MAXIM INTEGRATED PRODUCTS, INC., PATENT LITIGATION
Filing
742
MEMORANDUM OPINION re: 691 REPORT AND RECOMMENDATIONS of Special Master re: Claim Construction. Signed by Chief Judge Joy Flowers Conti on 12/17/2013. (ten)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
IN RE: MAXIM INTEGRATED
PRODUCTS, INC. MDL No. 2354
This Document Relates to: All Actions
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Master Docket: Misc. No. 12-244
MDL No. 2354
Chief Judge Joy Flowers Conti
MEMORANDUM OPINION
CONTI, Chief District Judge
These are patent infringement cases, centralized in this court for coordinated and
consolidated pretrial proceedings by order of the Panel on Multidistrict Litigation. (ECF No. 1.)
Approximately twenty-five separate cases are currently proceeding at the miscellaneous number
assigned to this MDL, 12-mc-244, to which all citations to the record refer. Prior to creation of
the instant MDL, Maxim Integrated Products, Inc. (“Maxim”) sued ten companies in the United
States District Court for the Eastern District of Texas alleging patent infringement, and four
companies brought declaratory judgment actions against Maxim in federal district courts in
Colorado, Kansas and Pennsylvania seeking declarations of non-infringement and invalidity of
the same patents. (Id.) All of these, and the later-joined, cases involve five related patents owned
by Maxim directed to electronically performing secure transactions. Maxim alleges that various
smartphone software applications, or “Apps,” infringe its patents. The companies accused of
infringement, including those that initiated litigation by bringing declaratory judgment actions,
are collectively referred to by this court as the Opposing Parties (“OPs”).
Maxim specifically asserts that the OPs infringe five of its patents: United States
Patent Nos. 5,805,702 (the “‘702 Patent”, ECF No. 610 at JX-1), 5,940,510 (the “‘510 Patent”,
ECF No. 610 at JX-3), 5,949,880 (the “‘880 Patent”, ECF No. 610 at JX-5), 6,105,013 (the “‘013
Patent”, ECF No. 610 at JX-7), and 6,237,095 (the “‘095 Patent”, ECF No. 610 at JX-9). These
patents are all related. (ECF No. 691 at 2.) The ‘880 Patent issued from a divisional application
of the ‘510 Patent. (Id.) The ‘702 Patent, ‘013 Patent and ‘095 Patent date back to a common
provisional application and share a substantially similar specification. (Id.) The ‘013 Patent and
‘095 Patent incorporate by reference the ‘510 Patent. The ‘510 Patent and ‘880 Patent
incorporate by reference the ‘702 Patent. (Id.)
The parties submitted a joint disputed claim terms chart originally identifying
forty-three terms requiring construction by the court, (ECF No. 580), but later indicated that
eight of the forty-three disputes had been resolved following claim construction briefing (ECF
No. 677-1). Maxim filed an opening claim construction brief (ECF No. 634), to which the OPs
filed a consolidated response (ECF No. 642). Maxim thereafter filed a reply brief. (ECF No.
651.) A subset of the OPs, referred to as the Joining Parties (“JPs”), filed a separate claim
construction brief with respect to a single disputed claim term, i.e., “certificate,” (ECF No. 680),
to which Maxim responded (ECF No. 686). A hearing was held before the Special Master and
the court on September 12, 2013 (the “September Hearing”). (ECF No. 709 (Transcript).)
Following the September Hearing, Maxim filed a supplemental brief with respect to a single
disputed claim term, i.e., “packet.” (ECF No. 687.)
On October 9, 2013, the Special Master filed a Report and Recommendation
(“R&R”) regarding claim construction, (ECF No. 691), which was later modified only as to the
disputed claim term “microcontroller core” to correct a typographical error in the R&R (ECF No.
693). The OPs (ECF No. 704), Maxim (ECF No. 705), and the JPs (ECF No. 713) filed
objections to the Special Master’s R&R and responses to those objections (ECF Nos. 715, 714
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and 718, respectively.) The court heard oral argument on the objections to the R&R on
November 13, 2013 (the “November Hearing”). (ECF No. 726 (Transcript).)
The court reviewed the initial claim construction briefing and the briefing on the
objections to the R&R and considered the arguments made and written materials submitted at the
September and November Hearings and is prepared to issue its order on claim construction. In
accordance with the court’s previous order on post-claim construction scheduling, (ECF No.
724), Maxim’s counsel is directed to file a version of that order listing dates certain for the
various deadlines. The court will thereafter set a date for the Daubert hearing and post-discovery
status conference.
I.
LEGAL STANDARDS
A. Generally Applicable Principles of Claim Construction
Claim construction is a matter of law. Markman v. Westview Instruments, Inc.,
52 F.3d 967, 979 (Fed. Cir. 1995). “It is a ‘bedrock principle’ of patent law that ‘the claims of a
patent define the invention to which the patentee is entitled the right to exclude.’” Phillips v.
AWH Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005) (en banc) (quoting Innova/Pure Water, Inc. v.
Safari Water Filtration Sys., Inc., 381 F.3d 1111, 1115 (Fed. Cir. 2004)). The words of a claim
“are generally given their ordinary and customary meaning,” which “is the meaning that the term
would have to a person of ordinary skill in the art in question at the time of the invention, i.e., as
of the effective filing date of the patent application.” Id. at 1312-13 (citing Vitronics Corp. v.
Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed Cir. 1996)); Innova/Pure Water, 381 F.3d at 1116.
In arriving at this meaning, a court is to look first and foremost to the “intrinsic evidence,” which
consists of the patent’s claim language, the specification and written description, and the
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prosecution history, to determine the meaning of disputed claim terms. Phillips, 415 F.3d at
1311-17; Medrad, Inc. v. MRI Devices Corp., 401 F.3d 1313, 1319 (Fed. Cir. 2005). The
specification is the single best guide to the meaning of a disputed term, and is
“usually…dispositive.” Phillips, 415 F.3d at 1315 (quoting Vitronics, 90 F.3d at 1582).
Claim language guides the court’s construction of claim terms. Phillips, 415 F.3d
at 1314.
Yet, the “claims cannot enlarge what is patented beyond what the inventor has
described as the invention.” Abbott Laboratories v. Sandoz, Inc., 566 F.3d 1282, 1288 (Fed. Cir.
2009) (citing Biogen, Inc. v. Berlex Labs., Inc., 318 F.3d 1132, 1140 (Fed. Cir. 2003)). The
context in which a term is used not only in the asserted claims, but also in any claims that are not
being asserted in a particular lawsuit, can be highly instructive because “terms are normally used
consistently throughout the patent.” Phillips, 415 F.3d at 1314. “The construction that stays true
to the claim language and most naturally aligns with the patent's description of the invention will
be, in the end, the correct construction.” Renishaw PLC v. Marposs Societa per Azioni, 158 F.3d
1243, 1250 (Fed. Cir. 1998).
Differences among claims, such as additional limitations in
dependent claims, can provide further guidance. The doctrine of claim differentiation provides
that the presence of a dependent claim that adds a particular limitation raises a rebuttable
presumption that the limitation in question is not found in the independent claim. Wenger Mfg.,
Inc. v. Coating Mach. Sys., Inc., 239 F.3d 1225, 1233 (Fed. Cir. 2001). Although the doctrine is
at its strongest “where the limitation sought to be ‘read into’ an independent claim already
appears in a dependent claim,” there is still a presumption that two independent claims have
different scope when different words or phrases are used in those claims. Seachange Int’l Inc., v.
C-COR, Inc., 413 F.3d 1361, 1368 (Fed. Cir. 2005) (citing cases). “However, the doctrine, ‘only
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creates a presumption that each claim in a patent has a different scope.’” Id. at 1369 (quoting
Kraft Foods, Inc. v. Int’l Trading Co., 203 F.3d 1362, 1368 (Fed. Cir. 2000)).
Claims are always to be read in view of the specification, of which they are a part.
Markman, 52 F.3d at 979. “The person of ordinary skill in the art is deemed to read the claim
term not only in the context of the particular claim in which the disputed term appears, but in the
context of the entire patent, including the specification.” Phillips, 415 F.3d at 1313. Moreover,
“where the ordinary and accustomed meaning of the words used in the claims lack sufficient
clarity to permit the scope of the claim to be ascertained from the words alone” the specification
can provide clarity. Teleflex. Inc. v. Ficosa N. Am. Corp., 299 F.3d 1313, 1325 (Fed. Cir. 2002).
In the specification, a patentee may define his own terms, give a claim term a different meaning
than it would otherwise possess, or disclaim or disavow some claim scope.
Id. at 1316.
Although a court generally presumes terms possess their ordinary meaning, this presumption can
be overcome by statements of clear disclaimer, SciMed Life Sys., Inc. v. Advanced
Cardiovascular Sys., Inc., 242 F.3d 1337, 1343-44 (Fed. Cir. 2001), or when the patentee acts as
his own lexicographer. Irdeto Access, Inc. v. EchoStar Satellite Corp., 383 F.3d 1295, 1301
(Fed. Cir. 2004).
