Intellectual Ventures I LLC et al v. Sally Beauty Holdings, Inc. et al

Filing 71

MEMORANDUM OPINION AND ORDER. Signed by Judge Rodney Gilstrap on 7/12/2016. (nkl, )

THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
INTELLECTUAL VENTURES I LLC,
et al.,
Plaintiffs,
v.
SALLY BEAUTY HOLDINGS, INC.,
et al.,
Defendants.

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CASE NO. 2:15-CV-1414-JRG

MEMORANDUM OPINION AND ORDER
Before the Court are Plaintiffs Intellectual Ventures I LLC and Intellectual Ventures II
LLC’s Opening Claim Construction Brief (Dkt. No. 58), Defendants’ response (Dkt. No. 61),
and Plaintiffs’ reply (Dkt. No. 62).
The Court held a claim construction hearing on July 1, 2016.

Table of Contents
I. BACKGROUND ....................................................................................................................... 2
II. LEGAL PRINCIPLES ........................................................................................................... 2
III. CONSTRUCTION OF AGREED TERMS ........................................................................ 6
IV. CONSTRUCTION OF DISPUTED TERMS ..................................................................... 7
A. “transaction information”...................................................................................................... 7
B. “nonpredictable bar code” ................................................................................................... 10
C. “private transactional data” ................................................................................................. 15
D. “spending habit data” and “promotion data” ...................................................................... 19
V. CONCLUSION...................................................................................................................... 19

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I. BACKGROUND
Plaintiffs filed suit alleging infringement of United States Patents No. 5,969,324 (“the
’324 Patent”), RE43,715 (“the ’715 Patent”), and 6,633,900. (Dkt. Nos. 1-1, 1-2 & 1-3.) Only
the ’324 Patent and the ’715 Patent are at issue in the present claim construction proceedings.
The ’324 Patent, titled “Accounting Methods and Systems Using Transaction Information
Associated with a Nonpredictable Bar Code,” issued on October 19, 1999, and bears a filing date
of April 10, 1997. The Abstract states:
An accounting system includes a point of sale terminal (20) to print a transaction
receipt (26) having a nonpredictable bar code (36) and human-readable
transaction information (34) based upon the transaction data. The point of sale
terminal (20) communicates the transaction information to a transaction
information system. The transaction information is downloaded from the
transaction information system by reading the nonpredictable bar code (36) with a
data reader (54).
The ’715 Patent, titled “System and Method for Integrating Public and Private Data,”
issued on October 2, 2012, and bears an earliest priority date of June 28, 2000. The Abstract
states:
A system and method for allowing an Internet user to create a web page which
may simultaneously display public and private data as integrated data on one
digital screen or other network interface device. Integrated data may derive from
at least one internal content provider, but may also include data from one or more
external content providers. The invention also allows an internal content provider
to create a personal profile of a user, based on proprietary data stores of the
internal content provider and/or on the user’s choices of data for viewing on a
web page. Finally, the invention allows an internal content provider to use the
personal profile to personalize the user’s experience on the provider’s web site.
II. LEGAL PRINCIPLES
It is understood that “[a] claim in a patent provides the metes and bounds of the right
which the patent confers on the patentee to exclude others from making, using or selling the
protected invention.” Burke, Inc. v. Bruno Indep. Living Aids, Inc., 183 F.3d 1334, 1340 (Fed.

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Cir. 1999). Claim construction is clearly an issue of law for the court to decide. Markman v.
Westview Instruments, Inc., 52 F.3d 967, 970-71 (Fed. Cir. 1995) (en banc), aff’d, 517 U.S. 370
(1996).
“In some cases, however, the district court will need to look beyond the patent’s intrinsic
evidence and to consult extrinsic evidence in order to understand, for example, the background
science or the meaning of a term in the relevant art during the relevant time period.” Teva
Pharms. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831, 841 (2015) (citation omitted). “In cases
where those subsidiary facts are in dispute, courts will need to make subsidiary factual findings
about that extrinsic evidence. These are the ‘evidentiary underpinnings’ of claim construction
that we discussed in Markman, and this subsidiary factfinding must be reviewed for clear error
on appeal.” Id. (citing 517 U.S. 370).
To ascertain the meaning of claims, courts look to three primary sources: the claims, the
specification, and the prosecution history. Markman, 52 F.3d at 979. The specification must
contain a written description of the invention that enables one of ordinary skill in the art to make
and use the invention. Id. A patent’s claims must be read in view of the specification, of which
they are a part. Id. For claim construction purposes, the description may act as a sort of
dictionary, which explains the invention and may define terms used in the claims. Id. “One
purpose for examining the specification is to determine if the patentee has limited the scope of
the claims.” Watts v. XL Sys., Inc., 232 F.3d 877, 882 (Fed. Cir. 2000).
Nonetheless, it is the function of the claims, not the specification, to set forth the limits of
the patentee’s invention. Otherwise, there would be no need for claims. SRI Int’l v. Matsushita
Elec. Corp., 775 F.2d 1107, 1121 (Fed. Cir. 1985) (en banc). The patentee is free to be his own
lexicographer, but any special definition given to a word must be clearly set forth in the

