
Finally, for any 1-Click® orders made from the similar items lists shown in Dr. Felten’s
Report, the user not only cannot "enter selections to specify one or more transaction parameters,"
but the drop-down menu that allows a user to select from a plurality of shipping addresses on a
product detail page is not present either. Thus, even under IPXL’s strained claim construction in
which IPXL tries to make the ability to select from a plurality of shipping addresses relevant,
there is no ability to choose from such shipping addresses in ordering from among similar items
lists such as the ones shown in Dr. Felten’s Report. To the extent that gift wrap constitutes a
parameter, it is a parameter of the order and not of a financial transaction. Moreover, clicking
the "Add gilt,wrap/note" box does not actually select the gift wrap parameter associated with the
order. Instead, once a use.r clicks the "Add gift-wrap/note" box, the user is directed to a new
page. It is on this new page that the user is able to enter a gift message and/or select gift wrap.
Thus, Amazon’s 1-Click® Feature cannot infringe Claim 2.

19

VI.

~ON’S 1-CLICK® FEATURE DOES NOT LITE~LY MEET THE
LIMITATIONS.OF CLAIM ~9 OF THE ’055 PATENT
Claim 9 is dependent on Claim 1. Accordingly, it is not in ~.~’nged since all of the

li .mi.tatjons of Claim 1 are not present. Amazon’s 1-Click® Feature meet Claim 9’s added
limitation "means for identifying a user prior to enabling-the user to execute a transaction."
A.

Amazon’s 1-Click® Feature Does Not Meet The Limitation "Means for
Identifying a User Prior to Enabliag the User to Execute a Transaction."

This element is not infringed under either Amazon’s or IPXL’s definitions because
Amazon’s 1-Click® Feature does not have means for identifying the user prior to enabling the
user to execute a transaction. Instead, Amazon merely infers who the customer placing the 1Click® order is by identifying the browser the customer is currently using, Amazon identifies
the browser by placing a unique browser ID in a cookie file on the user’s computer. Thereafter,
each time the browser visits .the Amazon site, it is identified to Amazon. The unique browser ID
can be associated with a plurality of unique customer IDs (because a number of people .may use
the same browser to order with Amazon). When a 1.Click® order is received, Amazon’s system
looks up the unique browser ID and infers that the customer placing the order is the one who
most recently logged on to the system. Amazon knows that this inference may be completely
wrong, but ac~cepts that so as to speed the ordering process and avoid sign-on pages for 1-Click®
ordering. See May 25, 2004 Deposition ofN. Peri Hartman at 1:10-191:6, attached as Ex. 22.
Not only does the Amazon system not have means for identifying a user prior to enabling
the user to place a 1,Click® order, but the structure that Amazon uses to identify the browser is a
cookie an.d neither it, nor its equivalent is disclosed in the ’055 patent. Because Amazon’s 1Click® Feature lacks, both. the means and the structure of this limitation, Amazon’s 1-Click®
Feature cannot infringe Claim. 9.

20

VII.

~ON’S 1-CLICK® FEATURE D.OES NOT LITERALLY MEET THE
LIMITATIONS OF CLAIM 15 OF THE ’055 P.ATENT.
Claim 15 is dependent on Claims 1 and 9. In addition to the above reasons why

Am. azon’s 1-Click® Feature-does not infringe claim 15 for the additional reason that it does not
predict transaction information the user will desire, as explained above in the discussion of
Claim 2.
VIII, ~AZON’S 1-CLICK® FEATURE DOES NOT LITERALLY MEET THE
LIMITATIONS OF CLAIM 25 OF THE ’055 PATENT,
Claim 25 is dependent on Claims 1 and 2. Because all of the limitations of claims 1 and
2 are not met, Claim 25 c,a!m, ot be infringed.
IX.

DUE TO THE MANNER IN WHICH 1-CLICK®. ORDERING OCCURS,
AMAZON CANNOT INFRINGE THE ’055 PATENT.
A.

Amazon Does Not Directly Infringe the ’055 Patent For Additional Reasons.

Infringement of a patent under 35 U.S.C. § 271(a) "cannot be interpreted to cover acts
other than an actual making, .using or selling of the patented invention." Lang v. Pacific Marine
and Supply Co., Ltd., 895 F.2d 761,765 (Fed. Cir. 1990). Where, as here, a party does not make,
use, offer to se!.l or sell a system comprising of each of the elements of an asserted claim, it
cannot be held liable aS a direct infringer, under §271(a). See Rotec Industries., Inc. v. Mitsubishi
Corp., 215 F.3d 1246, 1252 n. 2 (Fed. Cir. 2000) ("one may not be held liable under § 271(a) for
’making’ or ’selling’ less than a complete invention").
_Amazon does not make, use, offer to sell or sell any system that comprises all the
elements of Claim 1. First, Amazon does not install or set up the personal computers used by its
customers, or the memory, displays, or input devices associated with these computers. See Ex.
21, Pope Dec. ¶ 5. Rather, these components, are introduced into the accused system by
Amazon’s customers at various times. Amazon therefore does not "make" the entire accused

21

Sys_tem. Second, Amazon does not use or operate its customer’s computers, and in particular,
~azon:does not .interact with or use the input devices used by its customers in any way. See Ex.
21, Pope Dec. ¶ 6. For this reason, Amazon cannot be liable for "using" all of the claimed
elements of the accused system. Third, Amazon does not sell or offer to sell a system that
contains each of the required elements. Rather, Amazon only allows customers to order goods
t~ough its website See Ex. 21 Pope Dec. ¶9. Thus, summary judgment of no direct
infringement should be granted.
B.