“Although the specification may aid the court in interpreting the meaning of
disputed language in the claims, particular embodiments and examples appearing in the
specification will not generally be read into the claims.” Constant v. Advanced Micro-Devices,
Inc., 848 F.2d 1560, 1571 (Fed. Cir. 1988); see also Phillips, 415 F.3d at 1323. Nonetheless, “[a]
claim interpretation that excludes a preferred embodiment from the scope of the claim ‘is rarely,
if ever, correct.’” Globetrotter Software, Inc. v. Elam Computer Grp. Inc., 362 F.3d 1367, 1381
(Fed. Cir. 2004) (quoting Vitronics Corp., 90 F.3d at 1583). Even if a patent describes only a
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single embodiment, the claims of the patent must not be construed as being limited to that
embodiment unless the patentee has demonstrated a clear intention to limit the claim scope using
“words or expressions of manifest exclusion or restriction.” Phillips, 415 F.3d at 1323; LiebelFlarsheim Co. v. Medrad, Inc., 358 F.3d 898, 906 (Fed. Cir. 2004) (citing cases); Teleflex, 299
F.3d at 1327. The purpose of the specification is “to teach and enable those of skill in the art to
make and use the invention” and sometimes, the best way to do that is to provide an example.
Teleflex, 299 F.3d at 1327. Although the Court of Appeals for the Federal Circuit acknowledges
that “the distinction between using the specification to interpret the meaning of a claim and
importing limitations from the specification into the claim can be a difficult one to apply in
practice,” it instructs courts to maintain their focus on how a person of ordinary skill in the art
would understand the claim terms. Id.
The prosecution history is another tool that supplies the proper context for claim
construction. Home Diagnostics Inc. v. LifeScan, Inc., 381 F.3d 1352, 1356 (Fed. Cir. 2004).
Because the file history “represents an ongoing negotiation between the [United States Patent
and Trademark Office (“PTO”)] and the applicant, rather than the final product of that
negotiation, it often lacks the clarity of the specification and thus is less useful in claim
construction proceedings.” Phillips, 415 F.3d at 1317. Nevertheless, the prosecution history is
intrinsic evidence that is relevant to the determination of how the inventor understood the
invention and whether the inventor limited the invention during prosecution by narrowing the
scope of the claims. Id. Where an applicant limits claim scope during prosecution through a
“clear disavowal of claim coverage, such as an amendment to overcome a rejection,” the wellestablished doctrine of prosecution disclaimer “preclud[es] patentees from recapturing through
claim interpretation specific meanings disclaimed during prosecution.” Amgen Inc. v. Hoechst
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Marion Roussel, Inc., 314 F.3d 1313, 1327 (Fed. Cir. 2003) (citing York Prods., Inc. v. Central
Tractor Farm & Fam. Ctr., 99 F.3d 1568, 1575 (Fed. Cir. 1996)); Omega Eng’g Inc. v. Raytek
Corp., 334 F.3d 1314, 1323 (Fed. Cir. 2003). By distinguishing the claimed invention over the
prior art, an applicant is indicating what the claims do not cover. Spectrum Int’l v. Sterilite
Corp., 164 F.3d 1372, 1378-79 (Fed. Cir. 1988) (quotation omitted). In order for the doctrine to
apply, however, the prosecution history must show that the patentee clearly, unambiguously and
unmistakably disclaimed or disavowed the proposed interpretation during prosecution in order to
obtain claim allowance. Middleton Inc. v. 3M Co., 311 F.3d 1384, 1388 (Fed. Cir. 2002); Cordis
Corp. v. Medtronic AVE, Inc., 339 F.3d 1352, 1358 (Fed. Cir. 2003); Schindler Elevator Corp. v.
Otis Elevator Co., 593 F.3d 1275, 1285 (Fed. Cir. 2010).
Phillips rejected any claim construction approach that sacrificed the intrinsic
record in favor of extrinsic evidence, such as dictionary definitions or expert testimony.
Phillips, 415 F.3d at 1319-24.
Still, though “less significant than the intrinsic record in
determining the legally operative meaning of claim language,” a court may rely on extrinsic
evidence to “shed useful light on the relevant art.” Id. at 1317 (quotation omitted). Technical
dictionaries and treatises may help the court understand the underlying technology and the
manner in which one skilled in the art might use claim terms, but such sources may also provide
overly broad definitions or may not be indicative of how terms are used in the patent. Id. at
1318. Similarly, expert testimony may aid the court in determining the particular meaning of a
term in the pertinent field, but “conclusory, unsupported assertions by experts as to the definition
of a claim term are not useful.” Id. Generally, extrinsic evidence is “less reliable than the patent
and its prosecution history in determining how to read claim terms.” Id.
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B. Indefiniteness
Patent claims must particularly point out and distinctly claim the subject matter
regarded as the invention. 35 U.S.C. § 112, ¶ 2. Whether a claim meets this definiteness
requirement is a question of law. Amgen Inc. v. F. Hoffman–LA Roche Ltd., 580 F.3d 1340,
1371 (Fed. Cir. 2009); Young v. Lumenis, Inc., 492 F.3d 1336, 1344 (Fed. Cir. 2007). The
primary purpose of the definiteness requirement is to ensure that the claims are written in such a
way that they give notice to the public of the extent of the legal protection afforded by the patent
so that interested members of the public, e.g., competitors of the patent owner, can determine
whether or not they infringe. All Dental Prodx, LLC v. Advantage Dental Prods., Inc., 309 F.3d
774, 779–80 (Fed. Cir. 2002) (citing Warner–Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S.
17, 28–29 (1997)). In other words, “[a] patent holder should know what he owns, and the public
should know what he does not.” Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535
U.S. 722, 731 (2002).
An accused infringer must demonstrate by clear and convincing evidence that one
of ordinary skill in the relevant art could not discern the boundaries of the claim based upon the
claim language, the specification, the prosecution history, and the knowledge in the relevant art
in order to meet the “exacting standard” to prove indefiniteness. Halliburton Energy Servs., Inc.
v. M-I LLC, 514 F.3d 1244, 1249-50 (Fed. Cir. 2008).
“Only claims ‘not amenable to
construction’ or ‘insolubly ambiguous’ are indefinite.” Id. at 1250 (quoting Datamize, LLC v.
Plumtree Software, Inc., 417 F.3d 1342, 1347 (Fed. Cir. 2005)). Where “one skilled in the art
would understand the bounds of the claim when read in light of the specification” the claim is
sufficiently definite. Exxon Research & Eng'g Co. v. United States, 265 F.3d 1371, 1375 (Fed.
Cir. 2001). The ultimate issue is whether someone working in the relevant technical field could
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understand the bounds of a claim. Haemonetics Corp. v. Baxter Healthcare Corp., 607 F.3d 776,
783 (Fed. Cir. 2010). Where “the meaning of a claim is discernible, even though the task may be
formidable and the conclusion may be one over which reasonable persons will disagree,” the
claims are sufficiently clear to avoid invalidity on indefiniteness grounds. Exxon Research, 265
F.3d at 1375.
This approach “accord[s] respect to the statutory presumption of patent
validity….and…protect[s] the inventive contribution of patentees, even when the drafting of
their patents has been less than ideal.” 35 U.S.C. § 282; Datamize, 417 F.3d at 1347–48.
II.
CONSTRUCTION OF DISPUTED CLAIM TERMS
For ease of reference, the court addresses the disputed claim terms in the order
that they appear in the R&R, (ECF No. 691), and by reference to the number assigned to the
claim term by the Special Master. The court discusses each disputed claim term, or group of
closely related terms, in a separate section below. Each section begins with an individual claim
construction chart that lists, in the first column, the number assigned to the term by the Special
Master in the R&R. The second column of each chart recites the disputed claim term and makes
parenthetical reference, following the claim term, to the number at which that disputed claim
term appeared in the parties’ joint disputed claim terms chart. (ECF No. 677-1.) Each individual
claim construction chart next includes a column listing the patent number and claim number at
which the disputed claim term is found, followed by this court’s claim construction in the last
column.
The court uses bold typeface where its construction differs from, or adds to, the
Special Master’s recommended construction. In some instances, the court suggests, in footnotes,
curative jury instructions that may be required under certain circumstances. The court does so in
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order to recognize that this is an MDL proceeding, and that this court may not preside over the
jury trial in a particular case. By doing so, the court does not indicate that any party is
authorized purposefully to submit evidence or present argument that contradicts this court’s
claim construction. The court, however, includes these curative instructions out of an abundance
of caution and for the purpose of ensuring clarity when the cases centralized here are returned to
their home courts.
A. First Claim Construction Chart
R&R#
1(a)
1(a)
1(b)
1(b)
Term (Chart #)
“first data” (#12)
“first data” “second data” (#12)
“units of exchange” (#34)
“value datum” (#34)
1(c)
“first portable module” (#13)
Patent/Claim
‘510/1
‘095/1
‘880/1
‘880/1
‘510/1
Construction
no construction required
no construction required
no construction required
data that can be exchanged [as
payment] for goods and services,
the data representing a value for
money, credit or other items
no construction required
Very generally, the disputes concerning each of these terms center on whether the
patent claims are limited only to monetary transactions. The court agrees with the Special
Master’s fundamental conclusion that although the ‘880 Patent’s “value datum” term indicates a
monetary, or other credit, transaction, the other terms, and patents, are not so limited.
