AdvanceMe Inc v. RapidPay LLC

Filing 143

"SEE DOC 152 FOR MOTION TO EXCEED PAGE LIMIT" MOTION to Compel by First Funds, LLC, Merchant Money Tree, Inc., Reach Financial, LLC. (Attachments: # 1 Text of Proposed Order # 2 Exhibit A# 3 Exhibit B# 4 Exhibit C# 5 Exhibit D# 6 Exhibit E# 7 Exhibit F# 8 Exhibit G# 9 Exhibit H# 10 Exhibit I# 11 Exhibit J# 12 Exhibit K# 13 Exhibit L# 14 Exhibit M# 15 Exhibit N# 16 Exhibit O# 17 Exhibit P# 18 Exhibit Q# 19 Exhibit R# 20 Exhibit S# 21 Exhibit T# 22 Exhibit U)(Gray, Joseph) Modified on 11/15/2006 (rvw, ). Modified on 11/16/2006 (rvw, ).

AdvanceMe Inc v. RapidPay LLC

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EXHIBIT 1 CLEVER IDEAS -- LECARD, INC. INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS 1. A method for payment, comprising: PRIOR PUBLICATION REFERENCES & PRIOR USE REFERENCES automated LeCARD utilizes a method of automated payments to LeCARD by restaurants as repayment of obligations owed either for advertising or cash advances. See October 29, 1992 Letter and Enclosed Chicago Chop House examples (showing automated payments to LeCARD by Diners Club). "[T]he separate LeCARD plastic is being replaced by a new Diners Club Card with a LeCARD logo on the reverse side of the card." October 29, 1992 Suckow letter at ¶ 2.

at a merchant,

accepting a customer identifier as payment from the customer "Beginning September 18th, 1992, you will be able to capture your LeCARD transactions electronically." July 23, 1992 Suckow letter at ¶ 2. and electronically forwarding information related to the payment "Electronic Draft Capture of LeCARD transactions is now a reality. The system has been to a computerized merchant tested this past month and has been working well for both the restaurants and Cardmembers." processor; October 29, 1992 Suckow letter at ¶ 2. "Electronic Draft Capture of LeCARD transactions is available only to those restaurants that are processing directly to Diners Club and are receiving payment from Diners Club." October 29, 2992 Suckow Letter at ¶ 3. at the computerized processor, merchant Diner's Club was the merchant processor for LeCARD transactions, see October 29, 1992 Suckow Letter at ¶ 3 (noting that participating restaurants are "processing directly to Diners Club"), and the language of the patent makes clear that merchant processors acquire payment acquiring the information related to information and authorize and settle the payment. the payment from the merchant, authorizing and settling the "The enclosed examples from the Chicago Chop House indicate that $600 worth of Diners payment, Club and Diners Club/LeCARD transactions were submitted. Of the $600 total, $500 were regular Diners Club transactions which were paid in the normal manner. A LeCARD charge and forwarding at least a portion of of $100 completes the $600 total and a letter of change was generated to indicate that this the payment to a computerized transaction was forwarded to LeCARD. Of this $100 transaction, 20% ($20) was reimbursed payment receiver as payment of at to cover the tax and tip portion of the charge. The remaining 80% was credited to reduce the

CLEVER IDEAS -- LECARD, INC. INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS PRIOR PUBLICATION REFERENCES & PRIOR USE REFERENCES

least a portion of an obligation outstanding advertising balance." October 29, 1992 Suckow letter at ¶ 6 (showing that a made by the merchant; portion of the payment was forwarded to LeCARD, the computerized payment receiver, as payment on an obligation owed by the merchant, "the outstanding advertising balance"). "This letter shall serve as notice to you to no longer pay LeCARD for all of my Diners Club and Carte Blanche charges. Effective immediately please pay me for my Diners Club and Carte Blanche charges and pay LeCARD for only my LeCARD charges." Jan. 10, 1995 Letter from Bossa Nova (restaurant) to Diners Club (showing that the merchant processor, Diners Club, would be forwarding a portion of the restaurant customer payments to LeCARD and a portion to the restaurant). The restaurant owed an obligation to LeCARD, either for cash advances given to the restaurant or for advertising advances given to the restaurant. See, e.g. Agreement between CLI (Clever Ideas -- LeCARD, Inc.) and Bravo Cucina, dated March 20, 1995 (demonstrating contractual obligation by Bravo Cucina, restaurant, to CLI, to repay cash advances "by providing food and beverage credits . . . in goods and services to Diners Club members"); Agreement between CLI and Mangia, Inc. and Calamari, Inc., dated April 28, 1994 (demonstrating contractual obligation by Mangia and Calamari, restaurants, to CLI, to repay advertising advances "by providing . . . goods and services to Diners Club Cardmembers.") and at the computerized payment "A LeCARD charge of $100 completes the $600 total and a letter of change was generated to receiver, indicate that this transaction was forwarded to LeCARD. Of this $100 transaction, 20% ($20) was reimbursed to cover the tax and tip portion of the charge. The remaining 80% ($80) was credited to reduce the outstanding advertising balance." October 29, 1992 Suckow letter at ¶ 6 (showing that a portion of the payment was forwarded to LeCARD, the payment receiver, as payment on an obligation owed by the merchant, "the outstanding advertising balance" and showing that the balance was thereafter reduced). receiving the portion of the payment forwarded by the LeCARD reduced the balance owed by the restaurant as it received the payment information computerized merchant processor from Diners Club. See, e.g. June 1996 Statement from LeCARD to Club Lucky (showing and applying that portion to the 2

CLEVER IDEAS -- LECARD, INC. INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS PRIOR PUBLICATION REFERENCES & PRIOR USE REFERENCES

outstanding obligation made by the portion of each batch of LeCARD transactions being applied to Club Lucky's, the restaurant's, merchant to reduce such obligation. outstanding balance). 2. The method of claim 1 wherein the accepting step comprises accepting a credit card number as the customer identifier. It would have been obvious to a person of ordinary skill in the art at the time of the alleged invention of Plaintiff's asserted claims to apply mechanisms and methods in use for one type of customer identifier to another type of customer identifier, e.g., for credit cards as well as charge cards. And the statements by the alleged inventor and by the Examiner, and the language of the patent itself, make clear that a person of ordinary skill in the art would be motivated to make the method or system work in the same way for any customer identifier, including credit cards. "[T]he separate LeCARD plastic is being replaced by a new Diners Club Card with a LeCARD logo on the reverse side of the card . . ." October 29, 1992 Suckow letter at ¶ 2. "New Diners Club/LeCARD charge cards were issued to all existing LeCARD Cardmembers on October 26th and you can expect to see these new cards in your restaurant right away." October 29, 1992 Suckow letter at ¶ 8 (showing that the Diners Club/LeCARD card is accepted at the restaurant and is a charge card). 3. The method of claim 1 wherein the accepting step comprises accepting a debit card number as the customer identifier. It would have been obvious to a person of ordinary skill in the art at the time of the alleged invention of Plaintiff's asserted claims to apply mechanisms and methods in use for one type of customer identifier to another type of customer identifier, e.g., for debit cards as well as charge cards. And the statements by the alleged inventor and by the Examiner, and the language of the patent itself, make clear that a person of ordinary skill in the art would be motivated to make the method or system work in the same way for any customer identifier, including debit cards. "[T]he separate LeCARD plastic is being replaced by a new Diners Club Card with a LeCARD logo on the reverse side of the card . . ." October 29, 1992 Suckow letter at ¶ 2. "New Diners Club/LeCARD charge cards were issued to all existing LeCARD Cardmembers 3

