Stored Value Salutions, Inc. v. Card Activation Technologies, Inc.
499 F. App'x 5 (2012)
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Rule of Law:
A patent claim is invalid for lack of written description under 35 U.S.C. § 112 if the specification, as originally filed, does not demonstrate that the inventor was in possession of the specific combination of elements later claimed. Additionally, a claim is invalid as anticipated under 35 U.S.C. § 102 if every limitation of the claim is disclosed, either expressly or inherently, in a single prior art reference.
Facts:
- Card Activation Technologies, Inc. (CAT) is the owner of U.S. Patent 6,032,859 ('the '859 patent'), which discloses a method for processing debit card transactions at a point-of-sale terminal.
- The patent's claims involve various combinations of three distinct types of authorization codes: a general authorization code, a clerk authorization code, and a customer authorization code.
- During a reexamination proceeding with the U.S. Patent and Trademark Office, CAT amended independent claims 20 and 29 to require the entry of all three authorization codes (general, clerk, and customer) to overcome a rejection.
- The original specification of the '859 patent described several embodiments of the invention, but none of them disclosed a method that required the use of all three authorization codes together in a single transaction process.
- A software reference manual from Micro-Trax Ltd., bearing copyright dates of 1994 and 1995, described an electronic payment system for retailers.
- The MicroTrax Manual detailed a process that included the entry of a 'checker ID' to enable a terminal to accept electronic payments.
- The MicroTrax software was installed and operational in approximately 30 stores in California as early as 1989.
Procedural Posture:
- Stored Value Solutions, Inc. (SVS) filed a declaratory judgment action against Card Activation Technologies, Inc. (CAT) in the U.S. District Court for the District of Delaware, seeking a judgment that the '859 patent was invalid.
- During the litigation, the U.S. Patent and Trademark Office granted a request for reexamination of the '859 patent, in which CAT amended several claims to overcome a rejection based on prior art.
- The district court conducted claim construction proceedings, adopting a magistrate judge's report.
- SVS filed a motion for partial summary judgment of invalidity, arguing certain claims were anticipated.
- The district court, on its own initiative, requested briefing on whether the amended claims were invalid for lack of written description.
- The district court granted SVS's motion for partial summary judgment, ruling that claims 20, 22-31, and 33-38 were invalid for lack of written description.
- The district court also granted SVS's motion for partial summary judgment finding claims 1-3, 5-7, 9-14, and 16-19 were invalid due to anticipation by the MicroTrax Manual.
- CAT, the defendant-patentee, appealed the district court's grants of summary judgment to the U.S. Court of Appeals for the Federal Circuit.
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Issue:
Does a patent claim lack adequate written description when it is amended during reexamination to include a combination of three authorization codes that was never disclosed in the original specification, and are other claims anticipated by a prior art software manual that discloses each and every claim limitation?
Opinions:
Majority - Lourie, Circuit Judge.
Yes, the amended claims are invalid for lack of written description and the other challenged claims are invalid as anticipated. To satisfy the written description requirement of 35 U.S.C. § 112, the specification must show that the inventor was in possession of the invention as it is ultimately claimed. CAT amended claims 20 and 29 to require a method using three distinct authorization codes, but the original specification contains no disclosure of any method that includes all three codes together. Because the presence of all three codes was essential to the claims surviving reexamination, and this combination was not described in the original patent, the amended claims are invalid. Regarding anticipation, a single prior art reference that discloses every claim limitation renders a claim invalid under 35 U.S.C. § 102(a). The MicroTrax Manual, properly established as prior art through its copyright dates and corroborating testimony, discloses every element of the other challenged claims. Specifically, the 'checker ID' described in the manual performs the same function as the 'clerk authorization code' required by the claims—it permits the initiation of a debit purchase transaction—and thus anticipates the invention.
Analysis:
This decision reinforces the high bar for satisfying the written description requirement, especially when claims are amended during prosecution or reexamination. It serves as a critical reminder that adding a new combination of existing elements to a claim can render it invalid if that specific combination is not described in the original specification. The case underscores that patentees cannot use amendments to claim an invention they did not contemplate at the time of filing. Furthermore, the ruling illustrates a straightforward application of anticipation, confirming that a feature in a prior art reference need not use the exact same terminology as a patent claim as long as it performs the identical function as construed by the court.