The OPs object to the Special Master’s conclusion that the terms “first data,”
“second data” and “first portable module” need not be construed, and are not limited to monetary
transactions. (ECF No. 704 at 3-7.) The OPs’ arguments that the ‘095 and ‘510 Patents must be
limited to transactions that involve cash, or cash equivalents, are not persuasive.
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The Special Master explained that the doctrine of claim differentiation, the
permissive language used in the claims and the rest of the specification, and the file history of the
‘095 Patent demonstrate that the claims of the ‘095 Patent are not limited to cash exchanges.
(ECF No. 691 at 13-14). The court agrees with this analysis and adopts it.
With respect to the ‘510 Patent, the court rejects the OPs’ argument that the
patentees redefined the term “data” to mean “monetary value” because the patent lacks a legally
sufficient clear statement of lexicography. Intellicall, Inc. v. Phonometrics. Inc., 952 F.2d 1384,
1388 (Fed. Cir. 1992); (ECF No. 691 at 14-15.) The OPs’ lexicographer argument is also
contradicted explicitly by the ‘510 Patent’s file history. During prosecution of the ‘510 Patent,
the PTO examiner identified two distinct inventions in the originally filed claims of the ‘510
Patent; one directed toward “a system for communicating data securely,” and one directed
toward “a method for electronically transferring units of exchange.” (ECF No. 610 at JX-4,
244MAX001038-43, 1071.) The “system for communicating data securely” invention became
the ‘510 Patent, while the “method for electronically transferring units of exchange” invention
became the ‘880 Patent. The court cannot conclude that the patentees defined “data” in the ‘510
Patent to mean “monetary value” in the context of this file history. Finally, under controlling
precedent, this court cannot limit the claims of the ‘510 Patent to a preferred embodiment, even
if there is only one, unless the patentee demonstrated a clear intention to limit the claim scope
using “words or expressions of manifest exclusion or restriction.” Teleflex, 299 F.3d at 1327.
Again, in the entire context of the ‘510 Patent, the court cannot conclude that the patentees
demonstrated such a clear intention to limit their claims. Based upon the ‘510 Patent’s
specification and file history, which claims the broader invention directed toward “a system for
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communicating data securely,” the court cannot conclude that the ‘510 Patent is limited to
monetary transactions. (ECF No. 691 at 13-14, 15.)
In addition, the incorporation by reference in the ‘510 Patent of the ‘702 Patent
supplies further support for the conclusion that the ‘510 Patent does not manifest an intent to
exclude non-monetary embodiments. (ECF No. 610 at JX-3, 1:7-16.)1 The ‘702 Patent includes
numerous embodiments that are unrelated to monetary transactions. (Id. at JX-1, 4:45-7:50,
13:51-16:19.) For the first time in their objections to the R&R, the OPs argue that the patentees’
statement of incorporation is ineffective and, that, even if it were proper, an incorporated patent
cannot be considered for purposes of construing the terms of the host patent. (ECF No. 704 at 6.)
The court disagrees. As an initial matter, the statement of incorporation in the ‘510 Patent meets
the standards and requirements set forth in the applicable regulations and PTO procedures. 37
C.F.R. § 1.57(c); Manual of Patent Examining & Procedure (MPEP), 6th ed. §§ 608.01(p),
2163.07(b) (Sep. 1995); Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1323 (Fed. Cir. 2012). It
follows that the ‘702 Patent “is as much a part of the [‘510 Patent] as if the text was repeated in
[the ‘510 Patent].” MPEP § 2163.07(b).
None of the decisions cited by the OPs, in either their briefing or in the materials
submitted at the November Hearing, indicate that this court is prohibited from considering the
‘702 Patent in construing the claims of the ‘510 Patent. Young Dental Mfg. Co. v. Q3 Special
Prods., 112 F.3d 1137, 1143 (Fed. Cir. 1997) (distinguishable at least because the court
addressed differing specifications in a parent and continuation-in-part patent); SanDisk Corp. v.
Kingston Tech. Co., 695 F.3d 1348, 1366 (Fed. Cir. 2012) (distinguishable at least because the
court addressed how the disclosure-dedication rule applied to incorporated subject matter);
1
Citations to patents are made in the format [column number]:[line number], unless otherwise
specified.
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Modine Mfg. Co. v. ITC, 75 F. 3d 1545, 1552 (Fed. Cir. 1996) (distinguishable at least because
the host patent explicitly replaced value assigned to the term in controversy in the incorporated
patent with a different value); Zenon Env’t, Inc. v. United States Filter Corp., 506 F.3d 1370,
1378-1379 (Fed. Cir. 2007) (distinguishable at least because the court addressed effect of
language of incorporation that was specific, instead of general); Helicos Biosciences Corp. v.
Illumina, Inc., 888 F.Supp. 2d 519, 533 (D. Del. 2012) (not controlling authority and
distinguishable at least because the court addressed effect of incorporated subject matter on
anticipation analysis); Biogen Idec, Inc. v. GlaxoSmithKline LLC, 713 F.3d 1090, 1097 (Fed.
Cir. 2013) (distinguishable at least because prosecution history disclaimer applied). The various
non-monetary embodiments described in the ‘702 Patent can be considered in construing the
terms of the ‘510 Patent and support the conclusion that the ‘510 Patent is not limited to
monetary transactions.
Once the OPs’ arguments in favor of limiting the claims of the ‘510 and ‘095
Patents to monetary exchange transactions are rejected, it follows that the terms “first data,”
“second data” and “first portable module” need no further construction. The jury will be wellequipped to understand each of these terms as they are used in the context of the asserted claims
of the patents.
The analysis with respect to the terms “value datum” and “units of exchange” in
the ‘880 Patent is different. To be clear at the outset, the OPs have not objected to the Special
Master’s construction of “value datum,” (ECF No. 704), and Maxim has done so only by way of
reference to its initial claim construction briefing, in which it contended that the term need not be
construed at all (ECF No. 634 at 57-59; ECF No. 705 at 8). Maxim does not object to the
Special Master’s failure to construe the term “units of exchange,” (ECF No. 705), and the OPs
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do so only by way of a chart incorporating their initial claim construction briefing. (ECF No.
704-1.)
With respect to the term “value datum” the original dispute between the parties
was whether the term must constitute legal tender itself, or merely represent a unit of exchange.
(ECF No. 691 at 16-19.) The Special Master concluded that “value datum” could be a
representation of money, or some other form of credit, but had to be exchangeable for goods or
services. (Id. at 21.) The parties are largely in agreement with the Special Master’s
recommended construction, and the court adopts it, in large part. The record indicates that the
“value datum” must be exchangeable, but need not necessarily be, or represent only, cash, as
opposed to some other form of credit. The court has removed the words “as payment” from the
Special Master’s recommended construction in order to avoid any possible unintended
implication that the term is limited to transactions in which cash is directly exchanged for goods
or services.
The Special Master concluded that the term “units of exchange” need not be
construed because it is found in the preamble and is non-limiting with respect to the subsequent
steps of the method claim. (Id. at 19-20.) The court reviewed the OPs’ original arguments about
the term “units of exchange,” but agrees with the Special Master’s conclusion that the term need
not be construed, for the reasons set forth in the R&R.
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B. Second Claim Construction Chart
R&R#
2
Term (Chart #)
Patent/Claim
“portable module reader that
can be placed in communication
‘510/1
with said first portable module”
(#21)
Construction
no construction required
The Special Master recommended that this term be construed to mean “a device
that can be placed in communication with the first portable module to read data from the portable
module.” (ECF No. 691 at 26-27.) The OPs object to the Special Master’s construction, which
rejects their argument that the phrase “placed in communication with” requires that two items
physically touch or at least be in close proximity to each other. (ECF No. 704 at 16-18.) The
court agrees with the Special Master’s conclusion that the ‘510 Patent does not require proximity
or physical touching of the “first portable module” and the “portable module reader.” The
specifications of the ‘510 Patent and the ‘702 Patent2 describe various ways that these two items
can communicate, which include use of a wireless communication system or a network. (ECF
No. 610 at JX-3, 2:45-58; JX-1, 11:42-59.) The phrase “placed in communication with” is
related to and derivative of those forms of communication, and the OPs failed to convince the
court otherwise.
Although “placed” can indicate physical contact between two items, e.g., “she
placed the glass on the table,” it need not only refer to physical contact; e.g., “the real estate
broker placed the buyers in contact with a reputable contractor.” Notably, the phrase used in the
patents is actually “placed in communication with.” Communication does not inherently require
physical contact or even proximity, and the patents acknowledge and disclose this precise
The court already determined that the ‘702 Patent is properly incorporated into the ‘510 Patent
and is relevant to its claim construction. See Section II.A, p. 11-13.