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specification. Intellicall, Inc. v. Phonometrics, Inc., 952 F.2d 1384, 1388 (Fed. Cir. 1992).
Although the specification may indicate that certain embodiments are preferred, particular
embodiments appearing in the specification will not be read into the claims when the claim
language is broader than the embodiments. Electro Med. Sys., S.A. v. Cooper Life Sciences, Inc.,
34 F.3d 1048, 1054 (Fed. Cir. 1994).
This Court’s claim construction analysis is substantially guided by the Federal Circuit’s
decision in Phillips v. AWH Corporation, 415 F.3d 1303 (Fed. Cir. 2005) (en banc). In Phillips,
the court set forth several guideposts that courts should follow when construing claims. In
particular, the court reiterated that “the claims of a patent define the invention to which the
patentee is entitled the right to exclude.” 415 F.3d at 1312 (quoting Innova/Pure Water, Inc. v.
Safari Water Filtration Sys., Inc., 381 F.3d 1111, 1115 (Fed. Cir. 2004)). To that end, the words
used in a claim are generally given their ordinary and customary meaning. Id. The ordinary and
customary meaning of a claim term “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 1313. This principle of patent law flows naturally from the
recognition that inventors are usually persons who are skilled in the field of the invention and
that patents are addressed to, and intended to be read by, others skilled in the particular art. Id.
Despite the importance of claim terms, Phillips made clear that “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.” Id. Although the claims themselves may provide guidance as to the meaning of
particular terms, those terms are part of “a fully integrated written instrument.” Id. at 1315
(quoting Markman, 52 F.3d at 978). Thus, the Phillips court emphasized the specification as

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being the primary basis for construing the claims. Id. at 1314-17. As the Supreme Court stated
long ago, “in case of doubt or ambiguity it is proper in all cases to refer back to the descriptive
portions of the specification to aid in solving the doubt or in ascertaining the true intent and
meaning of the language employed in the claims.” Bates v. Coe, 98 U.S. 31, 38 (1878). In
addressing the role of the specification, the Phillips court quoted with approval its earlier
observations from Renishaw PLC v. Marposs Societa’ per Azioni, 158 F.3d 1243, 1250 (Fed. Cir.
1998):
Ultimately, the interpretation to be given a term can only be determined and
confirmed with a full understanding of what the inventors actually invented and
intended to envelop with the claim. 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.
Phillips, 415 F.3d at 1316. Consequently, Phillips emphasized the important role the
specification plays in the claim construction process.
The prosecution history also continues to play an important role in claim interpretation.
Like the specification, the prosecution history helps to demonstrate how the inventor and the
United States Patent and Trademark Office (“PTO”) understood the patent. Id. at 1317. Because
the file history, however, “represents an ongoing negotiation between the PTO and the
applicant,” it may lack the clarity of the specification and thus be less useful in claim
construction proceedings. Id. 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.; see
Microsoft Corp. v. Multi-Tech Sys., Inc., 357 F.3d 1340, 1350 (Fed. Cir. 2004) (noting that “a
patentee’s statements during prosecution, whether relied on by the examiner or not, are relevant
to claim interpretation”).