CLEVER IDEAS -- LECARD, INC. INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS PRIOR PUBLICATION REFERENCES & PRIOR USE REFERENCES on October 26th and you can expect to see these new cards in your restaurant right away." October 29, 1992 Suckow letter at ¶ 8 (showing that the Diners Club/LeCARD card is accepted at the restaurant and is a charge card). 4. The method of claim 1 wherein the accepting step comprises accepting a smart card number as the customer identifier. It would have been obvious to a person of ordinary skill in the art at the time of the alleged invention of Plaintiff's asserted claims to apply mechanisms and methods in use for one type of customer identifier to another type of customer identifier, e.g., for smart cards as well as charge cards. And the statements by the alleged inventor and by the Examiner, and the language of the patent itself, make clear that a person of ordinary skill in the art would be motivated to make the method or system work in the same way for any customer identifier, including smart cards. "[T]he separate LeCARD plastic is being replaced by a new Diners Club Card with a LeCARD logo on the reverse side of the card . . ." October 29, 1992 Suckow letter at ¶ 2. "New Diners Club/LeCARD charge cards were issued to all existing LeCARD Cardmembers on October 26th and you can expect to see these new cards in your restaurant right away." October 29, 1992 Suckow letter at ¶ 8 (showing that the Diners Club/LeCARD card is accepted at the restaurant and is a charge card). 5. The method of claim 1 wherein "[T]he separate LeCARD plastic is being replaced by a new Diners Club Card with a the accepting step comprises LeCARD logo on the reverse side of the card . . ." October 29, 1992 Suckow letter at ¶ 2. accepting a charge card number as "New Diners Club/LeCARD charge cards were issued to all existing LeCARD Cardmembers the customer identifier. on October 26th and you can expect to see these new cards in your restaurant right away." October 29, 1992 Suckow letter at ¶ 8 (showing that the Diners Club/LeCARD card is accepted at the restaurant and is a charge card). 6. The method of claim 1 wherein "New Diners Club/LeCARD charge cards were issued to all existing LeCARD Cardmembers the accepting step comprises on October 26th and you can expect to see these new cards in your restaurant right away." accepting the customer identifier at 4

CLEVER IDEAS -- LECARD, INC. INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS a merchant location. PRIOR PUBLICATION REFERENCES & PRIOR USE REFERENCES Suckow Letter at ¶ 8.

7. The method of claim 1 wherein "Electronic Draft Capture of LeCARD transactions is now a reality." Suckow Letter at ¶ 2. the accepting step comprises "Now that LeCARD transactions can be captured electronically . . ." Id. at ¶ 7. electronically accepting the customer identifier. 8. The method of claim 1 wherein The payment information was forwarded by Diners Club to LeCARD periodically. See, e.g., the steps performed at the merchant Club Lucky Statement (showing that LeCARD received payment information periodically, for processor further comprise example, up to four days after the transaction was completed).1 accumulating the payments until a predetermined amount is reached and then forwarding at least a portion of the accumulated payments to the payment receiver. 9. The method of claim 1 wherein The payment information was forwarded by Diners Club to LeCARD periodically. See, e.g., the steps performed at the merchant Club Lucky Statement (showing that LeCARD received payment information periodically, for processor comprise periodically example, up to four days after the transaction was completed). forwarding at least a portion of the payment to the payment receiver. 10. A system for automated LeCARD utilizes a system for automated payments to LeCARD via Diners Club (the merchant payment of an obligation made by a processor) as repayment of obligations owed by restaurants either for advertising or cash merchant, comprising: advances. See October 29, 1992 Letter and Enclosed Chicago Chop House examples (showing automated payments to LeCARD by Diners Club).

At this pre-claim construction stage of the action, Defendants take no position as to the appropriateness of the claim construction applied in AdvanceMe's Preliminary Infringement Contentions for Defendants ("Infringement Contentions"), but note that under the approach in the Infringement Contentions, which equates periodic forwarding with accumulation to a predetermined amount, the LeCARD method anticipates this claim.

1

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CLEVER IDEAS -- LECARD, INC. INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS at a merchant, PRIOR PUBLICATION REFERENCES & PRIOR USE REFERENCES

"[T]he separate LeCARD plastic is being replaced by a new Diners Club Card with a LeCARD logo on the reverse side of the card. . . . New Diners Club/LeCARD charge cards means for accepting a customer were issued to all existing LeCARD Cardmembers on October 26th and you can expect to see identifier as payment from the these new cards in your restaurant right away." October 29, 1992 Suckow letter at ¶¶ 2, 8 customer (showing that means for accepting a customer identifier as payment exist, including, on information and belief, a merchant terminal or point-of-sale terminal). "Electronic Draft Capture of LeCARD transactions is now a reality. The system has been and for electronically forwarding tested this past month and has been working well for both the restaurants and Cardmembers." information related to the payment October 29, 1992 Suckow letter at ¶ 2. to a computerized merchant processor, "Electronic Draft Capture of LeCARD transactions is available only to those restaurants that are processing directly to Diners Club . . . ." October 29, 1992 Suckow Letter at ¶ 3 (showing implicitly that means exist in the LeCARD system for electronically forwarding payment information to Diners Club, including, on information and belief, a computer running wherein the merchant associated appropriate software). with the payment has an outstanding obligation to a third The restaurant owed an obligation to LeCARD, either for cash advances given to the restaurant party; or for advertising advances given to the restaurant. See, e.g. Agreement between CLI (Clever Ideas -- LeCARD, Inc.) and Bravo Cucina, dated March 20, 1995 (demonstrating contractual obligation by Bravo Cucina, restaurant, to CLI, to repay cash advances "by providing food and beverage credits . . . in goods and services to Diners Club members"); Agreement between CLI and Mangia, Inc. and Calamari, Inc., dated April 28, 1994 (demonstrating contractual obligation by Mangia and Calamari, restaurants, to CLI, to repay advertising advances" by providing . . . goods and services to Diners Club Cardmembers.") and at the computerized merchant "Electronic Draft Capture of LeCARD transactions is available only to those restaurants that processor, are processing directly to Diners Club . . . ." October 29, 1992 Suckow Letter at ¶ 3 (showing implicitly that means exist in the LeCARD system for Diners Club, the merchant processor, to means for receiving the information receive the payment information, including, on information and belief, a computer running