2
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concept by making reference to networks and wireless systems. The intrinsic record does not
limit the term to forms of communication that require physical contact or proximity.
The court considered the OPs’ prosecution history disclaimer argument, and finds
that the statements referenced do not rise to the level of clear and unmistakable disavowals.
(ECF No. 704 at 18-19.) In order for the doctrine to apply, the prosecution history must show
that the patentee clearly, unambiguously, and unmistakably disclaimed or disavowed the
proposed interpretation during prosecution in order to obtain claim allowance. Schindler
Elevator, 593 F.3d at 1285; Cordis, 339 F.3d at 1358; Middleton, 311 F.3d at 1388. The
November 8, 1998 amendment’s general reference to “locations that have a portable module
reader” and its replacement of “able to communicate with” with “placed in communication with”
do not reflect that the patentees limited their invention to physical proximity between the
portable module and the portable module reader in order to obtain allowance. (ECF No. 704 at
18-19.) The OPs failed to meet the requirements for applying prosecution history disclaimer.
Although the court agrees with the Special Master’s analysis, the court finds that a
jury would not require any special construction of this phrase in order to decide questions of
infringement or invalidity.3 The phrase will be readily understandable to a jury in the context of
the related claim language. The court’s differing approach to construction of this term from the
Special Master’s recommendation is noted in bold typeface, for ease of reference only, in the
above individual claim construction chart. The Special Master’s analysis is otherwise adopted
by the court.
3
If a party at trial argues contrary to this analysis, the jury should be instructed that the word
“placed” is not limited to any degree of proximity or to physical contact.
16
C. Third Claim Construction Chart
R&R#
3
Term (Chart #)
“microcontroller” (#16)
Patent/Claim
‘510/1
‘013/1&9
Construction
an integrated hardware circuit
including a processor, memory and
input/output
Maxim objects to the Special Master’s recommended construction, but only by
way of incorporation of its original claim construction briefing. (ECF No. 705 at 8.) Similarly,
the OPs object only by way of a chart attached as an appendix to their objection brief, which
likewise incorporates their original claim construction briefing. (ECF No. 704-2.) The original
disputes regarding construction of this term were whether the microcontroller of the ‘510 and
‘013 Patents must: (1) be on a single integrated circuit; and (2) be used for a single purpose or
application. The Special Master answered the first question in the affirmative and the second
question in the negative. (ECF No. 691 at 29-30.) Nothing in the parties’ initial briefing
convinces the court that the Special Master erred.
The court agrees with the Special Master’s analysis and conclusion, and adopts
them without modification.4
4
If a party at trial argues contrary to this analysis and construction, the jury should be instructed
that the microcontroller could be either a general purpose microcontroller capable of being used
for more than one application, or a single purpose microcontroller.
17
D. Fourth Claim Construction Chart
R&R#
4
4
4
4
Term (Chart #)
“math coprocessor…for
processing encryption
calculations” (#7)
Patent/Claim
‘510/1
“math coprocessor…for handling
complex mathematics of
encryption and decryption” (#7)
‘013/1
“modular exponentiation
accelerator circuit…for
performing encryption and
decryption calculations” (#8)
‘013/9
“coprocessor circuit” (#6)
‘095/1
Construction
a processor that works with
another processor processing
complex mathematics of
encryption
a processor that works with
another processor handling
complex mathematics of
encryption and decryption
a processor that works with
another processor performing
complex mathematics of modular
exponentiation for encryption and
decryption
A processor that works with
another processor
Maxim does not object to the Special Master’s recommended construction of
these terms. The OPs object, but only by way of a chart attached as an appendix to their
objection brief that incorporates their original claim construction briefing. (ECF No. 704-1.) In
short, the OPs contend that these coprocessors must be distinct from and run concurrently with
another processor. (ECF No. 642 at 31-33.) The Special Master rejected both of these positions
and the court adopts the reasoning set forth in the R&R. (ECF No. 691 at 35.)5
The OPs’ remaining arguments are that all referenced coprocessors must be
dedicated to performing modular exponentiation for the purpose of encryption and decryption.
(ECF No. 642 at 33-36.) The Special Master properly rejected these arguments, concluding that
claim differentiation applied and prosecution history disclaimer did not. (ECF No. 691 at 34-36.)
The Special Master also accurately considered the structure and content of the specifications in
5
If a party at trial argues contrary to this analysis and these claim constructions, the jury should
be instructed that the circuitry of the math coprocessor, the modular exponentiation accelerator
circuit, and the coprocessor circuit need not be structurally distinct from any other processor.
18
construing these terms. (Id.) The OPs’ original briefing provides no reason for this court to
disagree with the Special Master’s analysis or conclusion.
Therefore, the court adopts the Special Master’s recommended construction of
these terms, with slight modification to the third term for purposes of consistency, as noted with
bold typeface in the above individual claim construction chart only for ease of reference.
E. Fifth Claim Construction Chart
R&R#
5
Term (Chart #)
“real time clock circuit” (#22)
Patent/Claim
‘510/1
5
“real time clock” (#22)
‘013/1
5
5
“clock circuit” (#22)
“timing circuit” (#22)
‘013/9
‘095/1
Construction
continuously running clock circuit
that tracks time
continuously running clock circuit
that tracks time
circuitry that tracks time
circuitry that tracks time
Maxim does not object to the Special Master’s recommended constructions of
these terms. The OPs object, but only by way of a chart attached as an appendix to their
objection brief, incorporating their original claim construction briefing. (ECF No. 704-1.) The
original dispute between the parties concerned whether the clock circuitry of the asserted patents
determined the “real-world date and time.” (ECF No. 691 at 37, 39.) The court re-reviewed the
OPs’ original briefing on this point, including revisiting each of the OPs’ citations to the ‘510
and ‘013 Patents. (ECF No. 642 at 43-45 & nn. 37-39.) These references do not establish that
real time clocks or clock circuitries must include a date. Instead, these references explain how
these clocks/circuits are combined with other items to arrive at a “true time” or a “date/time
stamp.”
19
The R&R aptly explains that “true time” is only obtained if the output of these
clocks is combined with other items. The court agrees that the specifications include no
requirement that the clocks output a date. (ECF No. 691 at 39-40.) The OPs’ arguments to the
contrary are not supported by the intrinsic record, and are not persuasive. The Special Master’s
recommended construction of these terms is adopted, without modification, by the court.
F. Sixth Claim Construction Chart
R&R#
6
Term (Chart #)
“memory circuitry which can be
programmed by a service
provider to enable” (#15)
Patent/Claim
‘013/1
Construction
memory circuitry capable of
being programmed by a service
provider to enable
Maxim and the OPs both object to the Special Master’s recommended
construction of this term, but only by reference to their original claim construction briefing.
(ECF Nos. 705 at 8 and 704-2.) The parties now agree that the term speaks to the “capability of
being programmed.” The only remaining dispute, therefore, between the parties is whether the
service provider must be the one to “load” programs into the memory circuitry. Again the court
re-reviewed the OPs’ original briefing on this point, including revisiting each of the OPs’
citations to the ‘013 Patent. (ECF No. 642 at 56.) Although one reference discusses a preference
that the service provider “load[] the module with data,” (ECF No. 610 at JX-7, 3:47-49), the
balance of the patent, including the other references cited by the OPs, does not include this
language.
20
The court concurs with the Special Master that there is no indication in the
specification of the ‘013 Patent, or elsewhere in the intrinsic record, that the memory circuitry
can only be programmed by the service provider “loading” a program into memory. (ECF No.
691 at 44.) To be clear, the claim explicitly requires that the memory circuitry be “programmed
by a service provider” and to the extent Maxim’s original claim construction arguments sought to
eliminate that requirement, the court concurs with the Special Master’s rejection of them. (ECF
No. 634 at 24-26.) That being said, although the patent requires the service provider to program
the memory, there is no restriction in the patent as to how the service provider goes about doing
so. The court adopts the Special Master’s recommended construction of this term, without
modification.
G. Seventh Claim Construction Chart
R&R#
7
7
Term (Chart #)
“counter for counting a
transaction count” (#9)
“transaction counter for counting
a number of transactions that said
apparatus performs” (#9)
Patent/Claim
‘510/1
Construction
no construction required
‘095/6
no construction required
The OPs object to the Special Master’s failure to construe these terms beyond
their ordinary meaning, and include substantive briefing on this objection, (ECF no. 704 at 1415), to which Maxim responded, (ECF No. 715 at 17-19). The parties dispute whether the
“counter” or “transaction counter” (collectively, “counters”) must be hardware, as opposed to
software, and whether completed financial transactions are the only things being counted by the
“counters.” The Special Master concluded that the “counters” need not be hardware and that
completed financial transactions are not the only items being counted. The court agrees with the
21
Special Master’s analysis and conclusion with respect to the second issue, and adopts them. The
court agrees with the Special Master’s first conclusion, but for slightly different reasons.