Amazon .Cannot Be Liable For Indirect Infringement.

Liability for inducement requires proof "that defendant’s ’actions induced infringing acts
and that [they] knew or should have known [their] actions would induce actual infringement.’"
See e,g. Warner-Lambert Co. v. Apotex Corp., 316 F.3d 1348, 1363 (Fed. Cir. 2003); Manville
S~!es Corp. v. Paramount Sys., Inc., 917 F.2d 544, 553 (Fed. Cir. I990). The Federal Circuit has
specifica!ly held that "’knowledge of the acts alleged to constitute infringement’ is not enough,"
Warner, 316 F.3d at 1363, and rejected "a less stringent test for inducement liability, requiring
t!!at the officer .be aware only of his activities, not necessarily aware that his activities amomated
to infringement," Ferguson Bearegard/Logi¢ Controls v. Mega Sys., 350 F.3d 1327, 1342 ~ed.
Cir. 2003)10. This Court likewise requires "an inducer’s .actual intent to cause the acts which ’he

10

The holding in Hewlett-Packard v. Bausch & Lomb, 909 F.2d 1464, 1469 (Fed. Cir. 1990),
requiring "proof of actual .intent to cause the acts which constitute the infringement," does
not exclude the need for knowledge of actual infringement, and is consistent with the
Manville line of cases. Liability for inducement requires that a defendant both "knew or
should have known [their] actions would induce actual infringement," and had "intent to
cause the acts which constitute the infringement." See Warner, 3t6 F.3d at 1363. While
knowledge .of actual infringement is required, the higher level &intent is needed only for the
underlying acts resulting in infringement. See Moba, B.V.v. Diamond Automation, 325 F.3d
1306, 1318 (Fed. Cir. 2003) ("the only intent required of FPS is the intent to cause the acts
that constitute infringement"). This CO’tat also r~lui~6~ both elements -- "an inducer’s actual
intent to cause the acts which ’he knew or should have known would induce actual
infringements.’" Black & Decker, 953 F. Supp. at 138 (emphasis added).

22

k.new or should have known would induce actual infringements.’" Black & Decker lnc. v.
Catalina Lighting, 953 F.Supp. 134, 138, (E.D. Va. 1997).
Amazon did n0t.have knowledge of any alleged infringement prior-to March 2002, when
it first ~v~ made aware of the ’055 Patent. See Ex. 23, Amazon’s April 21 Interrogatory
Responses, at 2. Thus, Amazon cannot be held liable for inducing infringement before March
2002 See Manville, 917 F.2d at 553 (defendant cannot be liable for inducement before it knew
of the patent). After becoming aware of the ’055 Patent, Amazon obtained and relied upon the
opinion of its counsel that the ’055 Patent was invalid and not infringed. See Ex. 23, Amazon’s
April 21 Interrogatory Responses, at 1-2. See Manville, 917 F.2d at 553 (reliance upon opinion
of counsel r~egates knowledge of infringement). Moreover, IPXL has not alleged, or offered
evi~dence, that Amazon had knowledge of infringement. Thus, Amazon should be granted
s~ary jud~ent of no indirect infi-ingement.
X.

THE ASSERTED CLAIMS ARE INVALID.
Regardless of the c!a~m construction this Court adopts, no genuine issue Of material fact

exists that all of the asserted claims of the ’055 patent are invalid, and :this Court should therefore
grant summary judgment of invalidity.
A.

The. Prior Art l~atents
1.

The Coutts patent is. invalidating prior art.

The Coutts patent, "Self-service system having transaction predictive capability and
method of using," describes an ATM system that predicts ’~which service or.services provided by
the system the user is likely to request." See Ex. 18 at Abstract. Coutts discloses that the
pre0ictions are based upon "a stored record in the system, representing previous transactions by
that user," See Id. Coutts also discloses a "’special display for a particular user, the display being
designed to simplify the decisions and selections required to.be made by that .user" to reduce the

23

number of decisions and selections user must make to complete a transaction. See Id. at
a
AbStract; ! :21,33.
The Coutts patent is prior art mtder 35 U.S.C. §102 (a), (b) and (e). The Coutts patent
issued on Febru~y 14, 1995, prior to t earliest invention date of the invention claimed in the
’055 patent, June 26, 1996. There is no ~vidence of record that raises a genuine issue of material
fact that the invention claimed in Claim invented prior to the filing date of the ’055 patent
1 was
application3~ Therefore, Coutts is priorart under 35 U.S,C. § 1.02(a)because it issued before the
invention_ of the ’055 patent. Because ~utts issued more than one year before the June 26, 1996
C.
filing date of the ’055 patent, it is also prior art under § 102(b).~2 Courts is also prior art under
35 U.S.C. § 102(e) because the Coutts ap ~lication was filed prior to the invention date of¯the ’055
patent and issued to another.
2.