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Phillips rejected any claim construction approach that sacrificed the intrinsic record in
favor of extrinsic evidence, such as dictionary definitions or expert testimony. The en banc court
condemned the suggestion made by Texas Digital Systems, Inc. v. Telegenix, Inc., 308 F.3d 1193
(Fed. Cir. 2002), that a court should discern the ordinary meaning of the claim terms (through
dictionaries or otherwise) before resorting to the specification for certain limited purposes.
Phillips, 415 F.3d at 1319-24. According to Phillips, reliance on dictionary definitions at the
expense of the specification had the effect of “focus[ing] the inquiry on the abstract meaning of
words rather than on the meaning of claim terms within the context of the patent.” Id. at 1321.
Phillips emphasized that the patent system is based on the proposition that the claims cover only
the invented subject matter. Id.
Phillips does not preclude all uses of dictionaries in claim construction proceedings.
Instead, the court assigned dictionaries a role subordinate to the intrinsic record. In doing so, the
court emphasized that claim construction issues are not resolved by any magic formula. The
court did not impose any particular sequence of steps for a court to follow when it considers
disputed claim language. Id. at 1323-25. Rather, Phillips held that a court must attach the
appropriate weight to the intrinsic sources offered in support of a proposed claim construction,
bearing in mind the general rule that the claims measure the scope of the patent grant.
III. CONSTRUCTION OF AGREED TERMS
The Court hereby adopts the following agreed constructions:
Term
“pseudorandom sequence”
(’324 Pat., Cls. 7, 33)

Agreed Construction
“a sequence that is selected by a definite
computational process, but that satisfies one or more
standard tests for statistical randomness”

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“public data”

“data accessible to all or substantially all users of a
public network”

(’715 Pat., Cls. 19-22, 35)
“private data”

“data accessible to one or more authorized parties”

(’715 Pat., Cls. 1, 17, 19-22, 33)
“integrated data”

“data that includes both public data and private data”

(’715 Pat., Cls. 1, 6-8, 20, 26-29, 35, 40)

(Dkt. No. 54, Apr. 8, 2016 Joint Claim Construction and Prehearing Statement, Ex. A, at 1.)
IV. CONSTRUCTION OF DISPUTED TERMS
A. “transaction information”
Plaintiffs’ Proposed Construction

Defendants’ Proposed Construction

No construction necessary. Plain and ordinary
meaning.

“information based upon transaction data”

Alternatively, information regarding a
transaction
(Dkt. No. 54, Ex. A, at 2; Dkt. No. 58, at 5; Dkt. No. 61, at 5.) The parties have submitted that
this term appears in Claims 1-4, 7, 9, 10, and 13 of the ’324 Patent. (Dkt. No. 54, Ex. A, at 2.)
(1) The Parties’ Positions
Plaintiffs argue that Defendants’ proposal “unnecessarily differentiates between
‘information’ and ‘data,’” and “the addition of ‘based on’ implies that the ‘transaction
information’ must somehow be derived from some underlying data through some unstated
calculus.” (Dkt. No. 58, at 6.)
Defendants respond that Plaintiffs’ proposal “is overly broad and finds no support in the
intrinsic record.” (Dkt. No. 61, at 5.) Defendants submit that “each time ‘transaction

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information’ is described in the 324 Patent specification it is described as information based
upon transaction data, not simply as information regarding a transaction . . . .” (Id.)
Plaintiffs reply that the specification discloses both human-readable and computerreadable transaction information, and Defendants “do[] not point to any portion of the intrinsic
record that limits ‘computer-readable transaction information’ to information ‘based upon
transaction data.’” (Dkt. No. 62, at 1).
(2) Analysis
Claim 1 of the ’324 Patent, for example, recites (emphasis added):
1. A database management method comprising the steps of:
receiving and storing transaction information associated with a
nonpredictable bar code, the transaction information generated by a transaction
terminal;
receiving a request for the transaction information including data
associated with the nonpredictable bar code;
retrieving the transaction information based upon the nonpredictable bar
code; and
communicating the transaction information.
The specification discloses:
The human-readable transaction information 34 is based upon the transaction
data entered into the point of sale terminal 20. The human-readable transaction
information 34 can include a printed representation of a list of items in a
transaction, quantities of the items, dates and times associated with the items,
charges or credits associated with the items, and names of parties involved in the
transaction.
***
The human-readable transaction information 34 supported by the member 32
includes information 80 identifying the fictitious hotel, information 82 identifying
the fictitious end user, and information 84, 86, 88, and 90 for four transaction
items. Each set of the information 84, 86, 88, and 90 can include a date, a name, a
category, and an amount for its corresponding item.