6

CLEVER IDEAS -- LECARD, INC. INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS PRIOR PUBLICATION REFERENCES & PRIOR USE REFERENCES

related to the payment from the appropriate software). merchant, The language of the patent makes clear that merchant processors acquire payment information means for authorizing and settling and authorize and settle the payment. On information and belief, the means for performing the payment, this function is a computer running appropriate software. and means for forwarding a portion "The enclosed examples from the Chicago Chop House indicate that $600 worth of Diners of the payment to the third party to Club and Diners Club/LeCARD transactions were submitted. Of the $600 total, $500 were reduce the obligation. regular Diners Club transactions which were paid in the normal manner. A LeCARD charge of $100 completes the $600 total and a letter of change was generated to indicate that this transaction was forwarded to LeCARD. Of this $100 transaction, 20% ($20) was reimbursed to cover the tax and tip portion of the charge. The remaining 80% was credited to reduce the outstanding advertising balance." October 29, 1992 Suckow letter at ¶ 6 (showing that means exist for forwarding a portion of the payment was forwarded to LeCARD, the payment receiver, as payment on an obligation owed by the merchant, "the outstanding advertising balance", including, on information and belief, a computer running appropriate software). "This letter shall serve as notice to you to no longer pay LeCARD for all of my Diners Club and Carte Blanche charges. Effective immediately please pay me for my Diners Club and Carte Blanche charges and pay LeCARD for only my LeCARD charges." Jan. 10, 1995 Letter from Bossa Nova (restaurant) to Diners Club (showing that means exist for forwarding a portion of the restaurant customer payments to LeCARD and a portion to the restaurant, including, on information and belief, a computer running appropriate software). 11. The system of claim 10 wherein the accepting means comprises means for accepting a credit card number as the customer identifier. It would have been obvious to a person of ordinary skill in the art at the time of the alleged invention of Plaintiff's asserted claims to apply systems and means in use for acceptance of one type of customer identifier to another type of customer identifier, e.g., for credit cards as well as charge cards. And the statements by the alleged inventor and by the Examiner, and the language of the patent itself, make clear that a person of ordinary skill in the art would be motivated to make the method or system work in the same way for any customer identifier,

7

CLEVER IDEAS -- LECARD, INC. INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS PRIOR PUBLICATION REFERENCES & PRIOR USE REFERENCES including credit cards. merchant's terminal. Credit card numbers may be accepted, for example, using the

"[T]he separate LeCARD plastic is being replaced by a new Diners Club Card with a LeCARD logo on the reverse side of the card . . . New Diners Club/LeCARD charge cards were issued to all existing LeCARD Cardmembers on October 26th and you can expect to see these new cards in your restaurant right away." October 29, 1992 Suckow letter at ¶¶ 2, 8 (showing that means for accepting a customer identifier as payment exist, including, on information and belief, a merchant terminal). 12. The system of claim 10 wherein the accepting means comprises means for accepting a debit card number as the customer identifier. It would have been obvious to a person of ordinary skill in the art at the time of the alleged invention of Plaintiff's asserted claims to apply systems and means in use for acceptance of one type of customer identifier to another type of customer identifier, e.g., for debit cards as well as charge cards. And the statements by the alleged inventor and by the Examiner, and the language of the patent itself, make clear that a person of ordinary skill in the art would be motivated to make the method or system work in the same way for any customer identifier, including debit cards. Debit card numbers may be accepted, for example, using the merchant's terminal. "[T]he separate LeCARD plastic is being replaced by a new Diners Club Card with a LeCARD logo on the reverse side of the card . . . New Diners Club/LeCARD charge cards were issued to all existing LeCARD Cardmembers on October 26th and you can expect to see these new cards in your restaurant right away." October 29, 1992 Suckow letter at ¶¶ 2, 8 (showing that means for accepting a customer identifier as payment exist, including, on information and belief, a merchant terminal). 13. The system of claim 10 wherein It would have been obvious to a person of ordinary skill in the art at the time of the alleged the accepting means comprises invention of Plaintiff's asserted claims to apply systems and means in use for acceptance of means for accepting a smart card one type of customer identifier to another type of customer identifier, e.g., for smart cards as well as charge cards. And the statements by the alleged inventor and by the Examiner, and the

8

CLEVER IDEAS -- LECARD, INC. INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS number as the customer identifier. PRIOR PUBLICATION REFERENCES & PRIOR USE REFERENCES language of the patent itself, make clear that a person of ordinary skill in the art would be motivated to make the method or system work in the same way for any customer identifier, including smart cards. Smart card numbers may be accepted, for example, using the merchant's terminal. "[T]he separate LeCARD plastic is being replaced by a new Diners Club Card with a LeCARD logo on the reverse side of the card . . . New Diners Club/LeCARD charge cards were issued to all existing LeCARD Cardmembers on October 26th and you can expect to see these new cards in your restaurant right away." October 29, 1992 Suckow letter at ¶¶ 2, 8 (showing that means for accepting a customer identifier as payment exist, including, on information and belief, a merchant terminal). 14. The system of claim 10 wherein the accepting means comprises means for accepting a charge card number as the customer identifier. "[T]he separate LeCARD plastic is being replaced by a new Diners Club Card with a LeCARD logo on the reverse side of the card . . . New Diners Club/LeCARD charge cards were issued to all existing LeCARD Cardmembers on October 26th and you can expect to see these new cards in your restaurant right away." October 29, 1992 Suckow letter at ¶¶ 2, 8 (showing that means for accepting a customer identifier as payment exist, including, on information and belief, a merchant terminal). "New Diners Club/LeCARD charge cards were issued to all existing LeCARD Cardmembers on October 26th and you can expect to see these new cards in your restaurant right away." Suckow Letter at ¶ 8 (showing that means for accepting a customer identifier as payment exist at a merchant location, including, on information and belief, a terminal or other point of sale device). "Electronic Draft Capture of LeCARD transactions is now a reality." Suckow Letter at ¶ 2. "Now that LeCARD transactions can be captured electronically . . ." Id. at ¶ 7 (showing that means for electronically accepting a customer identifier as payment exist, including, on information and belief, via a terminal).