The Tarbox pate t ...............

prior art.

The Tarbox patent, ¯entitled, "Sy
;tem and method for processing a customized financial
tragsaction card" teaches ~ system and
.method for conducting financial transactions using a
financial card that stores pre-selected tra
~saction instructions and a transaction terminal, such as

11 The

0nl evide ce

’

.

’-"

"

Cru°~°~2~ra22~s ht~etec;tnl’~e°r~l~atSt:gphal ty Bc~aaik~’i~g2~nvF’e3ntdo~s3h~2p’ ml~2t ~etde~;~e~ °t°o°)de(se~:
his actions in an unjuSfifiabIy self-se: wing manner in order to obtain a patent or to maintain
an existing patent."). Accordingly, no reasonable jury could find an invention date earlier
than that of the ¯filing date of the ’055
~atent.
12

In fact, even if given .the benefit of priority date. of its parent application’s filing date
he
(April 13, 1995), Coutts would stilbe prior art under 102(a) because Courts was filed
approximately two months prior to thpriority date

24

an ATM, to run pre-selected and pre-st~red financial transactions (such as withdrawals and bill
Pa _y~....ents) when the financial card is.pla in the te.rminal. See Ex. 15 at Abstract; 1:11-29.
ed
The application that issued as:he ’055 patent was filed on June 26, 1996 and is a
coat_inuation-in-part application of an
pplicafion filed on April 13, 1995. Id. As discussed
above, IPXL cannot prove an invention earlier than that of the filing date of the ’055 patent,
late
June 23, 1996. Because the application
leading to the Tarbox patent was filed approximatel.y 19
months prior to the filins.d.ate .of the ’05
patent and issued as a patent, Tarbox is prior art under
35 U.S,C. §102(e).
3.

The Kelly patent invalidating ~prior art.

The Kelly patent entitled, "Toucl~
Panel Passenger Self-Ticketing System" issued on May
15, 1984. See Ex. 20. Kelly describ es a system for vending airline tickets to credit card
p~chasers based, upon stored reservatio~ data for each .purchaser. See Ex. 20 at Abstract. For
the 8~e ~easons discussed above, Kelly prior art to the ’055 patent under § 102(a), (b)and (e).
B9

The,Single Screen Limit~, .tion

Claim 1 contains the following
limitation, which the parties have referred to as the
"si_nglescreen" limitation:
Claim 1: ~’Single Screen" Lim!
tation: the processor causing the display to
display on a single screen stored transaction information; the input
mechanism enablinga user to use the displayed transaction information to
execute a financial transaction or to enter selections to specify .one or more
transaction parameters.
Under Amazon’s proposed con,,
.truction, the single screen limitation requires that a
system display stored user, d~fined trans~
ction information comprising a user-defined transaction
type and a plurality of user-defined
transaction parameters with additional user-defined
transaction parameters on a single screen
from which a user is given both options of executing a
transaction and specifYing para.,meters.

25

IPXL’s proposed construction requires that a system display on a single screen userdeft_ned transaction, information comprised of any stored information related to..a transaction that
was not preceded by any transaction entry screen(s) from-which a user may either execute a
tr_ansaction, specify parameter(s), or both. In other words, under IPXL’s proposed¯ construction,
the system of Claim 1 may allow a user to only execute a transaction or only specify parameters,
or both and still satisfy this limitation. IPXL’s construction reads out any system that contains
Screen preceding the single, screen irrespective of whether the preceding screen is. navigational,
i.e., al!ow’_mg a user to enter a selection that leads to a single screen that displays the claimed
stored transaction information.
Cg

The Prior Art Patents Each Contain the Single Screen Limitation of Claim 1.

Under either Amazon’s or IPXL’s proposed constructions, Courts and Tarbox each
c0.n.tain the single screen limitation of ClaimUnder/PXL’s proposed¯ construction, Kelly
1.
contains the single screen limitation.
1.

Courts Teaches the "Single Screen" Limitation Under Either
Amazon’s or IPXL’s Prop0~ed: Constructions.

Courts teaches the.display of user-defined transaction information on a single screen that
e~b!es a. user to execute the transaction or enter selections to specify parameters as required
under Amazon’s construction, which necessarily satisfies IPXL’s broader construction. See Ex.
24, Expert-Report of Hemy Lichstein at 28-29. Coutts discloses that a user initiates a transaction
by i.nserting an identification .ard into a card reader of the ATM. Ex. !8 at Abstract; 3:62,65.
Upon insertion, of the cai’d, an-.authorization process is started andthe user is prompted to enter a
user specific PIN. ld. at 3;65-68. The Coutts system begins the prediction.process at that time.
Id. at 4:1~6; Fig, 3. After the system makes a prediction, "the predictive system 38 determines
what is the most appropriate, menu. interface for the user and causes this menu to be displayed on