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’324 Patent at 2:65-3:4 & 6:36-44 (emphasis added); see id. at 3:54-56 (“Based upon the
transaction information received thereby, the computer 44 stores computer-readable transaction
information 46 in a database 50.”).
These disclosures of “human-readable transaction information” imply that transaction
information is not necessarily human-readable. See Phillips, 415 F.3d at 1314 (“the claim in this
case refers to ‘steel baffles,’ which strongly implies that the term ‘baffles’ does not inherently
mean objects made of steel”). Indeed, the specification also discloses “computer-readable
transaction information.” See, e.g., ’324 Patent at 3:55-56.
Further, at the July 1, 2016 hearing, Defendants submitted that the specification discloses
that “transaction data” is data that is entered into a point-of-sale terminal, and Defendants urged
that “transaction information” must be at least partially derived from such transaction data. See
’324 Patent at 2:44-47, 2:65-66 & 10:3-9. On balance, requiring “transaction information” to be
derived from transaction data that was entered into a point-of-sale terminal would improperly
limit the disputed term to a particular aspect of what is disclosed as merely “an embodiment of
an accounting system in accordance with the present invention.” Id. at 2:41-42. Also, at the
July 1, 2016 hearing, Defendants acknowledged that transaction information could include
something like a telephone number of a retail store even if that telephone number was not
entered into a point-of-sale terminal and was not associated with only a specific transaction.
To make these findings more explicit, construction is appropriate to clarify that
“transaction information” need not necessarily be derived from transaction data but rather need
merely be information regarding a transaction. See TQP Dev., LLC v. Merrill Lynch & Co., Inc.,
No. 2:08-CV-471, 2012 WL 1940849, at *2 (E.D. Tex. May 29, 2012) (Bryson, J.) (“The Court

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believes that some construction of the disputed claim language will assist the jury to understand
the claims.”).
The Court accordingly hereby construes “transaction information” to mean
“information regarding a transaction.”
B. “nonpredictable bar code”
Plaintiffs’ Proposed Construction

Defendants’ Proposed Construction

No construction necessary. Plain and ordinary
meaning.

“a bar code encoding one or more characters
which are not determinable by unauthorized
parties”1

Alternatively, a barcode with information
encoded such that the barcode is
nonpredictable
(Dkt. No. 54, Ex. A, at 2; Dkt. No. 58, at 6-7; Dkt. No. 61, at 6.) The parties have submitted that
this term appears in Claims 1-4, 7, 9, 10, and 13 of the ’324 Patent. (Dkt. No. 54, Ex. A, at 2.)
(1) The Parties’ Positions
Plaintiffs argue that Defendants’ proposal is improperly “limited to one benefit of using a
nonpredictable bar code.” (Dkt. No. 58, at 7.) Plaintiffs argue that such disclosed embodiments,
as well as the disclosures in patents incorporated by reference, are merely “exemplary.” (Id.,
at 8.) Further, Plaintiffs argue, Defendants’ proposed reference to “characters” is improper
because: “The encoded characters of the bar code are not what the patent seeks to protect from
unauthorized access. Instead, it is the ‘transaction information’ that is inaccessible to
unauthorized parties.” (Id., at 9.) Finally, Plaintiffs argue that “the nonpredictable bar code need

