Datatreasury Corporation v. Wells Fargo & Company et al
Filing
742
***MODIFIED BY CLERK TO ADD NAMES OF EXHIBITS***DEFENDANTS RESPONSIVE CLAIM CONSTRUCTION BRIEF filed by Bank of America Corporation, Bank of America, National Association, U.S. Bancorp, U.S. Bank, National Association, Wachovia Corporation, Wachovia Bank, National Association, UBS Americas, Inc., BB&T Corporation, Branch Banking and Trust Company, The Bank of New York, HSBC North America Holdings Inc, HSBC Bank USA, N.A., National City Corporation, National City Bank, The Bank of New York Co, Inc., Unionbancal Corporation, Union Bank of California National Association, Bank of Tokyo-Mitsubishi UFJ, LTD, Citizens Financial Group, Inc., City National Corporation, Comerica Incorporated, City National Bank, Comerica Bank & Trust, National Association, Deutsche Bank Trust Company Americas, First Citizens Bancshares, Inc., First Citizens Bank & Trust Company, Keycorp, Keybank National Association, Lasalle Bank Corporation, Lasalle Bank NA, M&T Bank Corporation, M&T Bank, The PNC Financial Services Group, Inc., PNC Bank, National Association, The Clearing House Payments Company, LLC, First Data Corporation, Telecheck Services, Inc.. (Attachments: #1 Exhibit A -Dft Construction of Disputed Terms (2) Exhibit B -Agreed Constructions (3) Exhibit C - Indefinite Means Plus Function Terms (4) Exhibit D (5) Exhibit E (6) Exhibit F (7) Exhibit G (8) Exhibit H (9) Exhibit I (10) Exhibit J (11) Exhibit K(12) Exhibit L (13) Exhibit M (14) Exhibit N (15) Exhibit O (16) Exhibit P (17) Exhibit Q (18) Exhibit R (19) Exhibit S (20) Exhibit T (21) Exhibit U (Melsheimer, Thomas) Modified on 7/10/2007 (sm, ). Modified on 7/10/2007 (sm, ).
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Datatreasury Corporation v. Wells Fargo & Company et al
Doc. 742
Case 2:06-cv-00072-DF-CMC
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UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION DATATREASURY CORPORATION, Plaintiff v. WELLS FARGO & COMPANY, et al. Defendants DEFENDANTS' RESPONSIVE CLAIM CONSTRUCTION BRIEF In accordance with the Court's Docket Control Order and Patent Rule 4-5(b), Defendants1: Bank of America Corporation Bank of America, National Association Bank of Tokyo-Mitsubishi UFJ, LTD BB&T Corporation Branch Banking and Trust Company Citizens Financial Group, Inc. City National Bank City National Corporation Comerica Bank & Trust, National Association Comerica Incorporated Deutsche Bank Trust Company Americas First Citizens Bancshares, Inc. First Citizens Bank & Trust Company First Data Corporation HSBC Bank USA, National Association HSBC North America Holdings Inc. KeyCorp KeyBank, National Association Lasalle Bank Corporation Lasalle Bank, National Association M&T Bank M&T Bank Corporation National City Bank National City Corporation PNC Bank, National Association PNC Financial Services Group, Inc. Telecheck Services, Inc. The Bank of New York The Bank of New York Co, Inc. The Clearing House Payments Company, LLC U.S. Bancorp U.S. Bank, National Association UBS Americas, Inc. Union Bank of California, National Association UnionBanCal Corporation Wachovia Bank, National Association Wachovia Corporation 2:06-CV-72 DF
(collectively, "Defendants") hereby submit their responsive claim construction brief regarding disputed terms from the claims of U.S. Patent Nos. 5,265,007 (the "'007 Patent"); 5,717,868 (the "'868 Patent"); 5,583,759 (the "'759 Patent"); and 5,930,778 (the "'778 Patent") (collectively, the "Huntington Patents"). Each listed Defendant joins this Response solely with respect to those terms found in claims asserted against it.
1
First Citizens Bancshares, Inc. joins this Response subject to, and without waiver of, its lack of personal jurisdiction defenses.
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TABLE OF CONTENTS I. II. INTRODUCTION ........................................................................................................... 1 DISPUTED TERMS IN THE '007 PATENT ............................................................... 2 A. " Pre-Selected Financial Institutions," " Pre-Selected Institutions," and " Participants" Are Financial Institutions that Directly Participate in a Central Check Clearing System.............................................................................3 1. 2. B. C. D. Participants and Pre-Selected Institutions Differ from IndirectSettling Institutions....................................................................................3 The Central Check Clearing System Is Distinct from the Federal Reserve System.............................................................................6
" Real Time," " in Real Time," and " Real Time in Correspondence with the Occurrence of an Event" Requires Instantaneousness. ................................... 6 " Settlement," " Regular Periodic Settlement," and " Final Settlement" Require a Calculation and Transfer of Amounts Owed and Payable. ................... 8 Settlement Among the Direct Participants Occurs After Regular, Prescheduled Local Settlement Between the Participants and the NonParticipants. ........................................................................................................... 9 The Preambles of Claims 1 and 4 Are Limiting. ................................................. 10 1. The Preambles of Claims 1 and 4 Recite Essential Structure and Provide Antecedent Basis for Limitations in the Bodies of the Claims. ............................................................................................... 10 A " Pre-Selected Site" Is Limiting and Is a Specific and Exclusive Geographic Region of a Previously Chosen Financial Institution. ................................................................................ 11
E.
2.
F.
" Transit Status of the Financial Instruments to be Cleared" Provides Information About Whether Instruments Are Physically Sent and Received. ............................................................................................................. 12 A " Central Processing Unit" Connects All Originating and Receiving Institutions. .......................................................................................................... 13 " Means for Receiving Including Means for Physically Accepting the Instruments Transported from Other Institutions" Has No Corresponding Structure......................................................................................13 The " Means at an Institution by Which Instruments Are Sorted by the Site Locality [and Sent]..." Is a Sorter and Air and Ground Transportation......................................................................................................14 The " Means at Each of the Participants (1) for Sending and Receiving Financial Instruments...(2) for Sending and Receiving in Real Time..., and (3) for Addressing the Central Processing Unit..." Has No Corresponding Structure for Some of the Recited Functions. ....................... 14
G. H.
I.
J.
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K.
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" A Time Control for Determining the Time of Physical Transport ... " Is a Means-Plus-Function Limitation with No Corresponding Structure...............................................................................................................15
III.