Addressing the second issue first, the court agrees that completed financial
transactions are not the only things being counted by the “counters.” The specifications of the
‘510 and ‘095 Patents explicitly contradict the OPs’ contention that only successfully completed
financial transactions are counted. (ECF No. 610 at JX-3, 10:36-39; JX-9, 18:22-24.) In these
references, the “counter” increments by one whenever “a transaction script, which references this
object, is invoked.” Moreover, as correctly noted by Maxim, neither the ‘095 Patent nor the ‘510
Patent is limited to implementing financial transactions. (ECF No. 610 at JX-9, 4:65-7:65,
12:34-13:7, 14:50-62; JX-3, 1:5-17 (incorporating the ‘702 Patent by reference).) The court
agrees with the Special Master’s conclusion that the phrases “transaction count” and “counting a
number of transactions” need not be further construed. (ECF No. 691 at 48-49.) The phrases will
be understood, in context, by the jury. Finally, to the extent there is still some dispute between
the parties about whether a “counter” must be irreversible, the court agrees with the Special
Master’s rejection of that additional limitation; the specification of both patents is clear that only
when a counter is locked does it become irreversible. (Id. at 48.) It follows that counters cannot
be inherently irreversible.
The court’s analysis differs somewhat from the Special Master’s on the question
whether the “counters” are hardware elements. The court reviewed the initial briefing, the R&R,
the objection briefing, and the presentations accompanying the parties’ oral arguments and
reached the same conclusion as the Special Master, albeit for slightly different reasons. The
Special Master found that “counters” need not be hardware elements based upon four factors: (1)
the absence of the word “circuitry” in connection with the “counters;” (2) the failure of the OPs
22
to demonstrate that software cannot be “in electrical communication” with hardware; (3) the
language used in the specifications; and (4) the file history. (ECF No. 691 at 47.)
With respect to the Special Master’s first factor, the court does not reach the
conclusion that the patentees invariably appended the term “circuit” to hardware elements. For
example, the ‘510 Patent does not use the word “circuit” in connection with the terms
“nonvolatile memory,” “microcontroller core,” or “math coprocessor.” (ECF No. 601 at JX-3,
24:4, 23-24.) The ‘095 Patent does not use the word “circuit” in connection with the terms
“input/output interface” or “second memory.” (ECF No. 610 at JX-9, 32:62, 33:6.) All of these
are hardware elements even though they are not described as “circuits.” The referenced file
history reflecting that, at one time, one proposed claim included a “counter” while another
included “counting circuitry” is diluted in light of the plain language and structure of the actual
claims. (ECF No. 691 at 47.) On the face of the patents themselves, the word “circuitry” does
not invariably modify a hardware element, making the absence of that term from the “counter”
limitations non-dispositive. Therefore, this court does not adopt the Special Master’s reasoning
with respect to the first and fourth factors.
The court agrees with the Special Master’s analysis of the third factor and also
concludes that the language used in the specifications of the ‘510 Patent and the ‘095 Patent does
not indicate that “counters” can only be hardware. Instead, the language indicates that
“counters” can be either hardware or software. For instance, figure 2 of the ‘510 Patent reflects
that item 206 is a piece of hardware. There, however, are voluminous instances in which
software-related language is used to refer to “counters”, e.g., ECF No. 610 at JX-3, 6:10-13 (one
object that can be defined within a transaction group is “Transaction Counter”), 10:33-40
(“Transaction Counter” is among list of valid exemplary objects); JX-9, 3:55-4:14 (one object
23
that can be defined within a transaction group is “Transaction Counter”), 7:19-20 (create a
transaction sequence counter object initialized to zero), 13:10-25 (programmed into the module
by creating a transaction counter object), 18:18-26 (“Transaction Counter” is among list of valid
exemplary objects), fig. 4 at step B4 (create transaction sequence object (counter)), fig. 6 at step
D1 (transaction count object). The R&R includes many of these citations. (ECF No. 691 at 47.)
The only reasonable inference to be drawn from these references is that the “counters” could be
either hardware or software.
With respect to the second factor relied on by the Special Master, the court agrees
that the OPs’ argument that “in electrical communication” dictates a hardware-to-hardware
connection is not substantiated. (ECF No. 691 at 47.) The OPs presented no reason, other than
attorney argument, why a piece of electrical hardware and a software application cannot be in
“electrical communication.” As the words would be commonly understood, it is difficult to
comprehend how else software would communicate with anything. The phrase “electrical
communication” does not dictate that the “counters” be hardware elements, as the OPs maintain.
Based upon the court’s independent consideration of the totality of the record, the
court concludes that the ‘510 and ‘095 Patents do not limit “counters” to hardware.6 The court
agrees with the Special Master that these terms need not be further construed.
6
If a party at trial argues contrary to this analysis, the jury should be instructed that the
“counters” can be either hardware or software.
24
H. Eighth Claim Construction Chart
R&R#
8
8
Term (Chart #)
“time stamp” (#28)
“time stamp information” (#28)
Patent/Claim
‘095/1
‘013/9
Construction
an indication of at least the time
information indicating at least the
time
Maxim does not object to the Special Master’s recommended constructions of
these terms. The OPs object, but only by way of incorporating their original claim construction
briefing by reference. (ECF No. 704-1.) Originally, the OPs argued that the “time stamps” must
be stored or recorded and must always include both time and date information, while Maxim
argued that “time stamps” could be comprised only of date information. (ECF No 691 at 50-52.)
The court agrees with the Special Master’s analysis of the issues and likewise concludes that
there is no requirement that the information be stored or recorded and that there is no support for
either Maxim’s proposed construction that a “time stamp” can be comprised of only a date, or
the OPs’ proposed construction that both the date and the time are required.7
The court agrees with the Special Master’s recommended construction of these
terms.
7
If a party at trial argues contrary to this analysis, the jury should be instructed that the time
indication/information need not be stored or recorded.
25
I. Ninth Claim Construction Chart
R&R#
Term (Chart #)
9
“time stamping data transactions”
(#29)
Patent/Claim
‘510/1
Construction
applying at least the time to a data
transaction
Both Maxim and the OPs object to the Special Master’s recommended
construction of this term, but do so only by reference to their original claim construction
briefing. (ECF Nos. 704-2 and 715 at 8.) Both parties’ arguments are generally derivative of
those made immediately above in reference to the “time stamp” terms, and the Special Master’s
recommended construction is likewise derivative. The Special Master’s recommended
construction simply adds language acknowledging that “time stamping” is now used as a verb in
reference to a specific item, i.e., data transactions. The Special Master’s recommended
construction is proper and the court adopts it without modification.
J. Tenth Claim Construction Chart
R&R#
10
Term (Chart #)
Patent/Claim
“time stamping a predetermined
function” (#30)
Construction
not indefinite
‘013/1
applying at least the time to a
predetermined function
Both Maxim and the OPs object to the Special Master’s recommended
construction of this term, but only by reference to their original claim construction briefing.
(ECF Nos. 704-1 and 715 at 8.) The OPs argued that this term was indefinite because
“predetermined functions” are software programs and software programs cannot be time
stamped. (ECF No. 642 at 66-68.) Maxim contended that “predetermined functions” are the
functions performed by or results of executing the software, not the software itself. (ECF No.
26
651 at 16.) The Special Master found that the OPs’ argument “does not conform to the claims
and is not mandated by the specification.” (ECF No. 691 at 59.) The court agrees. The OPs’
argument that “predetermined function” is synonymous with software program is unsupported,
and illogical; functions are performed by software, they are not the software itself. Once that
argument is rejected, the construction of this term follows from the court’s prior construction of
the terms “time stamp” and “time stamping data transactions.” The court adopts the Special
Master’s recommended construction without modification.
K. Eleventh and Twelfth Claim Construction Charts
R&R#
11
R&R#
12
Term (Chart #)
“transaction program” (#32)
Term (Chart #)
Patent/Claim
‘013/9&11
Patent/Claim
“transaction script” (#33)
‘095/1
Construction
a series of instructions, (list of
objects), to be carried out as part
of a transaction
Construction
a series of instructions, (list of
objects), to be carried out as part
of a transaction
The OPs object to the Special Master’s recommended construction of these terms,
and include substantive briefing on this objection, (ECF No. 704 at 19-21), to which Maxim
responds (ECF No. 715 at 22-24). The OPs contend that the patentees acted as their own
lexicographer with respect to these terms, and Maxim counters that the allegedly definitional
language is directed only toward “exemplary implementation details,” and not the general
meaning of the terms themselves. (Id.) The parties agree that the two terms are to be given the
same meaning. (ECF No. 691 at 61.)
27
The court concurs that the context in which the purported definition of
“transaction script” appears, and the precise language used in the patent, does not indicate that
the patentees acted as their own lexicographer because some of the cited language is definitional,
while some of it is functional and explanatory. (ECF No. 691 at 62; ECF No. 610 at JX-9, 18:818.) With an aim toward arriving at a definition of the term that includes all the definitional
language of the patent, excludes the functional language, and will be understandable and
meaningful to a jury, the court adopts the Special Master’s recommended construction, with
minor modification, noted in bold typeface for ease of reference only, in the above individual
claim construction chart.