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Defendants previously proposed: “Bar code formed from a series of numeric or alphanumeric
characters where it is computationally infeasible to predict what the next series of characters will
be given complete knowledge of the algorithm or hardware used to generate the series and
knowledge of all previous series.” (Dkt. No. 54, Ex. A, at 2.)
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not encode only nonpredictable data. Instead, predictable data can be included for encoding,
such as an Internet address.” (Id., at 10.)
Defendants respond that whereas Plaintiffs fail to define “nonpredictable,” Defendants
“propose[] a construction that provides the jury with a simple definition that is supported by the
specification and not limited to a preferred embodiment.” (Dkt. No. 61, at 6.) Defendants
emphasize the contrast in the specification with “predictable” bar codes, which although
generated by a process that is not public are nonetheless “‘predictable’ as that term is used in the
324 Patent because unauthorized parties studying a series of, for example, Sears & Roebuck
store receipts could determine the format being used to generate the receipts.” (Id., at 7.)
Defendants also argue that Plaintiffs’ proposal fails to “define the persons to whom the bar code
is to be nonpredictable,” which Defendants argue is important because the specification discloses
that a nonpredictable bar code can be created by a “pseudorandom process.” (Id., at 8-9.)
Defendants explain that “all pseudorandom processes are deterministic, which means that given
full knowledge of their inputs (including the seeds), anybody with knowledge of the algorithm
can compute the outputs.” (Id., at 9.) Finally, Defendants submit that “[t]he focus on
‘unauthorized parties’ in the proposed construction excludes from the definition codes
predictable to authorized parties that, for example, know how the codes are generated (algorithm
and seed), or who rightfully have access to the bar code on the receipt or card bearing the bar
code.” (Id., at 11.)
Plaintiffs reply that “nonpredictable” simply means “not predictable,” and “[a] lay jury
can understand how to apply those words.” (Dkt. No. 62, at 3.) Plaintiffs also urge that
Defendants “rel[y] on expert testimony that it did not timely disclose,” and Plaintiffs argue that
“Dr. Jakobsson’s declaration does not support [Defendants’] new position.” (Id., at 3 & 8.)

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Further, Plaintiffs argue, “at no point does the specification define nonpredictable . . . [to]
require[] the information be ‘undeterminable’ (versus ‘practically inaccessible’).” (Id., at 4
(citing ’324 Patent at 4:62-64).)
(2) Analysis
As a threshold matter, Plaintiffs have challenged the timeliness of certain opinions of
Defendants’ expert, Dr. Markus Jakobsson, in particular as to paragraph 17 of the expert’s
declaration. (See Dkt. No. 62, at 5 & 7-8; see also Dkt. No. 61, Ex. E, June 3, 2016 Jakobsson
Decl.) The opinions that Plaintiffs have challenged do not alter the Court’s analysis.
Claim 1 of the ’324 Patent, for example, recites (emphasis added):
1. A database management method comprising the steps of:
receiving and storing transaction information associated with a
nonpredictable bar code, the transaction information generated by a transaction
terminal;
receiving a request for the transaction information including data
associated with the nonpredictable bar code;
retrieving the transaction information based upon the nonpredictable bar
code; and
communicating the transaction information.
The specification discloses “nonpredictable” bar codes as follows:
Preferably, the machine-readable data 36 includes a nonpredictable bar code to
identify the transaction. A nonpredictable bar code can be formed by converting
a nonpredictable series of numeric characters or a nonpredictable series of
alphanumeric characters to a bar code representation in accordance with a bar
code standard. A nonpredictable series of characters can be formed by any of the
code generators described in U.S. Pat. Nos. 4,599,489, 4,720,860, and 5,168,520
which are hereby incorporated by reference into this disclosure.
Generally, the nonpredictable bar code is generated using either a random
process or a pseudorandom process. Embodiments of methods and systems for
generating a random or a pseudorandom bar code are described in the application
entitled “Bar Code Display Apparatus” which is incorporated by reference into
this disclosure. It is noted that the term “pseudorandom” describes entities that
are selected by a definite computational process, but that satisfy one or more
standard tests for statistical randomness.

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***
Preferably, the computer-readable transaction information 46 is indexed by a
nonpredictable code encoded in the machine-readable data 36. By making the
code nonpredictable, the computer-readable transaction information 46 is
practically inaccessible by unauthorized parties.
***
Because the various embodiments of the present invention associate a
nonpredictable bar code with a transaction receipt, they provide a significant
improvement in that transaction data associated with the transaction receipt can be
accessed by an end user without concern of access by unauthorized parties.
’324 Patent at 3:18-36, 4:60-64 & 11:7-12 (emphasis added).
On balance, the disclosed results that transaction information is “practically inaccessible
by unauthorized parties” and can be accessed “without concern of access by unauthorized
parties” relate to a particular, potentially-resulting benefit that should not be imported into the
claims. See Liebel-Flarsheim Co. v. Medrad, Inc., 358 F.3d 898, 908 (Fed. Cir. 2004) (“The fact
that a patent asserts that an invention achieves several objectives does not require that each of the
claims be construed as limited to structures that are capable of achieving all of the objectives.”);
see also Praxair, Inc. v. ATMI, Inc., 543 F.3d 1306, 1325 (Fed. Cir. 2008) (“[I]t is generally not
appropriate to limit claim language to exclude particular devices because they do not serve a
perceived purpose of the invention.”) (citation and internal quotation marks omitted).
Further, the specification discloses that a bar code may include a predictable portion as
well as a nonpredictable portion:
The machine-readable data 36 includes a nonpredictable bar code 92 to identify
the transaction. Preferably, the nonpredictable bar code 92 provides information
for automatically linking the network access apparatus 56 to a resource or a
destination (such as a Web page) provided by the computer 44. In this case, the
nonpredictable bar code 92 can encode an electronic address such as a URL
(uniform resource locator), a URN (a uniform resource name), or an IP (Internet
Protocol) address.