DISPUTED TERMS IN THE '868 PATENT ............................................................. 16 A. B. C. D. E. F. G. H. " Co-mingled Records" Are Intended for Multiple Institutions. .......................... 17 " Translating" Converts Records from One File Format to a Dissimilar and Incompatible File Format..............................................................................19 " File Format" Is a Unique Arrangement of Electronic Data Fields in a Settlement Record................................................................................................20 The " Means for Receiving" Terms Have No Corresponding Structure. ............. 20 The " Means for Storing... " Is Accessible Only by the Institution Designated to Receive the Information. .............................................................. 21 The Preambles of Claims 1, 24, 45, 61, and 80 Are Limiting. ............................ 22 " Processor" and " Master Processor" Are Single, Centralized Devices Through Which All Data Files Are Transmitted. ................................................ 24 " Predetermined Data Format Parameters" Is a Pre-Selected Specification Defining the Arrangement of Data Fields Within a Financial Record. ................................................................................................. 26 " Financial Instruments Being Exchanged ... " Means Physically Exchanged............................................................................................................26 " Institution" Is a Bank or Other Financial Institution. ........................................ 27 " Financial Instrument Information" Is Information Derived from a Financial Instrument. ........................................................................................... 27 The Claim 2 Means-Plus-Function Terms Have No Corresponding Structure...............................................................................................................28
I. J. K. L. IV.
DISPUTED TERMS IN THE '759 AND '778 PATENTS ......................................... 29 A. Delivery of Financial Instruments from the First Location to the Payment System (or the " Second Location" ) Is Made Without Intermediate Delivery to the Bank.......................................................................30 1. 2. B. There Is No Intermediate Delivery to the Collecting and Clearing Bank En Route to the Second Location. ................................... 32 The " Second Location" Is the Entry Point into the Payment System and Is Remote from the Collecting and Clearing Bank. ............. 33
The " Location," " First Location," or " Item Capture Facility" Must Be a Location Geographically Distant from All Facilities of the Collecting and Clearing Bank..............................................................................33 1. The Preambles of the ' 759 and ' 778 Patents Are Limiting. .................... 35
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2. C.
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The " First Location" Must Be Geographically Distant from All Facilities of the Collecting and Clearing Bank..................................35
Printer Applies Two Distinct Indorsements at the Same Time on the Reverse Side of a Financial Instrument. .............................................................. 36 1. 2. Printer Applies the Separate Indorsements at the Same Time.................37 The Indorsements Are Printed on the Reverse Side of a Financial Instrument. ............................................................................... 38
D.
The CPU Ensures Cooperation Between the Payee and the Collecting and Clearing Bank to Determine Payee' s Timing of Transport and Control Payee Deposits of Funds. ....................................................................... 39 1. The CPU and Communication Link Ensure Cooperation Between the Payee and the Payee' s Collecting and Clearing Bank. ........................................................................................................ 39 CPU and Communication Link Determine the Timing in Advance of the Transport of the Sorted Instruments and Associated Cash Letters...........................................................................40 The CPU Controls When Funds are Credited to the Payee' s Account, Dependent upon Receiving Notification of Settlement. ............................................................................................... 40
2.
3.
E.
" Coordinating the Delivery of the Instruments and Cash Letters into the Payment System" Requires Controlling the Timing of Transport of the Instruments and Cash Letters.........................................................................41 " Imager for Creating a Second Record... " Is a Means-Plus-Function Limitation with No Corresponding Structure. ..................................................... 41 The Method Claim Steps Must Be Performed in Order. ..................................... 42 The " First Location" Reports Information to All of (1) the Bank(s) of First Deposit, (2) the Payee, and (3) the Bank of Subsequent Deposit. .............. 43 " Scanner" Is an Electronic Reader that Reads at Least MICR Data. .................. 44 " Settlement of Accounts" Requires a Transfer of the Amounts Owed. ............... 44 The " Depository Bank" Is Where an Instrument Would Have Been Delivered, Had It Not Been Processed by the Payee...........................................45
F. G. H. I. J. K. V.
CONCLUSION .............................................................................................................. 45
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EXHIBITS
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A. B. C.
Defendants' Disputed Constructions Chart " Agreed Constructions" Chart " Indefinite Means-Plus-Function Terms" Chart
'007 PATENT D. E. F. G. H. I. J. K. L. Paper No. 17 (Dec. 8, 1992 Amendment) Paper No. 9 (Jan. 2, 1992 Amendment) Random House Handbook of Business Terms (1988), definition of " real time" Paper No. 23 (June 29, 1993 Amendment) Paper No. 1 (Aug. 7, 1989 Original Application) Paper No. 12 (May 14, 1992 Amendment) Paper No. 3 (May 13, 1991 Amendment) Paper No. 20 (May 6, 1993 Amendment) P.R. 4-3 Joint Claim Construction Statement
'868 PATENT M. N. O. P. Q. R. S. Merriam Webster' s Collegiate Dictionary (1993), definition of " co-mingle" Paper No. 4 (June 13, 1997 Amendment) The Oxford English Dictionary (1989), definition of " uniquely" Paper No. 2 (Nov. 20, 1996 Office Action) Webster' s Encyclopedic Unabridged Dictionary of the English Language, Random House, Inc. (1994), definition of " predetermine" McGraw-Hill Dictionary of Scientific and Technical Terms (1994), definition of " translate" Webster' s Encyclopedic Unabridged Dictionary of the English Language, Random House, Inc. (1994), definition of " preselect"
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'759 and '778 PATENTS T. U. Paper No. 7 (Parent App. No. 08/156,190, May 5, 1995 Amendment) The Dictionary of Banking (Woelfel 1994), definition of " settlement"
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Altiris, Inc. v. Symantec Corp., 318 F.3d 1363, 1369-70 (Fed. Cir. 2003)............ 43 Andersen Corp. v. Fiber Composites, 474 F.3d 1361, 1365-68 (Fed. Cir. 2007).....3, 18 Bicon, Inc. v. Straumann Co., 441 F.3d 945, 952 (Fed. Cir. 2006).................. 10, 11, 35 Catalina Mktg. Int'l v. Coolsavings.com., Inc., 289 F.3d 801, 809 (Fed. Cir. 2002)... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 24 Combined Systems, Inc. v. Defense Tech. Corp. of Am., 350 F.3d 1207, 1211-13 (Fed. Cir. 2003)... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 43