L. Thirteenth Claim Construction Chart
R&R#
Term (Chart #)
13
“transaction group” (#31)
Patent/Claim
‘013/11
Construction
A set of objects that are defined
by a service provider
The OPs object to the Special Master’s recommended construction of this term,
but only by reference to their prior claim construction briefing. (ECF No. 704-1.) The dispute is
whether the sentence following the recommended construction which states “[t]hese objects
include both data objects (encryption keys, transaction counts, money amounts, date/time
stamps, etc.) and transaction scripts which specify how to combine the data objects in useful
ways” must be included as part of the construction of this term. (ECF No. 610 at JX-7, 3:56-64.)
The court agrees with the Special Master that it need not, and agrees that the court need not look
beyond the language of the claims themselves to reach this result. (ECF No. 691 at 63-64.)
Claim 11 of the ‘013 Patent states “… wherein said transaction group can comprise a transaction
[script] created by a service provider.” (ECF No. 610 at JX-7, 32:1-5.) This dependent claim
28
would be meaningless if transaction groups, by definition, included transaction scripts. The
court agrees with the Special Master that the sentence following the recommended construction,
set forth immediately above, is exemplary and not definitional. (ECF No. 691 at 64.) The court
adopts the recommended construction without modification.
M. Fourteenth Claim Construction Chart
R&R#
14
Term (Chart #)
Patent/Claim
“store a transaction script, the
transaction script including at least
a representation of the time stamp
‘095/1
generated by the timing circuit”
(#26)
Construction
not indefinite
no construction required
The OPs object to the Special Master’s recommended construction of this term,
but only by reference to their prior claim construction briefing. (ECF No. 704-1.) The Special
Master rejected the OPs’ argument that this claim term was indefinite. The OPs contend that the
term is indefinite because: (1) the specification does not disclose or explain its meaning; (2) the
asserted claim is internally irreconcilable; and (3) users cannot create transaction scripts. (ECF
No. 641 at 68-70.) In opposition, Maxim argues that several embodiments render the term
understandable by reciting various examples of transaction scripts that include a “representation”
of the time stamp. (ECF No. 634 at 59.)
As with the OPs’ indefiniteness argument regarding “time stamping a
predetermined function,” their foundational interpretation of the claim and specification
language, which allegedly renders the claim indefinite, is erroneous. The claim contemplates a
script that includes a “representation of the time stamp” and not that the script itself be time
stamped, as the OPs contend. Maxim presented numerous examples from the specification that
reflect operation of the properly interpreted requirement. (ECF No. 634 at 59.) The OPs cannot
29
meet the “exacting standard” to prove by clear and convincing evidence that one of ordinary skill
in the relevant art could not discern the boundaries of the claim based upon the claim language,
the specification, the prosecution history, and the knowledge in the relevant art. Halliburton, 514
F.3d at 1249-50. Properly read in the context of the specification, the claim is “amenable to
construction” and is not “insolubly ambiguous.” Datamize, 417 F.3d at 1347. The OPs’
arguments to the contrary are not supported by any evidence, beyond counsel’s arguments, and
are based upon a fundamental misapprehension of what the claim states. The court agrees with
and adopts the Special Master’s analysis on this issue. This term is not indefinite, and requires
no further construction.
N. Fifteenth Claim Construction Chart
R&R#
15
Term (Chart #)
“said combination of said portable
module reader and said secure
microcontroller performing secure
data transfers with said first
portable module” (#24)
Patent/Claim
Construction
not indefinite
‘510/1
no construction required
The OPs object to the Special Master’s conclusion that this term is not indefinite
for mixing apparatus and method claim limitations under the authority of IPXL Holdings, LLC v.
Amazon, Inc., 430 F.3d 1377 (Fed. Cir. 2005). This objection was fully briefed, (ECF Nos. 704
at 11-14 and 715 at 15-17), and argued at both the September and November Hearings. As
stated immediately above, the indefiniteness standard is “exacting” and requires proof by clear
and convincing evidence. Halliburton, 514 F.3d at 1249-50. The ’510 Patent is presumed to be
valid. 35 U.S.C. § 282. Given these presumptions and the burden of proof, Maxim is correct that
the OPs’ failure to produce any expert evidence indicating how the claim would, or would not,
30
be understood by one of ordinary skill in the art in response to Maxim’s expert testimony on that
issue is significant, and arguably dispositive. (ECF No. 715 at 15-16.)
Nevertheless, the court considered the controlling precedent of the Court of
Appeals of the Federal Circuit with an aim to determining how it would apply to the precise
claim language at issue in this case. These authorities demonstrate that the concern in “mixed
claims” cases is whether a person of ordinary skill in the art could understand whether
infringement occurs when a system is created or when it is used. IPXL, 430 F.3d at 1384. It is
impossible to answer that question by comparing the words used in the asserted patents, with the
words used in a patent considered in a decision issued by the court of appeals. Instead, these are
highly fact-specific determinations, and this court can discern no bright-line rule regarding
permissible language as opposed to impermissible language from the court of appeals’ body of
precedent. Compare Rembrandt Data Technologies, LP v. AOL, LLC, 641 F.3d 1331 (Fed. Cir.
2011) (claim invalid where last element of apparatus claim was “transmitting the trellis encoded
frames”), and IPXL, 430 F.3d at 1384 (claim depending from an apparatus claim and adding the
claim limitation that “the user uses the input means” deemed to be indefinite), with HTC Corp. v.
IPCOM GMBH & Co., 667 F.3d 1270 (Fed. Cir. 2012) (claim was not indefinite, even though
apparatus claim included terms such as “storing” and “holding,” because these terms described a
particular network environment and it was clear that infringement occurred when “the claimed
apparatus: the mobile station” was made, used or sold), and Microprocessor Enhancement Corp.
v. Texas Instruments Inc., 520 F.3d 1367, 1374-75 (Fed. Cir. 2008) (claim not indefinite because
an apparatus claim that included the phrase “performing a boolean algebraic evaluation” spoke
only to a structure “capable of performing the recited functions”).
31
The Special Master explained why, read in the context of the specification and
claims of the ‘510 Patent, it would be understood by a person of ordinary skill in the art that
infringement of the ‘510 Patent occurred when a system capable of performing secure data
transfers was created. (ECF No. 691 at 72-73.) The court concurs that the claim is directed to the
creation of a system, made up of various parts that are combined for a particular purpose, i.e.
secure data transfers. It would be readily apparent to a person of ordinary skill in the art that
creation of a system with the required parts and the referenced capabilities would result in
infringement, and that actual performance of the purpose for which the system was built is
unnecessary. The claim’s inclusion of the word “performing” describes the capabilities of the
system, once it is built; it does not indicate that the built system must actually be used. Again,
given the fact-sensitive nature of a court’s determination of this issue, the OPs’ failure to produce
evidence demonstrating how a person of ordinary skill in the art would understand the claims is
problematic. For all these reasons, the court agrees with the Special Master and finds that the
OPs failed to prove, by clear and convincing evidence, that the claim is indefinite for mixing
apparatus and method claim limitations.
O. Sixteenth Claim Construction Chart
R&R#
Term (Chart #)
Patent/Claim
16
“responsive to a verification signal
from said electronic device” (#23)
Construction
not indefinite
‘095/1
in response to a signal from
said electronic device that can
be verified as authentic
The Special Master found this term to be indefinite, and claim 1 of the ‘095 Patent
to be invalid. Maxim objects to this conclusion, (ECF No. 705 at 2-8), and the OPs argue in
support of this court’s adoption of the Special Master’s finding (ECF No. 714). The court heard
32
oral argument on this term at the November Hearing. As summarized above, the burden is on
the OPs to prove, by clear and convincing evidence, that the term is insolubly ambiguous and
incapable of being given any reasonable meaning. Biosig Instruments, Inc. v. Nautilus, Inc., 715
F.3d 891, 901-02 (Fed. Cir. 2013); Young, 492 F.3d at 1346. Close questions of indefiniteness
must be resolved in favor of the patentee. Bancorp Services, LLC v. Hartford Life Ins. Co., 359
F.3d 1367, 1372 (Fed. Cir. 2004).
The Special Master found this term to be indefinite because the verification signal
is “typically” contained in the certificate, which is separately claimed and not linked to the
“verification signal,” and because the recited “adjustment” is made in response to the “compare
and check” operations, not in response to the signal originating from the “electronic device,” as
required by the claims. (ECF No. 691 at 75-78.) The Special Master’s conclusions are wellreasoned and supported by the record. So too, however, are Maxim’s responsive positions.