15. The system of claim 10 wherein the accepting means comprises means for accepting the customer identifier at a merchant location. 16. The system of claim 10 wherein the accepting means comprises means for electronically accepting the customer identifier.

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CLEVER IDEAS -- LECARD, INC. INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS 17. The system of claim 10 wherein the means at the merchant processor further comprise means for accumulating the payments until a predetermined amount is reached and means for forwarding at least a portion of the accumulated payments to the third party. 18. The system of claim 10 wherein the forwarding means at the merchant processor comprises means for periodically forwarding at least a portion of the payment to the third party. 19. The system of claim 10 wherein the forwarding means at the merchant processor comprises means for forwarding to the third party an amount that is a percentage of the obligation. PRIOR PUBLICATION REFERENCES & PRIOR USE REFERENCES Means existed for Diners Club to forward payment information to LeCARD periodically, including, on information and belief, a computer running appropriate software. See, e.g., Club Lucky Statement (showing that means exist for forwarding to LeCARD payment information periodically, for example, up to four days after the transaction was completed).2

Means existed for Diners Club to forward payment information to LeCARD periodically, including, on information and belief, a computer running appropriate software. See, e.g., Club Lucky Statement (showing that means exist for forwarding to LeCARD payment information periodically, for example, up to four days after the transaction was completed).

The portion of the payment forwarded by Diners Club is a percentage of the merchant's obligation. "This letter shall serve as notice to you to no longer pay LeCARD for all of my Diners Club and Carte Blanche charges. Effective immediately please pay me for my Diners Club and Carte Blanche charges and pay LeCARD for only my LeCARD charges." Jan. 10, 1995 Letter from Bossa Nova (restaurant) to Diners Club (showing that means exist for forwarding a

At this pre-claim construction stage of the action, Defendants take no position as to the appropriateness of the claim construction applied in AdvanceMe's Preliminary Infringement Contentions for Defendants ("Infringement Contentions"), but note that under the approach in the Infringement Contentions, which equates periodic forwarding with accumulation to a predetermined amount, the LeCARD method anticipates this claim. At this pre-claim construction stage of the action, Defendants take no position as to the appropriateness of the claim construction applied by the alleged inventor, but note that under the approach stated during the alleged inventor's deposition, which equates forwarding any amount with forwarding a percentage of the obligation, the LeCARD method anticipates this claim.
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CLEVER IDEAS -- LECARD, INC. INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS PRIOR PUBLICATION REFERENCES & PRIOR USE REFERENCES portion of the restaurant customer payments to LeCARD and a portion to the restaurant, including, on information and belief, a computer running appropriate software).3 Means existed for Diners Club to forward payment to LeCARD, including, on information and belief, a computer running appropriate software. See, e.g., Club Lucky Statement (showing that means exist for forwarding payment to LeCARD).

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EXHIBIT 3 FIRST USA INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS 1. A method for payment, comprising: PRIOR PUBLICATION REFERENCES automated First USA Merchant Services, Inc. Merchant Credit Card Agreement ("Agreement") describes a method for automated payment. First USA, the merchant processor, provides card processing services to a merchant. The merchant repays obligations to First USA and/or other third parties through future sales transactions.

at a merchant,

"Under the terms of this Agreement, Merchant will honor certain valid credit cards (`Cards') when presented as payment for good or services, and Company will provide certain credit card accepting a customer identifier as processing services to Merchant." Agreement at ¶ 1. payment from the customer "Honoring Cards. Merchant will honor without discrimination valid Cards properly tendered and electronically forwarding for use in accordance with this Agreement and the bylaws, rules and regulations, as they exist information related to the payment from time to time, of VISA, MasterCard and other applicable credit card associations . . . ." to a computerized merchant Agreement § 1(A). processor; "Sales Data. Merchant shall evidence all sales and leases made through the use of Electronic Data Capture ("EDC") services involving the honoring of Cards through the use of magnetic strip reading terminals and execution of data on forms provided by Company (all such resulting sales data and electronic records being collectively referred to as `Sales Data')." Agreement § 2(A). "Credit to Merchant. Merchant's electronic submission of Sales Data shall be made pursuant to formats, rules and procedures established by Company for EDC services." Agreement § 2(C). at the computerized processor, merchant "Under the terms of this Agreement, Merchant will honor certain valid credit cards ("Cards") when presented as payment for good or services, and Company will provide certain credit card processing services to Merchant." Agreement at ¶ 1. acquiring the information related to the payment from the merchant, "Exclusivity. Merchant agrees that throughout the terms of this Agreement it will not use the authorizing and settling the services of any bank, corporation, entity or person other than Company . . . (ii) for obtaining

FIRST USA INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS payment, and forwarding at least a portion of the payment to a computerized payment receiver as payment of at least a portion of an obligation made by the merchant; PRIOR PUBLICATION REFERENCES Card transaction authorizations." Agreement § 1(C). "Upon receipt by Company of Sales Data in accordance with the formats, rules and procedures of Company and the terms of this Agreement, Company will process the Sales Data in the applicable interbank clearing systems. After receipt by company of credit for such Sales Data, Company will credit the Account with an amount equal to such credits, subject to the fees, charges, discount and obligations of Merchant hereunder." Agreement § 2(C). "Merchant shall maintain an account (the `Account') at a bank approved by Company. Merchant may not close the Account or reduce it below the minimum balances required by this Agreement. . . . If Company ever reasonably believes that the Account contains insufficient funds to cover debits to the Account, Merchant's obligations hereunder and/or any required minimum balance, then Company may do one or more of the following: . . . (ii) deduct or withhold from credits to Merchant such amounts as are necessary to cover the debits, obligations and minimum balance . . . ." Agreement § 2(B). "Debits to Merchants. Company is hereby authorized to decrease the credits above or debit the Account from time to time in payment for Merchant's obligations pursuant to this Agreement. Such decreases or debits shall include the applicable fees, charges and discounts set forth in Schedule A attached hereto, as well as adjustments and chargebacks, equipment charges (installation or purchase), Cardholder credits, and any fees, charges, fines, assessment, penalties, or other liabilities that may be imposed from time to time by applicable credit card associations. Monthly fees shall be due and payable on the first day of the following calendar month to which they are applicable, and Company may debit the Account or decrease credits for such fees on such date." Agreement § 2(D). Under the Agreement, the merchant has obligations due, e.g., periodically. See, e.g., Schedule A to Agreement, Plan A (Monthly Statement $9.00) and Plan B (Monthly Statement $6.00); Agreement § 2(D) (listing "equipment charges (installation or purchase)" as an example of a merchant obligation for which Company is authorized under the Agreement to periodically