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A first portion of the electronic address can be fixed and predictable, e.g.
“www.mot.com/”, while a second portion of the electronic address is
nonpredictable, e.g. “598843631937665892”. When concatenated, the electronic
address “www.mot.com/598843631937665892” identifies the computer-readable
transaction information 46 for the hotel stay.
’324 Patent at 6:46-61 (emphasis added). This disclosure thus characterizes a bar code as a
whole as being “nonpredictable” even if a portion of the bar code is “predictable.” At the July 1,
2016 hearing, Defendants acknowledged this disclosure and maintained simply that at least a
portion of the bar code must be nonpredictable. Nonetheless, Defendants’ proposal, which
appears to require that none of the characters encoded by the bar code can be determined, is thus
disfavored.
Finally, the discussions of prior art in the specification, as well as in the prosecution
history, cited by Defendants, do not adequately support Defendants’ proposed construction
because no clear definition or disclaimer is apparent. Although the disputed term requires that a
bar code is not predictable, the disputed term does not require that the bar code cannot be
determined by an unauthorized party under any circumstances. That is, Defendants have not
demonstrated that predictability necessarily turns upon authorization.
Instead, the specification and the prosecution history indicate that a bar code associated
with a particular transaction is “nonpredictable” if the bar code cannot be predicted or at least
cannot feasibly be predicted. (See ’324 Patent at 1:51-60; see also Dkt. No. 61, Ex. C, Office
Action, at 4; id., Ex. D, Mar. 30, 1999 Office Action, at 5-6.) Along these lines, the specification
discloses as examples that the bar code may be truly random (such that it is impossible to predict
the bar code associated with particular transaction information) or the bar code may be
“pseudorandom” such that even though it may be theoretically possible to predict the bar code,
as a practical matter it is simply too difficult to do so. See ’324 Patent at 3:28-36 (quoted above).

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The Court therefore hereby construes “nonpredictable bar code” to mean “bar code
that cannot be predicted or that is infeasible to predict.”
C. “private transactional data”
Plaintiffs’ Proposed Construction

Defendants’ Proposed Construction

No construction necessary. Plain and ordinary
meaning.