Maxim convincingly cites to the language of the patent itself indicating that the
“certificate” claimed earlier in claim 1 is different from the “verification signal.” (ECF No. 705
at 8.) With respect to the Special Master’s second justification, Maxim explains that the term
“verification signal” can be afforded a reasonable interpretation if it is understood to be a signal
that is capable of being verified, resulting in adjustments being made indirectly or ultimately in
response thereto. (ECF No. 705 at 5-7; ECF No. 610 at JX-9, 14:30-35, figs. 8 & 10.) Maxim’s
argument that the information provided from the merchant or service provider side of the
transaction in figures 8 and 10 is what allows the “compare and check” operations to proceed,
and adjustment to ultimately take place, is convincing. (ECF No. 705 at 7.) Both experts opined
in support of the position advanced by the party by whom they were retained. The OPs’ expert,
33
however, did not opine that a person of ordinary skill in the art would understand “responsive” to
mean only immediately or directly responsive.
When the evidence is such that reasonable persons can disagree, this court is
constrained to issue a construction that preserves the validity of the claim. Biosig, 715 F.3d at
901-02; Bancorp, 359 F.3d at 1372.
The court need not “rewrite” the claims of the patent to
reach this conclusion; rather, the intrinsic record aptly supports Maxim’s position. This court is
required by controlling precedent to reject the Special Master’s recommendation and issue a
construction of the term “verification signal.”
P. Seventeenth Claim Construction Chart
R&R#
17
Term (Chart #)
“substantially unique
electronically readable
identification number” (#27)
Patent/Claim
‘510/1
Construction
an electronically readable number
that is sufficiently unique to
identify the portable module from
any other portable module
The OPs object to the Special Master’s conclusion that this term is not indefinite.
(ECF No. 704 at 8-11.) Maxim responds to the OPs’ position, (ECF No. 715 at 12-14), and this
objection was argued at the November Hearing. The Special Master concluded that the
specification of the ‘510 Patent provides criteria for one skilled in the art to determine if an
identification number is substantially unique. (ECF No. 691 at 81.) The court concurs and
adopts the Special Master’s recommended claim construction without modification.
When a word of degree is used, a court must decide whether the patent provides
“some standard for measuring that degree.” Biosig, 715 F.3 at 898. In this instance, the ‘510
Patent claims a “first portable module comprising…a substantially unique electronically readable
identification number.” (ECF No. 610 at JX-3, 24:9-10.) The specification explains that the
34
portable module may have a number that “uniquely identifies the portable module from any other
portable module.” (Id., 4:7-9.) In this context, it is clear that “substantially” unique is unique
enough to distinguish one portable module from another portable module, making the term
definite. The Court of Appeals for the Federal Circuit’s decision in Exxon Research and
Engineering Co. v. United States, 265 F.3d 1371 (Fed. Cir. 2001), provides significant guidance
on this question. In that case, the court considered whether the term “substantial absence of slug
flow” was indefinite. Exxon, 265 F.3d at 1380-81. The specification explained that slug flow
should be avoided because it could interfere with reactor operations. Id. at 1381. The court
concluded that the term was not indefinite because one of ordinary skill in the art would
understand that “[w]hether there is a ‘substantial absence of slug flow’ therefore can be
determined with reference to whether reactor efficiency is materially affected.” Id. Similarly, the
‘510 Patent teaches that the identification number must be unique because it must distinguish one
portable module from another portable module. (ECF No. 610 at JX-3, 4:7-9.) Whether an
identification number is “substantially unique” therefore can be determined with reference to
whether the number can distinguish one module from another. The patent’s inclusion of the
word “substantially” provides for the possibility that this determination may differ depending on
the number of modules in existence, and any other identifying features of them, such as, for
example, country codes, manufacturer details, or model numbers.
The OPs made no sustainable argument, and certainly presented no clear and
convincing evidence, that the patent provides no standard for measuring the degree of uniqueness
such that a person of ordinary skill in the art would be unable to determine if an identification
number was “substantially unique” or not. The claim term amenable to construction and is, thus,
not indefinite.
35
Q. Eighteenth Claim Construction Chart
R&R#
Term (Chart #)
18
“certificate” (#3)
18
Patent/Claim
‘095/1
“signed certificate” (#40)
‘702/1
Construction
an electronic document that has
indicia to attest that it is authentic
an encrypted certificate
A subset of the OPs, the Joining Parties (“JPs”), filed independent claim
construction briefing with respect to the term “certificate” in which they proposed that the term
be construed to mean “an electronic document equivalent to cash.” (ECF No. 680.) The JPs
object to the Special Master’s recommended construction because it fails to include this notion of
cash equivalency. (ECF No. 713.) Maxim responds to the JPs’ objections. (ECF No. 718.) The
OPs originally proposed a different construction, and also object to the Special Master’s
recommended construction of both “certificate” and “signed certificate,” but only by way of
reference to their previous briefing. (ECF No. 704-1.)
The court reviewed the R&R, the original claim construction briefing, and the
objection briefing and failed to identify any error or omission in the Special Master’s analysis
and conclusion. The JPs’ cash-equivalency arguments and positions are based upon
specification language that is directed to particular embodiments of the invention, (ECF No. 713
at 2), whereas the file history and remainder of the patent indicate that the ‘095 Patent is not
limited to cash transactions, (ECF No. 610 at JX-2, 244MAX001382; JX-9, 1:27-28). The term
“certificate” is used in reference to many embodiments of the ‘095 Patent, several of which do
not involve money, including the Software Authorization embodiment, for example. Therefore,
the JPs’ arguments are contradicted by the specification, and cannot be correct. The certificate is
not a cash equivalent. The Special Master’s recommended construction is adopted without
modification.
36
R. Nineteenth Claim Construction Chart
R&R#
19
Term (Chart #)
Patent/Claim
“challenge number” (#4)
‘095/1
Construction
in challenge/response mode, a
random number that is sent to
another party, which party is
challenged to return that
random number as part of its
response
The Special Master recommended that this term be construed to mean “a random
number that is sent from a first party and received by a second party, the random number
allowing the second party to indicate authenticity of the response by including the random
number in response.” (ECF No. 691 at 90-91.)
Maxim objects to the Special Master’s
recommended construction of this term, but only by way of reference to its prior briefing. (ECF
No. 705 at 8.) The OPs do not object to the Special Master’s recommended construction. In its
original claim construction briefing, Maxim proposed that this term be construed to mean “a
random number used to authenticate a message.” (ECF No. 634 at 30-32.) The OPs originally
proposed that additional details be added to the definition to indicate what the challenge number
is used for and who sends and receives it. (ECF No. 642 at 36-39.) The Special Master’s
recommended construction adopts neither proposal, but more closely reflects the OPs’
suggestion.
The specification of the ‘095 Patent defines explicitly what a challenge number is
and what purpose it serves: “[a] random number is sent and used in challenge/response mode.
The other party is challenged to return the random number as part of their response.” (ECF No.
610 at JX-9, 8:28-34.) Because the ‘095 Patent defines this term, informing the jury of the
definition the patentees chose to use is preferred.
37
The court adopts the Special Master’s
reasoning in interpreting this term, but modifies the language to conform to the words used in the
patent itself.
S. Twentieth Claim Construction Chart
R&R#
Term (Chart #)
20
“storing” (#25)
20
“store” (#25)
Patent/Claim
‘510/1
‘095/1&5
‘013/9
‘095/1
Construction
no construction required
no construction required
The OPs object to the Special Master’s failure to construe these terms, but only by
way of reference to their prior claim construction briefing. (ECF No. 704-1.) Maxim does not
object. The OPs contend that short-term memory does not qualify as “storing” and that the terms
should be construed to mean saving only in long-term memory. As the Special Master correctly
articulated, this argument is contradicted by the specification, and illogical when inserted into the
claims. (ECF No. 691 at 91-93.) Against these facts, the OPs cited to no intrinsic evidence to
indicate that saving something in short-term memory cannot be “storing.”8
The court agrees that, as a matter of claim construction, no definition of these
terms is required.
8
If a party at trial argues contrary to this analysis, the jury should be instructed that the terms
“storing” and “store” are not limited to saving items in long-term memory.
38
T. Twenty-First Claim Construction Chart
R&R#
21
Term (Chart #)
“adjust said first data object
according to said second data
object” (#1)
Patent/Claim
‘095/1
Construction
no construction required
The OPs object to the Special Master’s failure to construe this term, but only by
way of reference to their prior claim construction briefing. (ECF No. 704-1.) Maxim does not
object. The original dispute between the parties was whether the term “adjust” is limited to
adding and subtracting operations. The Special Master concluded that the OPs’ argument was
inconsequential because it was based upon “adjusting” the clock offset, while the claim term in
dispute speaks to adjusting the “first data object.” (ECF No. 691 at 94-95.) The court agrees.
The court considered each of the OPs’ citations to the various instances where the patent refers to
“adding” or “subtracting,” (ECF No. 642 at 22), but concludes that none of them demonstrate
that the patentees assigned any special meaning to the word “adjust” in the ‘095 Patent. The OPs
fail to establish that “adjust” is assigned anything other than its plain meaning in the ‘095 Patent
for purposes of claim construction.
The jury will not need any further definition of this word. The court agrees with
the Special Master’s reasoning and conclusion with respect to this term, and adopts them without
modification.