Invalidity Claim Chart - First USA.DOC

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FIRST USA INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS decrease merchant credits). "Chargebacks. . . . If in any one month . . . then Company may take one or more of the following actions: (1) withhold from settlements to Merchant an amount reasonably determined by Company to be sufficient to cover anticipated chargebacks . . . ." Agreement § 2(F). and at the computerized payment "Merchant shall maintain an account (the `Account') at a bank approved by Company. receiver, Merchant may not close the Account or reduce it below the minimum balances required by this Agreement. . . . If Company ever reasonably believes that the Account contains insufficient receiving the portion of the funds to cover debits to the Account, Merchant's obligations hereunder and/or any required payment forwarded by the minimum balance, then Company may do one or more of the following: . . . (ii) deduct or computerized merchant processor withhold from credits to Merchant such amounts as are necessary to cover the debits, and applying that portion to the obligations and minimum balance . . . ." Agreement § 2(B). outstanding obligation made by the merchant to reduce such obligation. "Debits to Merchants. Company is hereby authorized to decrease the credits above or debit the Account from time to time in payment for Merchant's obligations pursuant to this Agreement. Such decreases or debits shall include the applicable fees, charges and discounts set forth in Schedule A attached hereto, as well as adjustments and chargebacks, equipment charges (installation or purchase), Cardholder credits, and any fees, charges, fines, assessment, penalties, or other liabilities that may be imposed from time to time by applicable credit card associations. Monthly fees shall be due and payable on the first day of the following calendar month to which they are applicable, and Company may debit the Account or decrease credits for such fees on such date." Agreement § 2(D). Under the Agreement, the merchant has obligations due, e.g., periodically. See, e.g., Schedule A to Agreement, Plan A (Monthly Statement $9.00) and Plan B (Monthly Statement $6.00); Agreement § 2(D) (listing "equipment charges (installation or purchase)" as an example of a merchant obligation for which Company is authorized under the Agreement to periodically PRIOR PUBLICATION REFERENCES

Invalidity Claim Chart - First USA.DOC

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FIRST USA INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS decrease merchant credits). "Chargebacks. . . . If in any one month . . . then Company may take one or more of the following actions: (1) withhold from settlements to Merchant an amount reasonably determined by Company to be sufficient to cover anticipated chargebacks . . . ." Agreement § 2(F). 2. The method of claim 1 wherein the accepting step comprises accepting a credit card number as the customer identifier. 3. The method of claim 1 wherein the accepting step comprises accepting a debit card number as the customer identifier. "Honoring Cards. Merchant will honor without discrimination valid Cards properly tendered for use in accordance with this Agreement and the bylaws, rules and regulations, as they exist from time to time, of VISA, MasterCard and other applicable credit card associations . . . ." Agreement § 1(A). It would have been obvious to a person of ordinary skill in the art at the time of the alleged invention of Plaintiff's asserted claims to apply mechanisms and methods in use for one type of customer identifier to another type of customer identifier, e.g., for debit cards as well as credit cards. The statements by the alleged inventor and by the Examiner, and the language of the patent-in-suit itself, make clear that a person of ordinary skill in the art would be motivated to make the First USA system and/or method work in the same way for any customer identifier, including debit cards. "Honoring Cards. Merchant will honor without discrimination valid Cards properly tendered for use in accordance with this Agreement and the bylaws, rules and regulations, as they exist from time to time, of VISA, MasterCard and other applicable credit card associations . . . ." Agreement § 1(A). 4. The method of claim 1 wherein the accepting step comprises accepting a smart card number as the customer identifier. It would have been obvious to a person of ordinary skill in the art at the time of the alleged invention of Plaintiff's asserted claims to apply mechanisms and methods in use for one type of customer identifier to another type of customer identifier, e.g., for smart cards as well as credit cards. The statements by the alleged inventor and by the Examiner, and the language of the patent-in-suit itself, make clear that a person of ordinary skill in the art would be motivated PRIOR PUBLICATION REFERENCES

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FIRST USA INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS PRIOR PUBLICATION REFERENCES to make the First USA system and/or method work in the same way for any customer identifier, including smart cards. "Honoring Cards. Merchant will honor without discrimination valid Cards properly tendered for use in accordance with this Agreement and the bylaws, rules and regulations, as they exist from time to time, of VISA, MasterCard and other applicable credit card associations . . . ." Agreement § 1(A). 5. The method of claim 1 wherein the accepting step comprises accepting a charge card number as the customer identifier. It would have been obvious to a person of ordinary skill in the art at the time of the alleged invention of Plaintiff's asserted claims to apply mechanisms and methods in use for one type of customer identifier to another type of customer identifier, e.g., for charge cards as well as credit cards. The statements by the alleged inventor and by the Examiner, and the language of the patent-in-suit itself, make clear that a person of ordinary skill in the art would be motivated to make the First USA system and/or method work in the same way for any customer identifier, including charge cards. "Honoring Cards. Merchant will honor without discrimination valid Cards properly tendered for use in accordance with this Agreement and the bylaws, rules and regulations, as they exist from time to time, of VISA, MasterCard and other applicable credit card associations . . . ." Agreement § 1(A). 6. The method of claim 1 wherein the accepting step comprises accepting the customer identifier at a merchant location. "Honoring Cards. Merchant will honor without discrimination valid Cards properly tendered for use in accordance with this Agreement and the bylaws, rules and regulations, as they exist from time to time, of VISA, MasterCard and other applicable credit card associations . . . ." Agreement § 1(A). "Sales Data. Merchant shall evidence all sales and leases made through the use of Electronic Data Capture ("EDC") services involving the honoring of Cards through the use of magnetic strip reading terminals and execution of data on forms provided by Company (all such resulting sales data and electronic records being collectively referred to as `Sales Data')."