Demand Mach. Corp. v. Ingram Indus., Inc., 442 F.3d 1331, 1343 (Fed. Cir. 2006)... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... . 10 Eaton Corp. v. Rockwell Int'l Corp., 323 F.3d 1332, 1339 (Fed. Cir. 2003)... ... ... 35 Indiana Mills & Mfg. v. Dorel Indus., 369 F. Supp. 2d 1010, 1014 (S.D. Ind. 2005)... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... . 9 Lockheed Martin Co. v. Space Sys., Inc., 324 F.3d 1308, 1319 (Fed. Cir. 2003)... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 15 Mas-Hamilton Group v. LaGard, Inc., 156 F.3d 1206, 1213-14 (Fed. Cir. 1998)... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 15, 42 M.I.T. v. Abacus Software, 462 F.3d 1344, 1353 (Fed. Cir. 2006)... ... ... ... ... ... ... 41 Med Instrumentation & Diagnostics Corp. v. Elekta AB, 344 F.3d 1205, 1211 (Fed. Cir. 2003)... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... . 14 Nystrom v Trex, 424 F.3d 1136, 1144 (Fed. Cir. 2005)... ... ... ... ... ... ... ... ... ... ... . 4 On Demand Machine Corp., 442 F.3d at 1343... ... ... ... ... ... ... ... ... ... ... ... ... ... .. 10 Phillips v. AWH Corp., 415 F.3d 1303, 1322 (Fed. Cir. 2005)... ... ... ... ... ... ... ... ..7, 18 SanDisk Corp. v. Memorex Prods., Inc., 415 F.3d 1278, 1286 (Fed. Cir. 2005)... ... 5 SmithKline Beecham Corp. v. Apotex Corp., 403 F.3d 1331, 1350-51 (Fed. Cir. 2005)... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .34 Storage Tech. Corp. v. Cisco Sys., Inc., 329 F.3d 823, 831 (Fed. Cir. 2003)... ... ... .10 Tap Pharm. Prods., Inc. v. Owl Pharms., L.L.C.,419 F.3d 1346 (Fed. Cir. 2005)... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .7
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The Huntington Patents claim narrow inventions in three different areas of the banking and financial industries: · the '007 Patent relates to a national clearinghouse association in which participating banks in different cities exchange checks drawn on themselves and on other banks that do not participate in the national clearinghouse. The national clearinghouse electronically monitors the physical transport status of the checks and the amount of the checks in real time using information electronically reported by the participating banks. the '868 Patent relates to a system in which an originating institution electronically sends a single data file containing multiple financial data files intended for multiple receiving institutions (a co-mingled record) to a central translator, which sorts the data by the designated receiving institution and translates each data file from the sending institution' s format into a dissimilar and incompatible format selected by the respective receiving institutions. the '759 and '778 Patents relate to systems in which check payees process, sort, indorse, and prepare cash letters for their own checks (instead of the payee' s depository bank), and submit the checks directly into the check payment system, while transmitting electronic check information to the depository bank in anticipation of settlement or for further processing.
·
·
DataTreasury Corporation' s (" DTC" ) proposed constructions overreach to expand the scope of these inventions beyond what the inventor(s) purportedly invented. Despite DTC' s efforts to convince the Court otherwise, the law is clear--patent claims must be read in the context of the patent. Defendants adhere to this principle, and their constructions are dictated by the language of the respective claims, the patent specifications, and the prosecution histories. Because of the relatively large number of limitations in the asserted claims, Defendants have identified many terms in the Huntington Patents that might be unfamiliar to the jury, confusing to the jury, or affected by the specification or the prosecution history.2 In its Opening Brief, DTC addresses the disputed terms in conclusory fashion, complaining there are too many to give adequate discussion to each. The actual issues for decision, however, are shared among groups of disputed terms and can be properly discussed and decided together in twelve (12) or fewer groups of terms per patent.
2
DTC and Defendants agree on the constructions of many of these terms, which are respectfully submitted for the Court' s approval. See Ex. B (" Agreed Constructions" ). DEFENDANTS' RESPONSIVE CLAIM CONSTRUCTION BRIEF Page 1
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Further, as set forth in Defendants' motions for summary judgment of invalidity3, the majority of the asserted claims of the Huntington Patents are invalid as indefinite because they contain means-plusfunction limitations that lack any corresponding structure.4 If the Court grants those motions, the Court will not have to construe the terms in the invalid claims (all asserted claims of the ' 007 Patent; claims 1, 2, 3, 24, 27, and 48 of the ' 868 Patent; claims 1 and 11 of the ' 759 Patent; and claims 1-6 of the ' 778 Patent). The Huntington Patents, if valid, should be construed to cover the actual (purported) inventions, and nothing else. Accordingly, Defendants respectfully request that the Court adopt
Defendants' proposed constructions for the disputed terms attached as Exhibit A.5 II. DISPUTED TERMS IN THE '007 PATENT The ' 007 Patent relates to a national clearinghouse association composed of selected participating banks in major cities across the nation.6 Each participating bank in the national
clearinghouse is also a member of a local clearinghouse serving that bank' s respective city or locality.7 But not every member of a local clearinghouse participates in the national clearinghouse. In fact, each local clearinghouse includes members that are not participants in the national clearinghouse.8 Each participating bank in the national clearinghouse must agree to accept and process checks drawn on banks within its respective local clearinghouse in addition to checks drawn on itself.9 Thus, a
participant in one city can send checks to a receiving participant in another city that are drawn on the receiving participant and that are drawn on other banks in the receiving participant' s local
See respective Motions for Summary Judgment for Claim Invalidity Based on Indefiniteness of the ' 007 Patent [Docket No. 710], the ' 868 Patent [Docket No. 740], the ' 759 Patent [Docket No. 737], and the ' 778 Patent [Docket No. 734]. 4 See Ex. C chart summarizing the indefinite means-plus-function terms briefed in the motions for summary judgment. For brevity, those terms are not briefed again in this Response, and Defendants incorporate the Motion and supporting briefs by reference. 5 For the Court' s convenience, DTC' s constructions of the disputed terms are presented in Ex. A as well as the citations to DTC' s opening brief where each term is discussed. 6 ' 007 Patent, col. 1:44-49; 2:29-32. 7 ' 007 Patent, col. 1:44-49; 2:68-3:3. 8 ' 007 Patent, col. 1:49-56; 4:25-28. 9 ' 007 Patent, col. 1:49-56; 2:68-3:3. DEFENDANTS' RESPONSIVE CLAIM CONSTRUCTION BRIEF Page 2
3
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clearinghouse (e.g., local banks that are not participants in the national clearinghouse).10 The receiving participant then sorts the received checks for settlement through its local clearinghouse.11 Such local settlement is accomplished before settlement through the national clearinghouse.12 Throughout the process, the national clearinghouse monitors, and can report in real time to each participating bank, the physical sending and receipt of checks by the participants and the dollar amounts of the checks that are sent and received.13 This real-time reporting allows the participating banks to receive " a real time indication of cash needs anticipated for purposes of ... settlement." 14 A. "Pre-Selected Financial Institutions," "Pre-Selected Institutions," and "Participants" Are Financial Institutions that Directly Participate in a Central Check Clearing System.