26

the display screen 18." ld. at 4:15-18; Fig. 3. After the authorization proces‘s is complete (after
the user enters her PIN)~, an interactive process 50 commences which allows users to interact
¯ with¯ the display through input means 16. Id. at 4:44-49; Fig. 3. A user may then execute a
tran_saction predicted by the system from the same screen: "If this particular service is already
one of the options displayed on the screen 18 at the commencement of the interaction process 50,
the user simply actuates one or more of the keys of the input means 16,-as indicated on the screen
¯ 18." Id. at 4:49,53. Courts further discloses that the simplified menu screen that is displayed to
a user on the display 18 following the initiation of a transaction (i.e,, inserting a identification
card) and prediction process could, for example, "consist[] of only four questions, such as: ’Do
you require $20?’, ’Do you require $30?’, ’Do you require a mini-statement?’, ’Do you require
some other transaction?’" Id. at 3:40-50.
There is no genuine dispute that Coutts meets the single .screen limitation as defined by
either Amazon or IPXL. The sum total of ]:PXL’s position regarding Courts is an expert opinion
Contained in six paragraphs, spanning two pages. See Ex. 25, Expert Rebuttal Report of Edward
W, Felten at 16,17, ¶¶58.63. Although Dr. Felten does not contest that Coutts’ the screen
displaying the "simplified menu" identified by Amazon’s expert displays the required, transaction
information on a single screen, he nevertheless states that the "simplified menu" displayed by the
Courts system cannot be the single screen of Claim 1 because the screen is displayed ’~only after
the user has initiated a transaction." See ld. at ¶ 62. Dr. Felten concludes that there is a
~_.~.~s.action entry screen~ associated with initiating,a transaction. See Ex. 26, J: ,une 17, 2004 Felten
Tr. at 487;7,491:20. Dr. Fe!ten’s conclusion is incorrect and unsupported by ~the Courts patent.
Coutts p!ainly tea.ches "a transaction is initiated by a user inserting his identification.card
(block 40) into the slot (not shown), fo~iiag part of the~d reader 20 of the ATM 10 being used

27

by the user. Ex. 18 at 3:62-65; Abstract. Courts does require a user to enter any transaction
information on screens that appear before the simplified menu screen in order to initiate a
tr~an~acfio.n. Contrary to Dr. Felten’s assertion, there is no screen associated with a user initiating
a ~ansaction. requires entry of transaction information, and Dr. Felten’s erroneous statement
a._~nnot create a genuine issue of fact.
Dr. Felten’s statement that the simplified menu screen of Coutts is "at most [] the last
sc.reen in a series of multiple screens through which the user is led (on a ’lead,through displayr)
~ order to i.nitiate a transaction" is also wrong. Ex. 25, Felten Rebuttal at ¶ 62. Dr. Felten does
not, because he cannot, provide any citations to the Coutts patents that supports his mistaken
perc~eption. In fact, the Coutts patent states otherwise: transactions may be initiated by merely
inse~ing _an identificati0ncard. Ex. 18 at 3:62,65. Unsupported assertions :that Coutts does not
conto~ the single screen limitation of Claim 1 cannot create a genuine issue of material fact. See
Aria Group, 853 F.2d at !560,
Moreover, under either parties’ construction, the system, of Courts clearly allows users, to
not only execute a fin.ancial transaction displayed on the simplified menu single screen (which
Dr. Felten does not dispute), it also allows users to specify parameters from that same screen.~,3
’That is, after the system predicts a transaction that a user is likely to desire such as a cash.
withdrawal, the system also predicts, "in order of probability, the. most likely amounts expected
to be requested." See Ex, 18 at 4:24-27. Therefore, when a user .is presented with a single screen
displaying a specialized menu with the predicted transaction type (e.g., withdrawal), the user is
also presented with seTera! .different ~amounts that have been predicted (e.g,, $20, $30). A user

Even if Coutts did _not allow users to specify p~ameters from the s~e screen but onl-y to
execute .transactions, ~t still satisfies the single screen limi.tation; ~XL’s consmactions do not
require the ability to do bo~h.

28

.may then_ use the input mechanism to select and execute a specific transaction, by selecting "Do
you require $20?" (that is,. withdrawal type of transaction for $20), or use the input mechanism to
8pe.cify ~ different amount by selecting "Do you require $30?" (that is., a wi~thdrawal~ type of
transaction in the amount of $30 instead for $20). Therefore, a user is given the option of
specifying a parameter ($30 rather than $20) for a particular transaction (withdrawal) and also
e;~ec.u}ing a transaction from one screen. Ex. 24, Lichstein Report at 28,29. Dr. Felten’s focus
on the "Do you require some other transaction" option and the additional screens required to
effectuate that transaction, Ex. 26, Felten Tr. at 479:24-481:24, is irrelevant as the limitations are
met without resort, to that., feature.14 Thus, under either parties’ constructions,-Coutts satisfies the
sin$|e ~screen limitation.
2.