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FIRST USA INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS PRIOR PUBLICATION REFERENCES Agreement § 2(A) (implying that the Card is physically present in order to read the magnetic strip). 7. The method of claim 1 wherein the accepting step comprises electronically accepting the customer identifier. 8. The method of claim 1 wherein the steps performed at the merchant processor further comprise accumulating the payments until a predetermined amount is reached and then forwarding at least a portion of the accumulated payments to the payment receiver. "Sales Data. Merchant shall evidence all sales and leases made through the use of Electronic Data Capture ("EDC") services involving the honoring of Cards through the use of magnetic strip reading terminals and execution of data on forms provided by Company (all such resulting sales data and electronic records being collectively referred to as `Sales Data')." Agreement § 2(A). Certain fees or charges, for example, are recurring and would be periodically deducted from credits due the merchant and forwarded to a computerized payment receiver of the party to whom the obligation is owed. See, e.g., Schedule A to Agreement, Plan A (Monthly Statement $9.00) and Plan B (Monthly Statement $6.00); Agreement § 2(D) (listing "equipment charges (installation or purchase)" as an example of a merchant obligation for which Company is authorized under the Agreement to periodically decrease merchant credits).1 "Debits to Merchants. Company is hereby authorized to decrease the credits above or debit the Account from time to time in payment for Merchant's obligations pursuant to this Agreement. Such decreases or debits shall include the applicable fees, charges and discounts set forth in Schedule A attached hereto, as well as adjustments and chargebacks, equipment charges (installation or purchase), Cardholder credits, and any fees, charges, fines, assessment, penalties, or other liabilities that may be imposed from time to time by applicable credit card associations. Monthly fees shall be due and payable on the first day of the following calendar month to which they are applicable, and Company may debit the Account or decrease credits for such fees on such date." Agreement § 2(D).

1

At this pre-claim construction stage of the action, Defendants take no position as to the appropriateness of the claim construction applied in AdvanceMe's Preliminary Infringement Contentions for Defendants ("Infringement Contentions"), but note that under the approach in the Infringement Contentions, which equates "periodically forwarding" with "accumulating the payments until a predetermined amount is reached," the method described in the Agreement anticipates this claim.

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FIRST USA INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS 9. The method of claim 1 wherein the steps performed at the merchant processor comprise periodically forwarding at least a portion of the payment to the payment receiver. PRIOR PUBLICATION REFERENCES Certain fees or charges, for example, are recurring and would be periodically deducted from credits due the merchant and forwarded to a computerized payment receiver of the party to whom the obligation is owed. See, e.g., Schedule A to Agreement, Plan A (Monthly Statement $9.00) and Plan B (Monthly Statement $6.00); Agreement § 2(D) (listing "equipment charges (installation or purchase)" as an example of a merchant obligation for which Company is authorized under the Agreement to periodically decrease merchant credits). "Debits to Merchants. Company is hereby authorized to decrease the credits above or debit the Account from time to time in payment for Merchant's obligations pursuant to this Agreement. Such decreases or debits shall include the applicable fees, charges and discounts set forth in Schedule A attached hereto, as well as adjustments and chargebacks, equipment charges (installation or purchase), Cardholder credits, and any fees, charges, fines, assessment, penalties, or other liabilities that may be imposed from time to time by applicable credit card associations. Monthly fees shall be due and payable on the first day of the following calendar month to which they are applicable, and Company may debit the Account or decrease credits for such fees on such date." Agreement § 2(D). 10. A system for automated The Agreement describes a system for automated payment. First USA, the merchant payment of an obligation made by a processor, provides card processing services to a merchant. The merchant repays obligations merchant, comprising: to First USA and/or other third parties through future sales transactions. at a merchant, means for accepting a customer identifier as payment from the customer and for electronically forwarding information related to the payment to a computerized merchant processor, In the system described in the Agreement, the customer identifier can be accepted and forwarded by the merchant via the merchant's terminal connected by a network to First USA. "Under the terms of this Agreement, Merchant will honor certain valid credit cards (`Cards') when presented as payment for good or services, and Company will provide certain credit card processing services to Merchant." Agreement at ¶ 1. "Honoring Cards. Merchant will honor without discrimination valid Cards properly tendered for use in accordance with this Agreement and the bylaws, rules and regulations, as they exist

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FIRST USA INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS PRIOR PUBLICATION REFERENCES

wherein the merchant associated from time to time, of VISA, MasterCard and other applicable credit card associations . . . ." with the payment has an Agreement § 1(A). outstanding obligation to a third "Sales Data. Merchant shall evidence all sales and leases made through the use of Electronic party; Data Capture ("EDC") services involving the honoring of Cards through the use of magnetic strip reading terminals and execution of data on forms provided by Company (all such resulting sales data and electronic records being collectively referred to as `Sales Data')." Agreement § 2(A). "Merchant shall maintain an account (the `Account') at a bank approved by Company. Merchant may not close the Account or reduce it below the minimum balances required by this Agreement. . . . If Company ever reasonably believes that the Account contains insufficient funds to cover debits to the Account, Merchant's obligations hereunder and/or any required minimum balance, then Company may do one or more of the following: . . . (ii) deduct or withhold from credits to Merchant such amounts as are necessary to cover the debits, obligations and minimum balance . . . ." Agreement § 2(B). "Credit to Merchant. Merchant's electronic submission of Sales Data shall be made pursuant to formats, rules and procedures established by Company for EDC services." Agreement § 2(C). "Debits to Merchants. Company is hereby authorized to decrease the credits above or debit the Account from time to time in payment for Merchant's obligations pursuant to this Agreement. Such decreases or debits shall include the applicable fees, charges and discounts set forth in Schedule A attached hereto, as well as adjustments and chargebacks, equipment charges (installation or purchase), Cardholder credits, and any fees, charges, fines, assessment, penalties, or other liabilities that may be imposed from time to time by applicable credit card associations. Monthly fees shall be due and payable on the first day of the following calendar month to which they are applicable, and Company may debit the Account or decrease credits for such fees on such date." Agreement § 2(D).

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FIRST USA INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS PRIOR PUBLICATION REFERENCES Under the Agreement, the merchant has obligations due, e.g., to a third party periodically. See, e.g., Schedule A to Agreement, Plan A (Monthly Statement $9.00) and Plan B (Monthly Statement $6.00); Agreement § 2(D) (listing "equipment charges (installation or purchase)" as an example of a merchant obligation for which Company is authorized under the Agreement to periodically decrease merchant credits). "Chargebacks. . . . If in any one month . . . then Company may take one or more of the following actions: (1) withhold from settlements to Merchant an amount reasonably determined by Company to be sufficient to cover anticipated chargebacks . . . ." Agreement § 2(F). and at the computerized merchant Under the Agreement, First USA acquires the information related to the payment forwarded processor, from the merchant (e.g., from the merchant's terminal), and authorizes and settles the payment. On information and belief, these acts are implemented, at least in part, by a computer running means for receiving the information appropriate software program(s). related to the payment from the merchant, "Exclusivity. Merchant agrees that throughout the terms of this Agreement it will not use the services of any bank, corporation, entity or person other than Company . . . (ii) for obtaining means for authorizing and settling Card transaction authorizations." Agreement § 1(C). the payment, "Upon receipt by Company of Sales Data in accordance with the formats, rules and procedures and means for forwarding a portion of Company and the terms of this Agreement, Company will process the Sales Data in the of the payment to the third party to applicable interbank clearing systems. After receipt by company of credit for such Sales Data, reduce the obligation. Company will credit the Account with an amount equal to such credits, subject to the fees, charges, discount and obligations of Merchant hereunder." Agreement § 2(C). "Merchant shall maintain an account (the `Account') at a bank approved by Company. Merchant may not close the Account or reduce it below the minimum balances required by this Agreement. . . . If Company ever reasonably believes that the Account contains insufficient funds to cover debits to the Account, Merchant's obligations hereunder and/or any required