The terms " pre-selected financial institution," " pre-selected institution," and " participants" should be construed to mean " financial institutions that have been previously chosen to be direct participants in a central check clearing system other than the Federal Reserve System." While DTC recognizes that pre-selected financial institutions are previously chosen, its proposed construction ignores the distinction the ' 007 Patent makes between " participants" or " pre-selected institutions" and non-participant institutions that merely benefit indirectly from the national settlement or " central check clearing" process. DTC' s construction also fails to maintain the sharp distinction the ' 007 Patent makes between the claimed central check clearing system and the Federal Reserve.15 1. Participants and Pre-Selected Institutions Differ from Indirect-Settling Institutions.
The ' 007 Patent distinguishes between two types of financial institutions: " participant" and " non-participant" institutions. " Participant" institutions are those that communicate and settle directly
' 007 Patent, col. 5:17-45; Fig. 1. ' 007 Patent, col. 7:7-10; Fig. 1. 12 ' 007 Patent, col. 3:10-13; 4:30-40; 4:52-54. 13 ' 007 Patent, col. 2:39-42; 3:35-39; 4:4-7; 7:17-21; 7:28-31. 14 ' 007 Patent, col. 7:28-31; see also col. 3:47-54 (explaining that the national clearinghouse computes settlement amounts for transmission to the Federal Reserve, which effects the actual exchange of funds). 15 Where a patent' s specification makes clear that a term is limited to a particular meaning, that limitation should be included in a proper construction of the claim. See Andersen Corp. v. Fiber Composites, 474 F.3d 1361, 1365-68 (Fed. Cir. 2007) (limiting the term " composite composition" to the forms of " a solid pellet or a solid linear extrudate" because the " specification repeatedly states that the steps of linear extrusion or pelletization are not merely embodiments, but are essential features of the claimed composite composition" ).
11 10
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with the central check clearing system.16 " Non-participant" institutions are those that settle only indirectly through the central check clearing system by exchanging and settling with a participant institution via a local clearinghouse.17 Defendants' construction for the terms " pre-selected financial institution," " pre-selected institution," and " participant" clarify that these terms refer to direct-clearing participant institutions. DTC' s construction on the other hand seeks to impermissibly broaden these terms to encompass non-participant institutions whose checks may indirectly pass through the central check clearing system but who are members only of a local clearinghouse.18 The specification supports Defendants' construction. It describes the invention as including an association of selected member (participant) financial institutions,19 and even recites selection criteria for the members (participants).20 The specification also consistently distinguishes between (a)
" participants" or " members" of the " proposed association" and (b) " non-member local clearinghouse banks." 21 The claims themselves use " pre-selected financial institution," " pre-selected institution," or " participant" interchangeably to describe the members (participants) in the central check clearing system, while using " institutions that are not among the number of pre-selected financial institutions" 22 and " different financial institutions in the locality which are not participants in the clearinghouse" 23 to refer to the non-participant institutions. The specification recites an exemplary settlement involving a Los Angeles " participant" and a New York " participant," and describes (1) the institutions that settle with the New York participant through a local clearinghouse as " non-participants," and (2) the checks from those non-participants as
16
See, e.g., ' 007 Patent, col. 5:26-45; 6:25-51; 2:28-32; 1:44-49. ' 007 Patent, col. 1:44-56; 2:68-3:3; 5:26-45; 6:25-51. The " Objects of the Invention" section of the specification explains that " items cleared by the national association include items drawn on local clearinghouse members who do not belong to the national association." Id., col. 1:44-56. 18 When a term is consistently given a particular meaning throughout the specification, the same meaning is carried into the claims and patentee cannot seek to expand that meaning during claim construction. See Nystrom v Trex, 424 F.3d 1136, 1144 (Fed. Cir. 2005) (limiting " board" to " piece of elongated construction materials made from wood cut from a log" based on manner in which patentee consistently used " board" throughout the specification). 19 ' 007 Patent, col. 2:31-32. 20 ' 007 Patent, col. 3:21-26. 21 ' 007 Patent, col. 4:25-28, 41-42, 50. 22 ' 007 Patent, col. 8:42-45. 23 ' 007 Patent, col. 10:26-28.
17
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" non-participants' checks." 24 Additionally, Figure 1 depicts the relationship between the participants, non-participants, and the central control means. Each " participant" communicates directly with the central control means. Institutions that are merely a part of the local clearing association, but not " participants," do not communicate directly with the central check clearing system. The ' 007 Patent further distinguishes between the two types of financial institutions (i.e., participant and nonparticipant) by explaining that all participants in the central check clearing system must agree to follow the by-laws of the association,25 to use the central settlement system,26 and to comply with a long list of actions for clearing a financial transaction.27 Non-participant financial institutions have no such obligations. DTC' s inclusion of " or a local clearinghouse" in its definition of " pre-selected institutions" and " pre-selected financial institutions" ignores the `007 Patent' s distinctions between (a) " members" or " participants" who directly participate in the " national" or central check clearing system and (b) nonmembers or non-participants who may send to or receive from a " participant" checks that will pass through or have passed through the central check clearing system but who have no direct interaction with the central check clearing system. Similarly, DTC' s extension of " participants" to include all members of either the central clearinghouse association or a local clearinghouse ignores this distinction. The patentee relied on these distinctions during prosecution.28 DTC cannot now seek a construction contrary to this distinction.29
See ' 007 Patent, col. 4:41-43; 6:5-9, 25-51; see also Fig. 1. ' 007 Patent, col. 3:63-65; 4:41-43. 26 ' 007 Patent, col. 3:5-7. 27 The actions include reporting to the central control means for the central check clearing system the value and transit status of items to be cleared (' 007 Patent, col. 2:37-39), and guaranteeing minimum dollar amounts and transaction volumes (' 007 Patent, col. 3:21-23). 28 See Ex. D, Paper No. 17 (Dec. 8, 1992 Amendment) at 9 (describing the rolls of non-member and member institutions in check clearing process). 29 SanDisk Corp. v. Memorex Prods., Inc., 415 F.3d 1278, 1286 (Fed. Cir. 2005) (" When the patentee makes clear and unmistakable prosecution arguments limiting the meaning of a claim term in order to overcome a rejection, the courts limit the relevant claim term to exclude the disclaimed matter." ).
25
24
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The plain language meaning in light of the specification makes clear that " pre-selected financial institution," " pre-selected institution," and " participant" can only mean direct-clearing participants of the central check clearing system. Defendants' construction clarifies this point. 2. The Central Check Clearing System Is Distinct from the Federal Reserve System.
The ' 007 Patent makes clear that the central check clearing system is distinct from the Federal Reserve System. Specifically, as part of a discussion of the purported advantages of the ' 007 Patent' s central check clearing system, the ' 007 Patent recites that " the Federal Reserve System typically is not as quick, and alternative correspondent systems are subject to higher fees." 30 In addition, the
specification provides that " [a] clearing system is maintained by a central control means in which debits and credits owing from one member to another are calculated without regard to Federal Reserve System district settlements...." 31 In the January 2, 1992 Amendment, the applicants advocated that Lines 11-15 referring to " without regard to Federal Reserve System district settlements," represent one facet of the improvement of the invention by which prompt cash settlements of check accounts may be achieved by banks independently of the slower Federal Reserve process. The reference of the independence of the claimed system to the Federal Reserve is clearly understood by one skilled in the art.32 Thus, the central check clearing system described in and claimed by the `007 Patent is not and cannot be construed to include the Federal Reserve System. B. " Real Time," " in Real Time," and " Real Time in Correspondence with the Occurrence of an Event" Requires Instantaneousness.