Tarbox Teaches the "Single Screen" Limitation Under Either
Amazon’s or IPXL’s Proposed Constructions~

Tarb0x teaches, an ATM system that enable~ users to pre-defir~e ~d pro,select- financial
transactio_ns such as cash withdrawals and bill .payments and store them on a personal financial
card for .future use. See Ex..15 at Abstract; 3:7-t8. Tarbox teaches that a user .inserts-the
financial cud of the invention into an ATM, the system reads .the instructions, stored on the card,
determines what (pro-selected) transactions are available to the user and displays only those
transaction optionsto the user. See Ex. 15 at Abstract; 2:56,63. The user maythen select one of
the finan¢ia! transaction options displayed to execute the selected transaction. See Id. at
Abstrac_t; 3:25.30. The system disclosed in Tarb0x satisfies the single, screen limitation u!~..der
either parties’ construction.
14 Just as in an infi’ingement analysis where an accused system containing air the claimed
!i.~itations cannot escape inf~ngement_ by adding .extra limitations~ a prior art reference that
contai~ns each and every-required limi_’tation of a claim cannot be discarded because it
contains additional fea.t;ures. See Beckson Marine, Inc. v. NFM, Inc., 292 F.3d 718-(Fed. Cir.
2002) ("’that which will [literally] infringe, if later, will.anticipate, if earlier’"). ~

29

Dr. Felten opines that Tarbox does not meet the single screen limitation for two reasons:
1) a user cannot specify a transaction parameter on the single screen depicted in Fig. 5 of the
Tarbox patent; and 2) the screen depicted in Fig. 5 is "merely the last in [] sequence" of multiple
screens necessary to execute a transaction. See Ex. 25, Felten Rebuttal at ¶¶ 64-70. As detailed
below, Dr, Felten’s opinion that Tarbox does not meet the single screen limitation is based on a
misconception of Tarbox and can not raise a genuine dispute of material fact.
Fig. 5 of Tarbox clearly discloses the single screen claimed in Claim 1 of the ’055 patent.
See Ex. 24, Lichstein Report at 24-25. There is no dispute that the single screen disclosed in
Tarbox Fig. 5 contains the transaction information required by Claim 1 under either parties’
constructions. Ex. 25, Felten Rebuttal at ¶ 64-70; Ex. 26, Felten Tr. at 499:23-500:10; Ex. 24,
Lichstein Report at 24-25.
First, Tarbox unmistakably discloses that Fig. 5 is the single screen claimed by the ’055
patent and does not require preceding screens that require transaction entry by a user. Tarbox
teaches that the transactions displayed to the user on Fig. 5 are the result of reading the
instructions stored on the card and not by any user transaction entry:
¯ when a card is inserted into the terminal, the "instructions from the card are read by the
terminal which indicate the options available to the user. These options are displayed to
the user who selects one of the financial transactions to be performed." Ex. 15 at 6:1-4
(emphasis added).
¯

"the terminal--after determining from the instruction on the card what functions, i.e.,
financial transactions, are available to the card user--displays those options." Ex. 15 at
Abstract (emphasis added).
Second, Fig. 5 is described as "a customized display screen 503 using the present

invention" which "shows the text blocks identifying the available functions that are personalized
to the card user." This screen also contains a "welcome message" 501 supporting the fact that
Fig. 5 is in reality the first screen displayed to the user. See Ex. 15 at 6:17-18; Fig. 5.

30

Third, Figures 6A-6D further demonstrate that the screen depicted in Fig. 5 is the first
and only screen necessary to execute a user’s pre-selected transaction. Fig. 6A depicts the
instructions and flow of those instructions that is the core program of Tarbox. Id. at 8:14-20.
The instructions depicted in Fig. 6A enables the system to "retrieve customer related data store in
card 400, display the available optional transaction functions to the customer, accept the
customer’s selection of a desired function, and finally execute the proper subroutine containing
further instructions corresponding to the customer’s selection." See Id. at 8:8:14-20. Stepping
through the instructions, it is clear that the custom screen that displays only those transaction
options available to a specific user (that is exemplified in Fig. 5) satisfies the single screen
limitation as defined by both parties.
Instruction 601 retrieves information off a user’s identification card. Id. at 8:20-24.
Instruction 603 specifies that a screen with a predefined message welcoming the customer along
with "his transaction options," including the titles of the functions that are available to the user is
displayed. Id. at 8:25-34. Once the screen with personalized transaction options, exemplified by
Fig. 5, is displayed to the user, instruction 605 enables users to select a transaction by using a
input mechanism, in this case, function keys. Id. at 8:42-44. Only one screen containing a
user’s available transaction options is displayed; there is no support for the proposition that
multiple transaction entry screens precede this screen.
Tarbox also discloses customized "Quick Cash" and "Pay Mortgage Bill" as specific
transactions that can be defined and stored in a user’s identification card. Fig. 6B depicts the
sub-routine instructions for a customized "Quick Cash" transaction. Id. at 8:56-9:15. Fig. 6C
depicts the sub-routine instructions for a bill payment function, in this case, "Pay Mortgage Bill"
function. Id. at 9:16-35. Neither-Fig. 6B or 6C indicate that a separate, additional screen is