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FIRST USA INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS PRIOR PUBLICATION REFERENCES minimum balance, then Company may do one or more of the following: . . . (ii) deduct or withhold from credits to Merchant such amounts as are necessary to cover the debits, obligations and minimum balance. . . ." Agreement § 2(B). "Debits to Merchants. Company is hereby authorized to decrease the credits above or debit the Account from time to time in payment for Merchant's obligations pursuant to this Agreement. Such decreases or debits shall include the applicable fees, charges and discounts set forth in Schedule A attached hereto, as well as adjustments and chargebacks, equipment charges (installation or purchase), Cardholder credits, and any fees, charges, fines, assessment, penalties, or other liabilities that may be imposed from time to time by applicable credit card associations. Monthly fees shall be due and payable on the first day of the following calendar month to which they are applicable, and Company may debit the Account or decrease credits for such fees on such date." Agreement § 2(D). Under the Agreement, the merchant has obligations due, e.g., to a third party periodically. See, e.g., Schedule A to Agreement, Plan A (Monthly Statement $9.00) and Plan B (Monthly Statement $6.00); Agreement § 2(D) (listing "equipment charges (installation or purchase)" as an example of a merchant obligation for which Company is authorized under the Agreement to periodically decrease merchant credits). "Chargebacks. . . . If in any one month . . . then Company may take one or more of the following actions: (1) withhold from settlements to Merchant an amount reasonably determined by Company to be sufficient to cover anticipated chargebacks . . . ." Agreement § 2(F). 11. The system of claim 10 wherein A merchant entering into the Agreement with First USA can accept credit card numbers as the accepting means comprises customer identifiers. Credit card numbers may be accepted, for example, using the merchant's means for accepting a credit card terminal. number as the customer identifier. "Honoring Cards. Merchant will honor without discrimination valid Cards properly tendered

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FIRST USA INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS PRIOR PUBLICATION REFERENCES for use in accordance with this Agreement and the bylaws, rules and regulations, as they exist from time to time, of VISA, MasterCard and other applicable credit card associations . . . ." Agreement § 1(A). "Sales Data. Merchant shall evidence all sales and leases made through the use of Electronic Data Capture ("EDC") services involving the honoring of Cards through the use of magnetic strip reading terminals and execution of data on forms provided by Company (all such resulting sales data and electronic records being collectively referred to as `Sales Data')." Agreement § 2(A). 12. The system of claim 10 wherein the accepting means comprises means for accepting a debit card number as the customer identifier. It would have been obvious to a person of ordinary skill in the art at the time of the alleged invention of Plaintiff's asserted claims to apply mechanisms and methods in use for one type of customer identifier to another type of customer identifier, e.g., for debit cards as well as credit cards. The statements by the alleged inventor and by the Examiner, and the language of the patent-in-suit itself, make clear that a person of ordinary skill in the art would be motivated to make the First USA system and/or method work in the same way for any customer identifier, including debit cards. Credit card numbers may be accepted, for example, using the merchant's terminal. "Honoring Cards. Merchant will honor without discrimination valid Cards properly tendered for use in accordance with this Agreement and the bylaws, rules and regulations, as they exist from time to time, of VISA, MasterCard and other applicable credit card associations . . . ." Agreement § 1(A). "Sales Data. Merchant shall evidence all sales and leases made through the use of Electronic Data Capture ("EDC") services involving the honoring of Cards through the use of magnetic strip reading terminals and execution of data on forms provided by Company (all such resulting sales data and electronic records being collectively referred to as `Sales Data')." Agreement § 2(A).

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FIRST USA INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS 13. The system of claim 10 wherein the accepting means comprises means for accepting a smart card number as the customer identifier. PRIOR PUBLICATION REFERENCES It would have been obvious to a person of ordinary skill in the art at the time of the alleged invention of Plaintiff's asserted claims to apply mechanisms and methods in use for one type of customer identifier to another type of customer identifier, e.g., for smart cards as well as credit cards. The statements by the alleged inventor and by the Examiner, and the language of the patent-in-suit itself, make clear that a person of ordinary skill in the art would be motivated to make the First USA system and/or method work in the same way for any customer identifier, including smart cards. Credit card numbers may be accepted, for example, using the merchant's terminal. "Honoring Cards. Merchant will honor without discrimination valid Cards properly tendered for use in accordance with this Agreement and the bylaws, rules and regulations, as they exist from time to time, of VISA, MasterCard and other applicable credit card associations . . . ." Agreement § 1(A). "Sales Data. Merchant shall evidence all sales and leases made through the use of Electronic Data Capture ("EDC") services involving the honoring of Cards through the use of magnetic strip reading terminals and execution of data on forms provided by Company (all such resulting sales data and electronic records being collectively referred to as `Sales Data')." Agreement § 2(A). 14. The system of claim 10 wherein the accepting means comprises means for accepting a charge card number as the customer identifier. It would have been obvious to a person of ordinary skill in the art at the time of the alleged invention of Plaintiff's asserted claims to apply mechanisms and methods in use for one type of customer identifier to another type of customer identifier, e.g., for charge cards as well as credit cards. The statements by the alleged inventor and by the Examiner, and the language of the patent-in-suit itself, make clear that a person of ordinary skill in the art would be motivated to make the First USA system and/or method work in the same way for any customer identifier, including charge cards. Credit card numbers may be accepted, for example, using the merchant's terminal.