" Real time" in the context of computer systems means " instantaneous." 33 This is exactly how the ' 007 Patent uses the term and how the Court should construe it. DTC' s proposed construction (i.e., " the actual time during which something takes place" ) ignores the term' s context, offering instead an
' 007 Patent, col. 7:32-34. ' 007 Patent col. 2:32-37. 32 See Ex. E, Paper No. 9 (Jan. 2, 1992 Amendment) at 3; see also Ex. I, Paper No. 12 (May 14, 1992 Amendment) at 8 (" The Federal Reserve settlement may be characterized as the `background' environment from which the claimed invention is distinguished." ). 33 See Ex. F, " Real time," Random House Handbook of Business Terms (1988).
31
30
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ambiguous definition handpicked from an extrinsic source with no explanation for why the particular definition is relevant.34 Term
" real time" (claim 1) " in real time" (claim 1) " real time in correspondence with the occurrence of an event" (claim 1) Instantaneous in correspondence with the occurrence of the physical sending and receiving of the financial instruments.
Defendants' Proposed Construction
Instantaneous, instantaneously.
The ' 007 Patent specification makes plain that " real time" means instantaneous " [t]he status of participant' s accounts in the national clearinghouse association is recorded and displayed instantaneously as soon as information is received by the central control means." 35 This is wholly consistent with the ordinary meaning of " real time" in the proper context of computer systems in a business environment. For example, The Random House Handbook of Business Terms defines " real time" processing as " immediate and instantaneous processing of data entered in a computer, such that the operator need not wait until a batch is collected." 36 The prosecution history also confirms the instantaneous nature of the " real time" claim limitation. For example, during prosecution, the applicants amended the claims to include the
limitation that reporting occurs " in real time." In distinguishing the prior art, the applicants argued: In the invention of the amended claims, the fluidity of a real time mechanism is evident.... [O]nce data is entered, the information is there for all participants to see.... The mechanism is a continuous and active process ... as the participants' settlement obligations are determined, they are available for continuous monitoring by the participants.37 The applicants thus describe the real time processing as a continuous and active process that presents data as it is received from participants for the other participants to see. By relying upon this amendment and argument to gain allowance from the examiner, the applicants confirmed the intended
Claim terms cannot be defined by an ordinary meaning isolated from the proper context. Tap Pharm. Prods., Inc. v. Owl Pharms., L.L.C., 419 F.3d 1346, 1354 (Fed. Cir. 2005). Nor can a patentee pick and choose from a variety of accepted definitions without regard to the subject matter and context of the term. See Phillips v. AWH Corp., 415 F.3d 1303, 1322 (Fed. Cir. 2005) (en banc) (quoting Renishaw PLC v. Marposs Societa' per Azioni, 158 F.3d 1243, 1250 (Fed. Cir. 1998). 35 ' 007 Patent, col. 4:4-7 (emphasis added). 36 See Ex. F, " real time," Random House Handbook of Business Terms (1988). 37 See Ex. G, Paper No. 23 (June 29, 1993 Amendment) at 8-9. DEFENDANTS' RESPONSIVE CLAIM CONSTRUCTION BRIEF Page 7
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meaning of " real time" (i.e., instantaneous) and bound the claim limitation to this meaning.38 Thus, Defendants' proposed construction is consistent with the patent' s specification, the plain meaning in the relevant field of computer systems in a business setting, and the prosecution history. By contrast, DTC' s proposed construction introduces ambiguity and seeks to impermissibly broaden the term by ignoring its proper context and the basis upon which allowance was obtained. C. " Settlement," " Regular Periodic Settlement," and " Final Settlement" Require a Calculation and Transfer of Amounts Owed and Payable.
Defendants' construction of " settlement," " regular periodic settlement," and " final settlement" (collectively, " settlement" ) reflects the specification' s requirement of an actual transfer of funds. DTC' s construction provides no guidance to the meaning of " settlement" or for determining whether or when an accused system actually performs a " settlement" because it uses the word " settlement" as part of its proposed construction. Term
" settlement" (claim 1) " regular periodic settlement" (claim 1) " final settlement" (claim 4)
Defendants' Proposed Construction
A calculation and transfer of amounts owed and payable between financial institutions. A final calculation and transfer of amounts owed to and payable between direct participants in the central check clearing system occurring at pre-determined time intervals.
The specification is the " single best guide to the meaning of a disputed term." 39 Here, the specification clearly establishes that " settlement" requires an actual transfer of funds. A mere
calculation of transfer amounts does not constitute " settlement" in the ' 007 Patent because settlement is only completed once the participant' s accounts are actually credited or debited: " In the United States banking system, national settlement would be completed by debit and credit of the participant's accounts... ."40 The specification further provides that " [t]he Association will also establish a
See SanDisk, 415 F.3d at 1286 (" When the patentee makes clear and unmistakable prosecution arguments limiting the meaning of a claim term in order to overcome a rejection, the courts limit the relevant claim term to exclude the disclaimed matter." ). 39 Phillips, 415 F.3d at 1315. 40 ' 007 Patent, col. 2: 12-16 (emphasis added). DEFENDANTS' RESPONSIVE CLAIM CONSTRUCTION BRIEF Page 8
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procedure in the event that a participant is unable to settle." 41 If " settlement" merely required a calculation of the amount to be transferred, this portion of the specification would not make sense42 since there would never be an occasion when a participant would be unable to merely perform a calculation. D. Settlement Among the Direct Participants Occurs After Regular, Prescheduled Local Settlement Between the Participants and the Non-Participants.
The terms " a final calculation of the debits and credits ... does not occur until predetermined local settlements ... " in claim 1 and " the occurrence of final settlement ... until after ... certain predetermined local settlements ... are completed" in claim 4 set out the nature, and more importantly, the timing of settlements in the claimed check clearing system. Surprisingly, DTC' s construction ignores altogether the timing aspect of these limitations. By focusing only on individual components of these phrases, DTC' s construction fails to address the primary issue to be clarified--the nature and timing of the participant' s " local settlements" with non-participant institutions with respect to the " settlement among the [participant] institutions." Term
" a final calculation of the debits and credits . . ., comprising the occurrence of the regular periodic settlement among the institutions, does not occur until pre-determined local settlements by the institutions in the pre-selected sites with institutions that are not among the number of pre-selected financial institutions, are completed" (claim 1) " [determining] the occurrence of a final settlement by the clearinghouse participants at a pre-determined time until after a time that certain pre-determined local settlements in the localities, by the participants in the localities, are completed" (claim 4)
Defendants' Proposed Construction
Settlement among the direct participants in the central check clearing system occurs after regular, prescheduled settlements in each geographical region between the direct participants in that region and institutions in that region that do not directly participate in the central check clearing system.