31

displayed or necessary to execute financial transactions. Instruction 605 indicates that when a
user selects an transaction option displayed on the first customized screen, instruction 607 "then
executes the interpreted instructions .... example, if the customer pressed the top button ...
For
the subroutine corresponding to that function would be executed." Id. at 8:42-50. None of the
instructions of 6B and 6C involve presenting a new display screen. Importantly, and in contrast
with the "Quick Cash" and "Pay Mortgage Bill" subroutines, the instructions depicted in Fig. 6D
for the subroutine "Withdraw Other Amount," instructs that an additional display screen be
presented to the user. ld. at Fig. 6D; 9:40-43. Moreover, Fig. 6A clearly indicates when a screen
is displayed. Id. at Fig. 6A. Tarbox clearly indicates when a screen is displayed. There are no
such indications that separate additional screens are displayed before the customized menu
screen (e.g., Fig. 5). Therefore, Dr. Felten’s opinion that the customized screen exemplified in
Fig. 5 is not a single screen because it is "merely the last in a sequence" is erroneous and cannot
raise a genuine issue of material fact.
With regard to Dr. Felten’s only other basis for his opinion that Tarbox does not meet the
single screen limitation, it should be noted that Dr. Felten does not dispute that a financial
transaction such as a customized Quick Cash or Pay Mortgage transaction can be executed from
a single screen. See Ex. 25, Felten Rebuttal at ¶¶ 64-70; Ex. 26, Felten Tr. at 499:23-500:10.
And indeed, he cannot.15 Id. at 8:47-51. He does opine, however, that a user could not enter
selections to specify a parameter without resort to multiple screens. Ex. 25, Felten Rebuttal at
¶ 68. Dr. Felten is again mistaken. Tarbox teaches that a user may pre-select and pre-store a
variety of financial transactions on a financial card for future use. See Ex. 15 at Abstract; 8:52-

15

As discussed above, because IPXL’s construction does not require that a system enable both
execution and specification of a parameter, Tarbox satisfies the single screen limitation as
construed by IPXL.

32

55; Fig. 6F; 10:19-2

Tarbox therefore allows users to pre-seleet multiple types of transactions

such as multiple "~ick Cash" transactions that only vary in dollar amounts. For example,
"Quick Cash $20," ",Quick Cash $40" and "Quick Cash $60" (as is offered in many ATMs) can
be pre,defined and displayed as available transaction options on a customized screen (following
~
the same program del~icted in Figs. 6A and 6B). From this single screen, a user can specify an
amount (a parameter1 from that one screen. Therefore, Tarbox describes a system that can
enable users to bot~ execute and specify parameters from a single screen. Dr. Felten’s
unsupported statements to the contrary cannot properly preclude summary judgrnent.
3.

IKelly Teaches the "Single Screen" Limitation Under IPXL’s Proposed
Constructions.

Kelly teaches :he single screen limitation under IPXL’s proposed construction. Kelly
describes a system th~ uses interactive kiosks to allow users to buy airline tickets using credit
card information and ,’eservation data previously stored in the system. See Ex. 20 at Abstract;
2:45-52. A user inserts her credit card into the credit card reader of a kiosk of the system
described by Kelly. Id. at Fig. 4 (Ready Display). Once the system reads the credit card
information, the kiosk displays a screen that asks for a user’s reservation number. Id. at Fig. 4
(top screen). If a user inputs a reservation number, the system recalls the reservation and "will
ask for confirmation by the passenger as indicated on the screen 64 in Fig. 5." Id. at 104:53-56.
From that single screen 64, a user may execute the transaction by selecting "YES" to confirm the
reservation; by confirming the reservation, the user instructs the system that her credit card
should be charged for the transaction. Id. at 104:63-105:1. If a user does not know her
reservation number, the user is led through multiple screens asking for data at each screen, as
depicted by the series of screens on the right hand side of Figs. 4 and 5. As clearly depicted in
Figs. 4 and 5, however, these screens are not necessary or used when a user enters her

33

reservation numbera!d the confirmation single screen is immediately displayed. Fig. 4-5
Id. at
("Call up Itinerary fr~ m R"; screen 64).
Dr. Felten’s c~inion that Kelly does not meet the single screen limitation is based on the
multiple screens depi
:ted in Figs. 4-6. Ex. 25, Felten Rebuttal at ¶ 107. Dr. Felten, however,
completely ignores tl: fact that single screen 64 is presented immediately after the user enters
e
her reservation numb~ and without entering transaction data on any other preceding screens. See
r
Ex. 20 at Figs. 4-5. Dr. Felten instead focuses his attention solely on the screens that are
displayed by the syste if the user does not enter her reservation number and the screen after the
aa
transaction is completid (Fig. 6). See Id. This does nothing to rebut’ the fact that Kelly discloses
a system in which uler-defined transaction information is displayed on a single screen from
which a user can execute the transaction.
Because IPXLis proposed construction of this limitation only requires that a system
enable a user to use th+ input mechanism to execute the displayed financial transaction, or to use
the input mechanism t enter selections to specify one or more transaction parameters, or both,
Kelly meets this limita ion because it allows a user to execute a transaction from a single screen
that displays user-defin ed transaction information.
D.

There i~ No Genuine Issue of Fact Regarding The Remaining Limitations of
Claim11.