Indefinite

(Dkt. No. 54, Ex. A, at 3; Dkt. No. 58, at 11; Dkt. No. 61, at 11.) The parties submitted that this
term appears in Claims 17 and 33 of the ’715 Patent, although since then Plaintiffs have
disclaimed Claim 17. (Dkt. No. 54, Ex. A, at 3; Dkt. No. 61, Ex. A, May 3, 2016 Disclaimer in
Patent Under 37 CFR 1.321(a).) Thus, only Claim 33 of the ’715 Patent remains at issue.
(1) The Parties’ Positions
Plaintiffs argue that this term “is simply private data associated with a transaction,” and
Plaintiffs note that the parties have agreed upon a construction for “private data.” (Dkt. No. 58,
at 11.)
Defendants respond that although the parties have agreed upon the meaning of “private
data” in independent claim 20, “the subset of private data encompassed by dependent claim 33,
private transactional data, is unsupported by the specification and thus indefinite.” (Dkt.
No. 61, at 12.) Defendants argue: “Whether this term would encompass types of data that may
or may not be public – such as a user’s address and telephone number – is uncertain under
Plaintiffs’ explanation. Indeed, the specification provides no teaching as to what constitutes
‘transactional data,’ let alone ‘private transactional data,’ and thus fails to inform those skilled as
to the meaning of this term.” (Id.)
Plaintiffs reply that Defendants’ argument that (in Plaintiffs’ words) “‘private
transactional data’ does not appear word-for-word in the text of the specification” is, Plaintiffs
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argue, “a written-description-type argument, and one the Federal Circuit has rejected.” (Dkt.
No. 62, at 9 (citing Bancorp Servs., LLC v. Hartford Life Ins. Co., 359 F.3d 1367, 1372 (Fed.
Cir. 2004)).)
(2) Analysis
The Supreme Court of the United States has “read [35 U.S.C.] § 112, ¶ 2 to require that a
patent’s claims, viewed in light of the specification and prosecution history, inform those skilled
in the art about the scope of the invention with reasonable certainty.” Nautilus, Inc. v. Biosig
Instruments, Inc., 134 S. Ct. 2120, 2129 (2014). “A determination of claim indefiniteness is a
legal conclusion that is drawn from the court’s performance of its duty as the construer of patent
claims.” Datamize, LLC v. Plumtree Software, Inc., 417 F.3d 1342, 1347 (Fed. Cir. 2005)
(citations and internal quotation marks omitted), abrogated on other grounds by Nautilus, 134
S. Ct. 2120.
Claims 20 and 33 of the ’324 Patent recite:
20. A method of integrating and delivering data available over a network, said
method including the steps of:
acquiring public data from at least one publicly available data store
coupled to said network, wherein said public data is determined by private data;
acquiring said private data from at least one private data store coupled to
said network;
integrating said public data and said private data to form integrated data;
and
delivering said integrated data to a user system.
***
33. The method of claim 20, wherein acquiring private data includes acquiring
private transactional data.
To the extent, if any, that the parties dispute whether it is the transactional data or the
transaction itself that must be private, the context of the disputed term is sufficiently clear that
the word “private” refers to the data rather than the transaction.
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As to Defendants’ indefiniteness argument, even where “the entire term . . . is not defined
in the patent,” and the parties have not identified “any industry publication that defines the
term,” “[n]onetheless, the components of the term [may] have well-recognized meanings, which
allow the reader to infer the meaning of the entire phrase with reasonable confidence.” Bancorp,
359 F.3d at 1372.
At the July 1, 2016 hearing, Defendants reiterated that “private” is a subjective term and
that there is no way to know whether a particular piece of information, such as a person’s home
address or e-mail address, is being kept private or is publicly available. Defendants argued that
the specification provides no guidance as to whether or not such information is “private” for
purposes of this disputed term.
As to “private data,” however, the specification discloses for example:
Private data on the screen shot in FIG. 6 includes data under the “MY
ACCOUNTS” heading, including current balances, recent payments and
membership rewards points available.
’715 Patent at 9:14-17; see id. at Fig. 6. The parties appear to agree that the “private
transactional data” in Claim 33 is a subset of the “private data” recited in Claim 20. (See Dkt.
No. 61, at 12 (arguing that “the subset of private data encompassed by dependent claim 33,
private transactional data, is unsupported by the specification and thus indefinite”); Dkt. No. 62,
at 9 (“It is . . . undisputed that private transactional data is one type of private data.”).) As noted
above, the parties have agreed that “private data” means “data accessible to one or more
authorized parties.” (Dkt. No. 54, Ex. A, at 1.)
Plaintiffs also point out that in a recent Petition for Covered Business Method Review
(“CBM Petition”) at the United States Patent and Trademark Office, Defendants challenged
definiteness as to other terms but not as to “transactional data.” (Compare Dkt. No. 58-3, at 79