The two types of settlements described in the ' 007 Patent are those occurring between two participants and those occurring between a participant and a non-participant. The participant/non41 42
' 007 Patent, col. 4:64-65 (emphasis added). Claim term should not be construed in a manner that would be nonsensical in light of patent disclosure or specification. See Indiana Mills & Mfg. v. Dorel Indus., 369 F. Supp. 2d 1010, 1014 (S.D. Ind. 2005). DEFENDANTS' RESPONSIVE CLAIM CONSTRUCTION BRIEF Page 9
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participant settlements occur through local clearinghouses, while the participant/participant settlements occur through the central clearing system. The claim limitations above impart two main requirements for the nature and timing of the settlements. First, local settlements are regular and prescheduled, and they occur within a particular geographical region or locality between a direct participant (on behalf of another direct participant) and a non-participant financial institution. Second, the local settlements occur before the settlements between participant institutions. Both of these requirements follow from the plain meaning of the terms and are supported by the specification' s description of the settlement process: " On a daily basis, local clearinghouse settlements will occur before settlement by the national clearing association." 43 A proper construction of these claim limitations should reflect the overall timing aspect of these limitations and clarify the regular prescheduled nature of the settlements as required by the ordinary meaning of the claim language and the clear language of the specification quoted above. E. The Preambles of Claims 1 and 4 Are Limiting.
A " preamble serves to focus the reader on the invention that is being claimed." 44 The Federal Circuit has stated " whether to treat a preamble as a claim limitation is determined on the facts of each case in light of the claim as a whole and the invention described in the patent." 45 A claim preamble is limiting if it " recites essential structure that is important to the invention or necessary to give meaning to the claim."
46
Additionally, a preamble is treated as a claim limitation if it provides the antecedent
basis of limitations in the body of the claim.47 1. The Preambles of Claims 1 and 4 Recite Essential Structure and Provide Antecedent Basis for Limitations in the Bodies of the Claims.
' 007 Patent, col. 4:52-54; see also col. 5:17-18 (" In any particular locality, the participating member would first effect local settlement." ); 3:10-13; 4:30-37. 44 On Demand Mach. Corp. v. Ingram Indus., Inc., 442 F.3d 1331, 1343 (Fed. Cir. 2006). 45 Storage Tech. Corp. v. Cisco Sys., Inc., 329 F.3d 823, 831 (Fed. Cir. 2003). 46 Bicon, Inc. v. Straumann Co., 441 F.3d 945, 952 (Fed. Cir. 2006); see also On Demand Machine Corp., 442 F.3d at 1343 (finding a preamble limiting where it provided " the framework of the invention" ). 47 See Bicon, 441 F.3d at 952-53. DEFENDANTS' RESPONSIVE CLAIM CONSTRUCTION BRIEF Page 10
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The preambles of claims 1 and 4 introduce essential terms used throughout the claims. For claim 1, the preamble introduces " financial instruments" and " pre-selected financial institutions," and in claim 4, the preamble introduces " financial institution participant." These terms provide the
antecedent basis for terms appearing later in the claims.48 Moreover, the preambles of claims 1 and 4 provide a framework of the invention as it is described in the specification, i.e., pre-selected financial institutions each at various pre-selected sites or localities participate in a financial clearinghouse for physically exchanging financial instruments and effecting the regular periodic settlement of these instruments. 2. A " Pre-Selected Site" Is Limiting and Is a Specific and Exclusive Geographic Region of a Previously Chosen Financial Institution.
In claim 1, the term " pre-selected financial institution" is defined in the preamble as located at a " pre-selected site." DTC is clear that " pre-selected financial institution" is a limitation that needs construction, but yet takes the position that " pre-selected site," which modifies " pre-selected financial institution," does not act as a limitation. DTC' s position impermissibly renders " pre-selected site" as superfluous and " renders the scope of the patent ambiguous" by causing readers of the patent " to guess about which claim language the drafter deems necessary to his claimed invention and which language is merely superfluous, nonlimiting elaboration." 49 Moreover, the term " pre-selected site" is limiting because it originally appeared in the body of the claim and the applicant used this term to distinguish the prior art.50 Thus, " pre-selected site" is a limitation and requires construction. A " pre-selected site" for a pre-selected financial institution is more than a processing location of a financial institution, because the site must be selected based on a specific and exclusive geographic region. The ' 007 Patent
49
DTC evidently agrees that these terms are limiting, as it has provided a construction for these three terms. Bicon, 441 F.3d at 950-51. 50 See Ex. H, Paper No. 1 (Aug. 7, 1989 Original Application) at 22 (showing claim 1, as originally filed, required " an association of selected member financial institutions in predetermined localities." ); In re Cruciferous Sprout Litig., 301 F.3d at 1347-48 (Fed. Cir. 2002) (stating that preamble was a limitation because arguments made during reexamination " show[ed] a clear reliance by the patentee on the preamble to persuade the Patent Office that the claimed invention [was] not anticipated by the prior art" ). DEFENDANTS' RESPONSIVE CLAIM CONSTRUCTION BRIEF Page 11
48
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specification describes that participant institutions in major cities across the country settle with each other through the central check clearing system and settle with local non-participant institutions in their respective regions through local clearinghouses.51 Moreover, the specification also states that the preselected sites are in specific geographic regions distinct from the Federal Reserve districts.52 And during prosecution the applicant emphasized that the pre-selected sites in geographic regions are different than the Federal Reserve districts.53 Accordingly, " pre-selected site" should be construed as " the specific and exclusive geographical region of a financial institution that has been previously chosen to be a direct participant in a central check clearing system other than the Federal Reserve System." F. " Transit Status of the Financial Instruments to be Cleared" Provides Information About Whether Instruments Are Physically Sent and Received.