IPXL cannot raise any genuine issue of material fact that the prior art references do not
contain all of the remaxning elements of Claim 1, under either Amazon’s or ~XL’s construction,
or both. The Federal Rules of Civil Procedure’s Rule 26 mandate that all opinions and
underlying basis that at
expert expects to testify to must be disclosed in an expert report. Fed. R.
Civ. P. 26(a)(2)(B). D1 Felten did not include any basis for his opinion that the prior art patents
did not anticipate Claim other than his opinion that each of the prior art patents did not disclose
1

34

the single screen limit
tion. Ex. 25, Felten Report at 7-32. Despite attempting to retroactively
inject opinions that D1Felten did not include into his report related to heretofore unchallenged
limitations, Dr. Felten finally forced to admit (after being compelled by the Duty Magistrate
was
Judge) that he has no ~pinions other than those described in his report. See Ex. 26, Felten Tr.
491:4.495:11; 499:23-500:4; 516:21-517:1.
Accordingly, a~ td as detailed in Amazon’s pending Motion to Limit IPXL’s Infringement
and Validity Position, Dr. Felten should be precluded from offering any testimony or opinions
other than those expregsed in his expert report. Because IPXL has not disclosed an invalidity
position with regard to Coutts, Tarbox, and Kelly for the remaining limitations of Claim 1, IPXL
is unable to now rais~ a genuine issue of material fact with regard to anticipation by those
references in responselto this motion for summary judgment. As such, IPXL cannot proffer
anything other than mere assertions of a factual dispute16 that are unsupported by evidence or

/

attorney argument, whilch cannot defeat a motion for summary judgment.
E.

Coutts IEontains The Additional Limitations of Claim 2.

Claim 2 of the 055 patent depends on Claim 1, and additionally requires that the system
of Claim 1 predict tran action information based upon stored data for that user. Coutts teaches a
system and method fo predicting transaction information based on stored data for that user
under both Amazon’s a ld IPXL’s constructions. IPXL’s expert Dr. Felten’s report contains no
opinion as to Coutts rtlated to Claim 2. Moreover, Dr. Felten admits that he has no opinion
/
regarding the non-anticipation of Claim 2 by Courts other than his opinion that the single screen
limitation of Claim 1 is aaot met. See Ex. 26, Felten Tr. at 518:1-16. As discussed above, there is
16

To the extent IPX], attempts to elicit this information from a lay witness, it would be
impermissible undel
Fed. R. Evid. 70! which preclude the use of lay witnesses to "backdoor"
opinion testimony tt is based on scientific, technical or other specialized knowledge within
at
the scope of Fed. R. Evid. 702.

35

no genuine issue of (act that the Coutts reference discloses the single screen limitation under
both Amazon’s and IP~L’s proposed constructions by clear and convincing evidence.
F.

The Additional Limitations of Claim 9 are Contained in Each of the Prior
Art Patents.

Claim 9 depends on Claim 1 and additionally requires a means for identifying a user prior
to allowing the user to execute a transaction. Each of the prior art patents disclose the means for
identifying a user befo "e allowing that user to execute transactions. See Ex. 24, Lichstein Report
at 25, 29; Ex. 27, Mat.ro Supp. Report at 22-23. IPXL cannot point to any evidence sufficient
to raise a genuine issde of fact regarding this limitation. Dr. Felten’s report is silent as to the
whether the prior art p~tents disclose the additional limitations of Claim 9, and he admits that he
/

has no opinions other than those disclosed in his report. See Ex. 26, Felten Tr. 538:13-20.
G.

Coutts ~ontains The Additional Limitations of Claim 15.

Claim 15 depends from Claim 9, which is dependent on Claim 1. Claim 15 requires that
the system of Claim 1 land 9 also predict transaction information for a user based upon stored
data for that user. As discussed above, Dr. Felten does not contest the fact that Coutts teaches a
system and method fo~ predicting transaction information based on stored data for that user
under both Amazon’s alnd ~XL’s constructions or that Coutts teaches the identification of a user
|

before allowing that usir to execute transactions. See Ex. 26, Felten Tr. at .538:10-20.
It., Coutts ~ontains The Additional Limitations of Claim 25.
Claim 25 depends from Claim 2, which in tum depends on Claim 1. Claim 25 requires
that the system of Clai~ 1 and 2 predict transaction information and that a user uses the input
!

means to change the ~predicted transaction information or accept the displayed transaction
information. As discu; above, Dr. Felten does not contest the fact that Coutts teaches a
sed
system and method folpredicting transaction information based on stored data for that user

36

under both Amazonk,and IPXL’s constructions or that Coutts teaches allowing a user to change
or accept the isplayed predicted transaction information.
d
¯
I.

Claim ~5 of the ’055 Patent is Also Invalid under 35 U.S.C. § 112, ¶ 2 and
§ 101 als a Matter of Law.

Claim 25 of ’ e ’055 patent impermissibly includes two distinct statutory classesma
product and a process--in a single claim. This renders Claim 25 invalid for two reasons: 1)
Claim 25 is indefinite under 35 U.S.C. §112 ¶ 2 because it is ambiguous with regard to whether a
product or process is 1:~ing claimed, and 2) Claim 25 fails to satisfy the requirement of 35 U.S.C.
§ 101 that only a single
distinct statutory class be claimed.
Determination9f claim invalidity for indefiniteness is "a legal conclusion that is drawn
from the court’s performance of its duty as the construer of claims." Exxon Research and Eng’g
Co. v. United States, 265 F.3d 1371, 1376 (Fed. Cir. 2001) ("indefiniteness is a question of
law"). Consequently, ellaim indefiniteness is appropriate for disposition on a summary judgment
motion. See id.
1.