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with Dkt. No. 62, Ex. C, at 7 (“The ’715 Patent’s specification makes clear that the recited
‘transactional data’ relates to financial transactions. Specifically, ‘transactional data’ is
discussed in detail in the specification with regard to FIG. 3.”).)
The absence of a definiteness challenge as to “private transaction data” in Defendants’
CBM Petition is of limited probative weight, if any. Nonetheless, Defendants’ statement that
“transaction data” is “discussed in detail in the specification” (id.) weighs against finding
indefiniteness here because Defendants have not demonstrated that limiting such data to
“private” data renders the term any less understandable, particularly given that the parties have
agreed upon a construction for “private data.”
The Court therefore hereby rejects Defendants’ indefiniteness argument. No further
construction is necessary. See U.S. Surgical Corp. v. Ethicon, Inc., 103 F.3d 1554, 1568 (Fed.
Cir. 1997) (“Claim construction is a matter of resolution of disputed meanings and technical
scope, to clarify and when necessary to explain what the patentee covered by the claims, for use
in the determination of infringement. It is not an obligatory exercise in redundancy.”); see also
O2 Micro Int’l Ltd. v. Beyond Innovation Tech. Co., 521 F.3d 1351, 1362 (Fed. Cir. 2008)
(“[D]istrict courts are not (and should not be) required to construe every limitation present in a
patent’s asserted claims.”); Finjan, Inc. v. Secure Computing Corp., 626 F.3d 1197, 1207 (Fed.
Cir. 2010) (“Unlike O2 Micro, where the court failed to resolve the parties’ quarrel, the district
court rejected Defendants’ construction.”); ActiveVideo Networks, Inc. v. Verizon Commcn’s,
Inc., 694 F.3d 1312, 1326 (Fed. Cir. 2012); Summit 6, LLC v. Samsung Elecs. Co., Ltd., 802 F.3d
1283, 1291 (Fed. Cir. 2015).
The Court therefore hereby construes “private transactional data” to have its plain
meaning.

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D. “spending habit data” and “promotion data”
Plaintiffs’ Proposed Construction

Defendants’ Proposed Construction

No construction necessary. Plain and ordinary
meaning.

Indefinite

(Dkt. No. 54, Ex. A, at 3; Dkt. No. 58, at 13.) The parties have submitted that these terms appear
in Claim 19 of the ’715 Patent. (Dkt. No. 54, Ex. A, at 3.)
Plaintiffs have disclaimed the claim in which these terms appear. (See Dkt. No. 61,
Ex. A, May 3, 2016 Disclaimer in Patent Under 37 CFR 1.321(a).) The Court therefore need not
address these terms.
V. CONCLUSION
The Court adopts the constructions set forth in this opinion for the disputed terms of the
patents-in-suit.
The parties are ordered that they may not refer, directly or indirectly, to each other’s
claim construction positions in the presence of the jury. Likewise, the parties are ordered to
refrain from mentioning any portion of this opinion, other than the actual definitions adopted by
the Court, in the presence of the jury. Any reference to claim construction proceedings is limited
to informing the jury of the definitions adopted by the Court.
Within thirty (30) days of the issuance of this Memorandum Opinion and Order, the
parties are hereby ORDERED, in good faith, to mediate this case with the mediator agreed upon
by the parties. As a part of such mediation, each party shall appear by counsel and by at least
one corporate officer possessing sufficient authority and control to unilaterally make binding
decisions for the corporation adequate to address any good faith offer or counteroffer of
settlement that might arise during such mediation. Failure to do so shall be deemed by the Court

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as a failure to mediate in good faith and may subject that party to such sanctions as the Court
deems appropriate.

SIGNED this 19th day of December, 2011.
So ORDERED and SIGNED this 12th day of July, 2016.

____________________________________
RODNEY GILSTRAP
UNITED STATES DISTRICT JUDGE

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APPENDIX A
Disputed Term
A. “transaction
information”

Plaintiffs
No construction necessary.
Plain and ordinary meaning.

Defendants
Construction
“information based upon “information
transaction data”
regarding a
transaction”

(’324 Pat., Cls. 1-4, 7, 9, Alternatively, information
10 & 13)
regarding a transaction
B. “nonpredictable bar
code”

No construction necessary.
Plain and ordinary meaning.

(’324 Pat., Cls. 1-4, 7, 9, Alternatively, a barcode with
10 & 13)
information encoded such that
the barcode is nonpredictable
C. “private
transactional data”
3

(’715 Pat., Cls. 19, 33)

“a bar code encoding
one or more characters
which are not
determinable by
unauthorized parties”2
Indefinite

No construction necessary.
Plain and ordinary
meaning.

“bar code that cannot
be predicted or that is
infeasible to predict”

Plain meaning
(Reject Defendants’
indefiniteness
argument)

2

Defendants previously proposed: “Bar code formed from a series of numeric or alphanumeric
characters where it is computationally infeasible to predict what the next series of characters will
be given complete knowledge of the algorithm or hardware used to generate the series and
knowledge of all previous series.” (Dkt. No. 54, Ex. A, at 2.)
3

Plaintiffs have since disclaimed Claim 19, so this term is no longer at issue as to Claim 19.
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