The primary difference between DTC' s and the Defendants' construction of this term from claim 4 is that DTC' s construction does not specifically indicate that this term addresses the physical sending and receiving of the instruments. The intrinsic evidence confirms that the instruments are physically sent and received. First, the parties have agreed that the term " financial instrument" is a physical document.54 Moreover, DTC contends that the structure corresponding to the " means ... for sending and receiving financial instruments to be cleared" is " air or ground transportation and a pre-selected institution' s physical facility." 55 Thus, the financial instruments are physical items and the means used to transport
See, e.g.,' 007 Patent, col. 1:44-49 (" It is an object of this invention to provide means whereby an association composed of participating banks in major cities is formed, and a national-clearinghouse system is maintained . . . . At least one institutional participant in each city would have access to the local clearinghouse." ). 52 See ' 007 Patent, col. 1:19-22 (" The system and method is independent of conventional central bank district geographic and institutional boundaries, and time zones." ); see also ' 007 Patent, col. 2:63-66 (" The clearinghouse is independent of conventional central bank district geographic and institutional boundaries, such as Federal Reserve districts, as well as time zones." ). 53 See Ex. I, Paper No. 12 (May 14, 1992 Amendment) at 8 (" Claim 1 is clarified to state that the settlements effected among the institutions in the pre-selected sites are made separate from the conventional Federal Reserve settlement in a locality and, thus, reference to the Federal Reserve is deleted as necessary." ). 54 See Ex. B (" Agreed Constructions" ) (DTC and the Defendants have agreed that the term " financial instrument" should be construed as " A document in writing by which some financial obligation by one person to pay another is represented, such as a check, paper, cash items, money orders, share orders, drafts, notes, bonds, coupons." ). 55 (emphasis added). DEFENDANTS' RESPONSIVE CLAIM CONSTRUCTION BRIEF Page 12
51
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the financial instruments are physical (i.e., air and ground transportation). Therefore, it follows that transit status of the physical financial instruments must be " information about whether the instruments have been physically sent and received." Second, the intrinsic evidence confirms the Defendants' construction. For example, the
specification discloses that when a participant physically sends financial instruments to a destination or physically receives financial instruments from a destination, the physical event of sending or receiving the instruments is electronically transmitted by the participant to the central control means.56 Accordingly, this limitation should be construed as " information about whether the instruments have been physically sent and received." G. A " Central Processing Unit" Connects All Originating and Receiving Institutions.
As shown in Figure 3 of the December 8, 1992 Amendment57; the central processing unit58 acts as a " hub about which clearinghouse operations revolve." 59 The financial institutions are " interrelated" by this central processing unit in order to " monitor[] transit and financial data." 60 Thus, the central processing unit is more than a conventional programmable computer, because it must connect to all institutions for the transmission of data files. Accordingly, a " central processing unit" should be construed as " a single central processing unit, connected to all originating and receiving institutions and through which all data files are transmitted." H. " Means for Receiving Including Means for Physically Accepting the Instruments Transported from Other Institutions" Has No Corresponding Structure.
The Defendants and DTC agree that this term is a means-plus-function term governed by 35 U.S.C. § 112(6) and that the function is " physically accepting the instruments transported from other
' 007 Patent, col. 2:1-7; 2:31-50; 5:61-66. See Ex. D, Paper No. 17 (Dec. 8, 1992 Amendment) at 9. 58 Prior to amendment, the " central processing unit" was recited as a " central control means." 59 See Ex. J, Paper No. 3 (May 13, 1991 Amendment) at 2; Ex. K, Paper No. 20 (May 6, 1993 Amendment) at 8 (" The CPU is a master CPU connected to each institution. Each institution may use a CPU in terminal mode connected to the master CPU, but it is the single master CPU that controls the mechanism." ). 60 See Ex. I, Paper No. 12 (May 14, 1992 Amendment) at 9; see also Fig. 1 (" receipt and transmission of monitoring data" ); Ex. K, Paper No. 20 (May 6, 1993 Amendment) at 12 (based on the information reported to and calculated by the master CPU, the institutions can monitor their need for funds, and prepare for these fund needs at the settlement, as checks are sent and data transmitted).
57
56
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When employing means-plus-function form, the patentee must " clearly link or DTC states that the corresponding structure for this
associate structure" with the stated function.62
term is " a pre-selected institution' s physical facility and its relationship with air and ground transportation." However, the specification makes no mention of an institution' s physical facility, nor does the specification link such a physical facility to the function of physically accepting the instruments.63 Thus, the ' 007 Patent does not disclose structure sufficient to perform the recited
function and is, therefore, indefinite under § 112(2). I. The " Means at an Institution by Which Instruments Are Sorted by the Site Locality [and Sent]..." Is a Sorter and Air and Ground Transportation.
The Defendants and DTC agree this term is a means-plus-function term governed by § 112(6) and generally agree that the function is " sorting instruments by site locality of each other of the preselected institutions and in which the instruments sorted by site are sent by site sort category to institutions at sites within the site sort categories." 64 The structure provided by the specification for performing this function is a sorter (for sorting) and air and ground transportation (for sending).65 J. The " Means at Each of the Participants (1) for Sending and Receiving Financial Instruments...(2) for Sending and Receiving in Real Time..., and (3) for Addressing the Central Processing Unit..." Has No Corresponding Structure for Some of the Recited Functions.
The Defendants and DTC agree this term is a means-plus-function term governed by § 112(6) and agree it includes three functions. The parties primarily disagree on both the function and
associated structure for the third function of this term, which recites " addressing the central processing unit by which a participant may determine in real time the information received by the processing unit with respect to that participant' s relative credit and debit obligations with respect to other institutions
DTC changed its position on the corresponding function from the Joint Statement to now agree with the Defendants' function. Compare Ex. L, P.R. 4-3 Joint Claim Construction Statement at B3-B4, no. 5 with DTC Br. at 5. 62 Med Instrumentation & Diagnostics Corp. v. Elekta AB, 344 F.3d 1205, 1211 (Fed. Cir. 2003). 63 The portions of the ' 007 Patent specification cited by DTC in support of its construction make absolutely no mention of a physical facility. See ' 007 Patent, Fig. 1; col. 1:66-2:1; 4:15-20; 5:61-63. 64 DTC splits the recited function into two distinct functions: " sorting by site locality of each other of the pre-selected institutions" and " sending the instruments sorted by site category to institutions at sites within the site sort categories." Plaintiff' s Opening Brief on Claim Construction, p. 9, May 30, 2007. 65 See ' 007 Patent, col. 1:65-68; 4:41-49; 7:1-13. DEFENDANTS' RESPONSIVE CLAIM CONSTRUCTION BRIEF Page 14
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arising from the instruments that are reported to be sent and received." DTC impermissibly truncates the function after " processing unit." 66 DTC states that the corresponding structure for this function is " electronic communication links, which may include conventional telephone links by modem connections and the like." However, the specification does not even link these electronic
communication links with DTC' s truncated function because it fails to disclose that these electronic communication links can " address[] the central processing unit." In essence, DTC hopes to delete the word " means" from this and other similar claim limitations with the hopes of freeing it (and them) from the requirements that " means plus function" have. This, of course, DTC cannot do. Thus, the ' 007 Patent does not disclose structure sufficient to perform the recited function and is, therefore, indefinite under § 112(2). K. " A Time Control for Determining the Time of Physical Transport ... " Is a MeansPlus-Function Limitation with No Corresponding Structure.