39
U. Twenty-Second Claim Construction Chart
R&R#
Term (Chart #)
22
“passing” (#20)
Patent/Claim
‘880/1
Construction
no construction required
The OPs object to the Special Master’s failure to construe this term, but only by
way of reference to their prior claim construction briefing. (ECF No. 704-1.) Maxim does not
object. The OPs argue that the term “passing” should be interpreted to mean “transferring”
because the specification uses that word instead of the word “passing.” (ECF No. 642 at 22-23.)
Although the OPs are correct on this point, inserting the word “transferring” in the claim in place
of “passing” is meaningless. As the Special Master noted, Maxim and the OPs agreed at the
September Hearing that “transferring does not mandate deleting and storing.”9 (ECF No. 691 at
96.) As this was the real dispute between the parties, replacing the word “passing” with
“transferring” would provide no further guidance to a jury.
The word “passing” is easily understood by a layperson, and the jury will be wellequipped to apply the meaning of that term in the context of the claims. The OPs provided no
justification for assigning any special meaning to the term beyond the plain meaning, and
adoption of the OPs’ suggestion, i.e., transferring, would serve no purpose under the
circumstances. The court agrees with the Special Master’s reasoning and conclusion with
respect to this term, and adopts them without modification.
9
If a party at trial argues contrary to this stipulation, the jury should be instructed that deleting
and storing is not required.
40
V. Twenty-Third Claim Construction Chart
R&R#
Term (Chart #)
23
“packet” (#39)
Patent/Claim
‘510/3
Construction
block of information
Although Maxim filed a supplemental claim construction brief with respect to this
term following the September Hearing, it does not object to the Special Master’s recommended
construction. (ECF No. 687.) S/G10 object, but only by way of reference to their prior claim
construction briefing. (ECF No. 704-1.) Notably, the recommended construction asserted in
S/G’s original claim construction briefing differed from the position they advanced at the
September Hearing. (ECF No. 691 at 97.)
Both proposed constructions included details
regarding the creation or use of the “packet.” As the Special Master correctly found, however,
such details appear in the language of the claims themselves, and need not be included as part of
the definition of the word. (ECF No. 691 at 99.) The court agrees with the Special Master’s
reasoning and conclusion with respect to this term, and adopts them without modification.
10
Because Maxim only asserts the ‘702 Patent against certain OPs, i.e., Starbucks and Groupon,
objections to the Special Master’s recommended construction of the terms in that patent were
only made by those two parties, hereinafter referred to as “S/G.”
41
W. Twenty-Fourth Claim Construction Chart
R&R#
24
Term (Chart #)
Patent/Claim
“money register” (#43)
‘702/1
Construction
an object that is used to represent
money or some other form of
credit
S/G object to the Special Master’s recommended construction of this term, but
only by reference to their prior claim construction briefing. (ECF No. 704-1.) Maxim objects,
but also only by reference to its original claim construction briefing. (ECF No. 705 at 8.) The
disputes addressed by the Special Master were whether a “money register” must be: (a)
inherently locked; and (b) limited to a “digital cash value.” (ECF Nos. 634 at 80-81 and 642 at
78-79.) The ‘702 Patent explicitly defines the “money register” as an object that may be used to
represent money or some other form of credit, and further explains the necessity of locking the
“money register” once it is created. (ECF No. 610 at JX-1, 18:13-21.) This specification
language alone resolves the disputes presented by the parties. The patent states the importance
of locking a “money register” after it is created, indicating that a “money register” is not
inherently locked. (Id.) Also, the patent explains that the “money register” represents money “or
some other form of credit,” contradicting the OPs’ contention that the money register must
contain a “digital cash value.” (Id.)
The court agrees with the Special Master’s reasoning and conclusion with respect
to this term, and adopts them without modification.
42
X. Twenty-Fifth Claim Construction Chart
R&R#
Term (Chart #)
25(a) “amount requested” (#37)
25(b) “decrypted amount requested”
(#41)
Patent/Claim
‘702/1
‘702/1
Construction
no construction required
a decrypted version of the amount
requested
S/G object to the Special Master’s failure to construe the first term, but only by
reference to their prior claim construction briefing. (ECF No. 704-1.) S/G do not object to the
Special Master’s recommended construction of the second term. Maxim does not object to either
of the Special Master’s recommendations, and agreed to the Special Master’s provisional
construction of the latter term at the September Hearing. (ECF No. 709 at 174-75.) The original
dispute with respect to the term “amount requested” was whether a money equivalent limitation
should be included. The Special Master addressed this argument in the context of the term
“money register,” which analysis the court adopted. The specification of the ‘702 Patent
explicitly contradicts any requirement that the “money register” be limited to digital cash by
referencing explicitly “other forms of credit.” (e.g., ECF No. 610 at JX-1, 18:13-21.) Once this
dispute is resolved, no construction of the term “amount requested” is required, and the
“decrypted amount requested” is self-defining, as set forth by the Special Master. The court
agrees with the Special Master’s reasoning and conclusion with respect to these terms, and
adopts them without modification.
43
Y. Twenty-Sixth Claim Construction Chart
R&R#
26
Term (Chart #)
“adding said decrypted amount
requested to a money register”
(#42)
Patent/Claim
‘702/1
Construction
increasing the amount of a money
register by the decrypted amount
requested
S/G object to the Special Master’s recommended construction of this term, but
only by way of reference to their prior claim construction briefing. (ECF No. 704-1.) Maxim
does not object. The original dispute between the parties was whether a summing of two
numbers was required, or whether, instead, increasing a value or balance would suffice. The
terms “decrypted amount requested” and “money register” were previously construed, which
means that the only term possibly in need of construction is the word “adding.” S/G contend that
“adding” must be limited to performing the mathematical operation of summing two numbers
together. (ECF No. 642 at 76-78.) The Special Master found that this limitation is not called for
by the claims. (ECF No. 691 at 104.) The court agrees.
The Special Master’s recommended construction reflects that “adding,” in this
context, refers to increasing the value or balance of an account, and not necessarily to executing
a mathematical operation. The court adopts the Special Master’s recommended construction
without modification.
Z. Twenty-Seventh Claim Construction Chart
R&R#
27
Term (Chart #)
Patent/Claim
“placing the module in
communication with the electronic
‘702/1
device” (#36)
Construction
no construction required
S/G object to the Special Master’s failure to construe this term, but only by
reference to their prior claim construction briefing. (ECF No. 704-1.) Maxim does not object.
44
S/G contend that the term should be limited to user-initiated communication between the module
and the electronic device. (ECF No. 642 at 71.) The Special Master gave full consideration to
S/G’s arguments, reviewed the specification and claims, and concluded that the method claim of
the ‘702 Patent does not specify which entity must perform any particular step. (ECF No. 691 at
106.) The court reaches the same conclusion. The court agrees with the Special Master that the
term is not limited to user-initiated communication, and requires no further construction once
that dispute is resolved.
AA.
Twenty-Eighth Claim Construction Chart
R&R#
Term (Chart #)
28
“microcontroller core” (#17)
Patent/Claim
‘510/1
‘013/1&9
Construction
a processor unit contained within
a microcontroller
The OPs object to the Special Master’s recommended construction of this term,
but only by reference to their prior claim construction briefing. (ECF No. 704-2.) Maxim does
not object. The OPs contend that the microcontroller core must be limited to a central processing
unit (“CPU”). The Special Master concluded that the OPs did not support that position, and that
even some of their own extrinsic evidence contradicted it. (ECF No. 691 at 106-07.) The OPs
cite to a dictionary and to the testimony of Maxim’s expert in support of their argument that a
microcontroller always contains a CPU. (ECF No. 642 at 55.) The court reviewed the testimony
of Maxim’s expert and does not consider it to support the OPs’ contention. (ECF No. 642-27.)
The expert never spoke specifically to CPUs in the portions of the deposition cited by the OPs,
(Id. at 25:22-25, 30:12-19), and the entirety of the expert’s testimony supports the conclusion
reached by the Special Master. The court adopts the Special Master’s recommended
construction without modification.
45
BB.
R&R#
29
Twenty-Ninth Claim Construction Chart
Term (Chart #)
"monetary equivalent" (#35)
Patent/Claim
'70211
Construction
no construction required, but a
limitation
Maxim objects to the Special Master's failure to construe this term, but only by
reference to its prior claim construction briefing. (ECF No. 705 at 8.) S/O do not object. The
parties agree that the term need not be construed, but disagree whether the term, being located in
the preamble, is a limitation or not. The Special Master concluded that the term provided
antecedent basis to "electronic module" and was, therefore, a limitation. (ECF No. 691 at 108
09.) The court can identify no error in that conclusion and adopts it, without modification.
For the reasons set forth above, the Special Master's Report and
Recommendation, (ECF No. 691), will be adopted, except to the extent noted otherwise. All
disputed claim terms shall be construed in accordance wi th the order of this court filed
contemporaneously with this memorandum opinion.
Dated: December 17,2013
BY THE COURT,
lsI JOY FLOWERS CO
Joy Flowers Conti
Chief United States Dist ct Judge
46
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