Claim 25 is Indefinite Under 35 U.S.C. §112 ¶ 2.
/
Section 112 ¶ 2 t"requires a claim to particularly point out and distinctly claim the subject
!

matter" of the inventiol~. See Ex parte Lyell, No. 89-0461, 1990 WL 354583, at *5 (Bd. Pat.
App. & Inter. Apr. 9, 1990) However, "combining two separate statutory classes of invention in
a single claim ... is not lufficiently precise to provide competitors with an accurate determination ¯
of the ’metes and bounds’ of protection involved." See ld. at *3. Accordingly, an invention
and
"which purports to be tboth an apparatus and a process in a single claim, is ambiguous
/
properly rejected" as indl efinite. See Id. at *6.

Here, Claim 25 includes both a system and a method of using the system. First, it claims
"It]he system of Clair 2 wherein the predicted transaction information comprises both a

37

transaction type and t~
ansaction parameters associated with that transaction type ..." This refers
to the structure of a system used in connection with an electronic fund transfer system.
However, the second ,art of the claim: "... and the user uses the input means to either change.
the predicted transaclon information or accept the displayed transaction type and transaction
parameters" (emphasi added) claims a method for using the structure described in the first part
of the claim. This is same defect that rendered the claim at issue invalid in Ex Parte
the
Harmanoglu, No. 200~2-21 36, 2004 WL 77344, at *3 (Bd. Pat. App. & Int. 2004). See Id.
(finding a claim indefinite because of an ambiguity whether it "is directed to the article of
manufacture recited in first paragraph of the claim or to the process of using such article of
the
manufacture recited in second paragraph of the claim").
the
2.

Claim 25 is Also Invalid Under 35 U.S.C. §101.

This same flawlrenders Claim 25 invalid under § 101. "[I]nventions may be patentable
only if they fall within lone of the statutory classes of subject matter specified in 35 U.S.C. §101.
See Ex parte Lyell, 19!0 WL 354583, at *4. Accordingly, claims "cannot be both method and
apparatus," and "[i]t m.~st be clear from its wording that it is drawn to one or the other of these
mutually exclusive statutory classes of invention." See Id.; see also Ex parte Forsyth, 151
U.S.P.Q. 55, 56 (Bd. PI .t. App. & Int. 1966) (a claim cannot be both method and apparatus," but
rather, "must be clear .y its wording that it is drawn to one or the other of these two mutually
exclusive statutory clas§es of invention").
As discussed e~lier, Claim 25 is directed to both a system and a method for using the
/

system. Therefore, Cl~iim 25 is invalid under 35 U.S.C. §101. See Ex parte Lyell, 1990 WL
354583, at 4-5.

38

CONCLUSION
For the reasons stated above, Amazon respectfully requests that the Court grant
summary judgment in favor of Amazon that its 1-Click® Feature does not infringe claims 1, 2, 9,
15, and 25 of the ’055 ~patent, and that Claims 1, 2, 9, 15, and 25 of the ’055 patent are invalid,

Date: June 23, 2004

Respectfully submitted,

David A. Kessler, Esq. (VSB #42315)
GREENBERG TRAURIG, LLP
1750 Tysons Boulevard
Suite 1200
McLean, VA 22102
Tel: [phone]
David A. Zapolsky, Esq.
Vice President & Associate General Counsel
AMAZON.COM, INC.
P.O. Box 81226
Seattle, WA 98108-1226
Tel: [phone]
David K. Callahan, P.C., Esq.
Thomas Pastemak, Esq.
KIRKLAND & ELLIS LLP
200 East Randolph Drive
Chicago, Illinois 60601
Tel: [phone]
Attorneys for Amazon.corn, Inc.

39

CERTIFICATE OF SERVICE
I hereby certify
that a copy of the foregoing Defendant Amazon.com, Inc.’s
Memorandum in Supp~ of Defendant Amazon.com, Inc.’s Motion for Summary Judgment of
irt
Non-Infringement and Invalidity, and supporting declarations and exhibits, were delivered this
23rd day of June 2004, is follows:
BY FACSIMILE AND HAND DELIVERY
eith R. Styles, Esq.
t~obins, Kaplan, Miller & Ciresi, LLP
Suite 1200
801 K Street, NW
’~¢ashington, DC 20006
Tel: [phone]
Counsel for Plaintiff lPXL Holdings, LLC
BY FACSIMILE AND FEDEX
]~mily M. Rome, Esq.
Robins, Kaplan, Miller & Ciresi, LLP
2800 LaSalle Plaza
8~0 LaSalle Avenue
1V~inneapolis, Minnesota 55402-2015
q~el: [phone]
~lounsel for Plaintiff IPXL Holdings, LLC
D avid"A Kessler/~*~

4O