This term should be construed as a means-plus-function term under § 112(6) despite not using the term " means." DTC contends that this term should not be construed under § 112(6); however, a limitation should be construed as a means-plus-function-limitation when " [t]he limitation is drafted as a function to be performed rather than definite structure," and the " limitation' s language does not provide any structure." 67 Here, the phrase " time control" simply characterizes the function of
" determining the time of physical transport of financial instruments ... " without indicating any type of structure for actually doing so. Moreover, DTC has provided no evidence that " time control" indicates known structure to one skilled in the art, nor does the specification provide a special meaning for this term indicating structure. In fact, the term does not appear a single time in the specification. Claim language that characterizes the function to be performed without indicating structure " is precisely what
See Lockheed Martin Co. v. Space Sys., Inc., 324 F.3d 1308, 1319 (Fed. Cir. 2003)(holding that the district court erred by improperly broadening the scope of the claimed function by " reading out" limitations contained in the claim language). 67 Mas-Hamilton Group v. LaGard, Inc., 156 F.3d 1206, 1213-14 (Fed. Cir. 1998) (interpreting " lever moving element" and " movable link member" under § 112(6)). DEFENDANTS' RESPONSIVE CLAIM CONSTRUCTION BRIEF Page 15
66
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was intended by the statutory phrase in § 112(6) requiring that means-plus-function limitations provide a specified function." 68 Accordingly, this term should be construed under § 112(6), with the function of " determining the time of physical transport of financial instruments between and among the participants according to a predetermined time cycle, and for determining the occurrence of a final settlement by the clearinghouse participants at a pre-determined time until after a time that certain pre-determined local settlements in the localities, by the participants in the localities, are completed." Since § 112(6) applies to the " time control" claim term, the next step is to examine the specification to identify the structure corresponding to the claimed function. While the specification generally discloses that the function of determining the time of physical transport of financial instruments between and among the participants and of determining the occurrence of a final settlement is performed, the specification never discloses actual structure used to make these determinations. DTC presumably agrees that no corresponding structure is disclosed as it has not asserted any in the event the Court agrees this term should be construed under § 112(6). III. DISPUTED TERMS IN THE '868 PATENT The ' 868 Patent describes another type of centralized system for exchanging financial instrument information between multiple financial institutions.69 In contrast to the ' 007 Patent,
however, the primary purpose of the centralized system described in the ' 868 Patent is to translate financial instrument information between different financial data formats, independently of clearinghouses and other settlement mechanisms.70 Financial institutions can use a variety of different file formats for electronically exchanging financial instrument information, such as Electronic Check Presentment (ECP) format, Automated Clearinghouse (ACH) format, and Electronic Cash Letter (ECL) format.71 According to the ' 868 Patent specification, prior art techniques required that, if the
68
69
Id. at 1215. ' 868 Patent, col. 2:18-20; 3:48-53; 4:38-40. 70 ' 868 Patent, col. 4:30-36; 4:45-49. 71 ' 868 Patent, col. 5:49-54. DEFENDANTS' RESPONSIVE CLAIM CONSTRUCTION BRIEF Page 16
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format used by a receiving institution is incompatible with the format used by the sending institution, either the sending or receiving institution was required to invest in dedicated software to translate the financial file format used by the sender into the format used by the recipient.72 The purported invention described in the ' 868 Patent provides for a central electronic payment interchange concentrator (EPIC) that translates electronic financial information originating in a variety of industry data file formats from multiple sending institutions into formats selected by the respective receiving institutions.73 This centralized translator allows a sending institution to group financial instrument information addressed to multiple receiving institutions into a single file, i.e., " co-mingled" 74 data records.75 The translator translates each data record from the format used by the sending institution into the formats selected by the designated receiving institutions and stores the translated data in memory locations that are only accessible by the designated receiving institutions for subsequent retrieval.76 A. " Co-mingled Records" Are Intended for Multiple Institutions.
The specification and prosecution history confirm that " co-mingled records," " co-mingled financial instrument information," " co-mingled financial instrument information intended for multiple receiving institutions," " co-mingled information about financial instruments," and " co-mingled financial instrument information addressed to multiple receiving institutions," in claims 1, 24, 45, and 61 (collectively, " co-mingled records" ) should be construed to mean " multiple records in a single electronic data file having information from multiple financial instruments intended for multiple recipients." 77 Contrary to the prosecution history, however, DTC' s proposed construction for " comingled" would allow this term to encompass information intended for " one or more of a multiple of
' 868 Patent, col. 1:53-63. ' 868 Patent, col. 4:50-60; 4:38-43. 74 As discussed below, " co-mingled records" are multiple records in a single electronic data file having information from multiple financial instruments intended for multiple recipients. 75 ' 868 Patent, col. 3:58-61; 6:58-61. 76 ' 868 Patent, col. 3:61-4:5; 6:61-7:18. 77 See ' 868 Patent, col. 3:58-61; 6:58-61; 7:1-3; 8:59-65. See also Ex. M, Merriam Webster' s Collegiate Dictionary (1993), definition of " co-mingle" is " to blend thoroughly into a harmonious whole."
73
72
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receiving institutions... ." 78 The applicant made explicitly clear during prosecution that " co-mingled records" are multiple records in a single electronic data file having information intended for multiple recipients. Specifically, during prosecution of the ' 868 Patent, the applicant argued that the prior art describes sending information to only one receiving institution and that, therefore, sending information intended for multiple receiving institutions distinguishes the claimed invention.79 In distinguishing the prior art cited by the Examiner, the applicant stated: [The cited prior art references] do not disclose a capability of receiving a data file containing co-mingled information, some portion of which is intended for one recipient and other portions of which are intended for other recipients that require differing data formats for the file information. The cited references do not separate the individual transaction records in one data file into different portions according to recipient, nor do they disclose the transmission of less than all of a sent data file to a recipient in a system where the data is translated according to the requirements of the recipient.80 The applicant further argued that " EPIC accomplishes that which has not previously been done before the exchange of data files of co-mingled individual transaction records where file format requirements of the sender and multiple recipients are different." 81 The " co-mingled records"
therefore must be limited to instruments and records that are intended for multiple recipients; it cannot encompass information intended for only one recipient.82
See DTC' s construction proposing that " co-mingled" mean " combined financial instrument information intended for one or more of a multiple of receiving institutions or settlement mechanisms." (emphasis added). 79 See Ex. N, Paper No. 4 (June 13, 1997 Amendment) at 25-27, 33 (" The amended independent claims 1 and 61 relate to apparatus, a means and processes for receiving a data file that comprises several portions, or bundles, of financial instrument information, one or more of which portions or bundles are intended for one recipient and others of which are intended for other recipients... In this manner, the present invention permits the originating institutions to comingle financial instrument information intended for multiple recipients in a singl
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