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FIRST USA INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS PRIOR PUBLICATION REFERENCES "Honoring Cards. Merchant will honor without discrimination valid Cards properly tendered for use in accordance with this Agreement and the bylaws, rules and regulations, as they exist from time to time, of VISA, MasterCard and other applicable credit card associations . . . ." Agreement § 1(A). "Sales Data. Merchant shall evidence all sales and leases made through the use of Electronic Data Capture ("EDC") services involving the honoring of Cards through the use of magnetic strip reading terminals and execution of data on forms provided by Company (all such resulting sales data and electronic records being collectively referred to as `Sales Data')." Agreement § 2(A). 15. The system of claim 10 wherein Under the Agreement, a merchant can accept a customer identifier using a terminal at a the accepting means comprises location associated with the merchant such as, for example, a retail sales site of the merchant. means for accepting the customer "Honoring Cards. Merchant will honor without discrimination valid Cards properly tendered identifier at a merchant location. for use in accordance with this Agreement and the bylaws, rules and regulations, as they exist from time to time, of VISA, MasterCard and other applicable credit card associations . . . ." Agreement § 1(A). "Sales Data. Merchant shall evidence all sales and leases made through the use of Electronic Data Capture ("EDC") services involving the honoring of Cards through the use of magnetic strip reading terminals and execution of data on forms provided by Company (all such resulting sales data and electronic records being collectively referred to as `Sales Data')." Agreement § 2(A) (implying that the Card is physically present in order to read the magnetic strip). 16. The system of claim 10 wherein Under the Agreement, a merchant can accept a customer identifier electronically, for example, the accepting means comprises via a terminal. means for electronically accepting "Sales Data. Merchant shall evidence all sales and leases made through the use of Electronic the customer identifier. Data Capture ("EDC") services involving the honoring of Cards through the use of magnetic
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FIRST USA INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS PRIOR PUBLICATION REFERENCES strip reading terminals and execution of data on forms provided by Company (all such resulting sales data and electronic records being collectively referred to as `Sales Data')." Agreement § 2(A). 17. The system of claim 10 wherein the means at the merchant processor further comprise means for accumulating the payments until a predetermined amount is reached and means for forwarding at least a portion of the accumulated payments to the third party. Certain fees or charges, for example, are recurring and would be periodically deducted from credits due the merchant and forwarded to a computerized payment receiver of the party to whom the obligation is owed. See, e.g., Schedule A to Agreement, Plan A (Monthly Statement $9.00) and Plan B (Monthly Statement $6.00); Agreement § 2(D) (listing "equipment charges (installation or purchase)" as an example of a merchant obligation for which Company is authorized under the Agreement to periodically decrease merchant credits).2 "Debits to Merchants. Company is hereby authorized to decrease the credits above or debit the Account from time to time in payment for Merchant's obligations pursuant to this Agreement. Such decreases or debits shall include the applicable fees, charges and discounts set forth in Schedule A attached hereto, as well as adjustments and chargebacks, equipment charges (installation or purchase), Cardholder credits, and any fees, charges, fines, assessment, penalties, or other liabilities that may be imposed from time to time by applicable credit card associations. Monthly fees shall be due and payable on the first day of the following calendar month to which they are applicable, and Company may debit the Account or decrease credits for such fees on such date." Agreement § 2(D). On information and belief, these acts are implement using, at least in part, a computer running appropriate software program(s). 18. The system of claim 10 wherein Certain fees or charges, for example, are recurring and would be periodically deducted from the forwarding means at the credits due the merchant and forwarded to a computerized payment receiver of the party to merchant processor comprises whom the obligation is owed. See, e.g., Schedule A to Agreement, Plan A (Monthly Statement
2

At this pre-claim construction stage of the action, Defendants take no position as to the appropriateness of the claim construction applied in AdvanceMe's Preliminary Infringement Contentions for Defendants ("Infringement Contentions"), but note that under the approach in the Infringement Contentions, which equates periodic forwarding with accumulation to a predetermined amount, the system described in the Agreement anticipates this claim.

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FIRST USA INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS PRIOR PUBLICATION REFERENCES

means for periodically forwarding $9.00) and Plan B (Monthly Statement $6.00); Agreement § 2(D) (listing "equipment charges at least a portion of the payment to (installation or purchase)" as an example of a merchant obligation for which Company is the third party. authorized under the Agreement to periodically decrease merchant credits). "Debits to Merchants. Company is hereby authorized to decrease the credits above or debit the Account from time to time in payment for Merchant's obligations pursuant to this Agreement. Such decreases or debits shall include the applicable fees, charges and discounts set forth in Schedule A attached hereto, as well as adjustments and chargebacks, equipment charges (installation or purchase), Cardholder credits, and any fees, charges, fines, assessment, penalties, or other liabilities that may be imposed from time to time by applicable credit card associations. Monthly fees shall be due and payable on the first day of the following calendar month to which they are applicable, and Company may debit the Account or decrease credits for such fees on such date." Agreement § 2(D). On information and belief, the acts described in § 2(D) of the Agreement are implemented using, at least in part, a computer running appropriate software program(s). 19. The system of claim 10 wherein the forwarding means at the merchant processor comprises means for forwarding to the third party an amount that is a percentage of the obligation. The portion of the payment forwarded by First USA is a percentage of the merchant's obligation(s). On information and belief, these acts are implemented using, at least in part, a computer running appropriate software program(s). "Merchant shall maintain an account (the `Account') at a bank approved by Company. Merchant may not close the Account or reduce it below the minimum balances required by this Agreement. . . . If Company ever reasonably believes that the Account contains insufficient funds to cover debits to the Account, Merchant's obligations hereunder and/or any required minimum balance, then Company may do one or more of the following: . . . (ii) deduct or withhold from credits to Merchant such amounts as are necessary to cover the debits, obligations and minimum balance . . . ." Agreement § 2(B). "Debits to Merchants. Company is hereby authorized to decrease the credits above or debit the

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FIRST USA INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS PRIOR PUBLICATION REFERENCES Account from time to time in payment for Merchant's obligations pursuant to this Agreement. Such decreases or debits shall include the applicable fees, charges and discounts set forth in Schedule A attached hereto, as well as adjustments and chargebacks, equipment charges (installation or purchase), Cardholder credits, and any fees, charges, fines, assessment, penalties, or other liabilities that may be imposed from time to time by applicable credit card associations. Monthly fees shall be due and payable on the first day of the following calendar month to which they are applicable, and Company may debit the Account or decrease credits for such fees on such date." Agreement § 2(D). Certain fees or charges, for example, are recurring and would be periodically deducted from credits due the merchant and forwarded to a computerized payment receiver of the party to whom the obligation is owed. See, e.g., Schedule A to Agreement, Plan A (Monthly Statement $9.00) and Plan B (Monthly Statement $6.00); Agreement § 2(D) (listing "equipment charges (installation or purchase)" as an example of a merchant obligation for which Company is authorized under the Agreement to periodically decrease merchant credits). "Chargebacks. . . . If in any one month . . . then Company may take one or more of the following actions: (1) withhold from settlements to Merchant an amount reasonably determined by Company to be sufficient to cover anticipated chargebacks . . . ." Agreement § 2(F).

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LITLE & CO. INVALIDITY CLAIM CHART UNITED STATES PATENT NO. 6,941,281 CLAIMS 1. A method for automated payment, comprising: PRIOR PUBLICATION REFERENCES Litle & Co. ("Litle") utilized a met