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Court Overturns’s Preliminary Injunction Against

February 14, 2001
Sukduang, Sanya

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Last Month at the Federal Circuit - March 2001

Judges: Clevenger (author), Gajarsa, and Linn

In, Inc. v., Inc., No. 00-1109 (Fed. Cir. Feb. 14, 2001), the Federal Circuit vacated a district court’s grant of a preliminary injunction to, Inc. (“Amazon”) that had prohibited, Inc. (“BN”) from using a “single action” ordering feature on its website.

Amazon’s U.S. Patent No. 5,960,411 (“the ‘411 patent”) covers a method and system by which a consumer can complete a purchase order in a client/server environment, such as the Internet, using a “single action,” such as the click of a mouse, after information about the item to be purchased has been displayed. Amazon developed this technology to cope with the frustrations it associated with the “shopping cart model” purchase system, which requires several steps before a purchase order is completed.

Amazon alleged that BN’s “Express Lane” feature on its website infringes certain claims of the ‘411 patent. The district court had concluded that since only a single action is needed to complete a purchase order on the BN website, Amazon had made a showing of likelihood of success on its allegation of patent infringement. The district court had also held that BN’s challenges to the validity of the ‘411 patent lacked sufficient merit to prevent the entry of a preliminary injunction.

In reviewing the district court’s entry of the preliminary injunction, the Federal Circuit focused its attention on the “single action” limitation present in all the asserted claims and the prerequisites necessary for entry of a preliminary injunction. Clarifying the district court’s construction of the phrase “single action,” the Federal Circuit stated that a single-action ordering step must be possible after some display of information, but not necessarily after the first display or every display of information. Under this proper claim construction, the Federal Circuit determined that Amazon had successfully made a showing that BN’s “Express Lane” feature infringes the ‘411 patent, thus satisfying the “likelihood of success” prerequisite necessary for the entry of a preliminary injunction.

Turning to the question of validity, the Federal Circuit held that the district court had committed clear error by misreading the factual content of the prior art references cited by BN and by failing to recognize that BN’s prior art references raise a substantial question as to the validity of the ‘411 patent. According to the Federal Circuit, the district court had improperly limited its validity analysis to whether the references cited by BN recite each and every limitation of the claims-in-suit. The proper inquiry at the preliminary injunction stage, according to the Court, however, is not whether the cited references establish invalidity by clear and convincing evidence, but whether the cited references, alone or in combination, disclose enough to raise a substantial question as to the validity of the asserted claims.

The Federal Circuit ruled that the prior art cited by BN could either anticipate the claims of the ‘411 patent or render the claims obvious, thereby raising a substantial question of invalidity. According to the Court, for example, the “CompuServe Trend” system appears to have used single-action ordering technology within the claims of the ‘411 patent. The “CompuServe Trend” system allows a customer to complete the purchase of a stock chart with a single action (a click of a button within the web page) once the item to be purchased has been displayed.

Moreover, the “Web Basket” system uses the Internet Engineering Task Force draft “cookie” specification, which allows for the storage of a customer identifier in a cookie for later retrieval. The Federal Circuit concluded that the district court had failed to recognize that this feature of the “Web Basket” system could anticipate and/or render obvious the step of “retrieving additional information previously stored for the purchaser identified by the identifier in the received request,” as recited in claim 1.

BN also cited, as anticipatory prior art, an excerpt from a book copyrighted in 1996 entitled “Creating the Virtual Store.” Although the reference, in general, discusses software to create a shopping-cart ordering model, it does disclose an “Instant Buy Option,” which, the Court concluded, suggests the elimination of the check-out review step when users already know the single item they want to purchase. The Federal Circuit stated that this reference, viewed in light of the other cited references, could motivate a skilled artisan to modify the shopping-cart ordering software to skip unnecessary steps.

In sum, the Federal Circuit concluded that the prior art had yet to be developed through discovery, but still raised enough questions at this point to make the claims vulnerable to attack.

Accordingly, although Amazon had carried its burden of demonstrating a likelihood of success on infringement, the prior art references cited by BN raised a substantial question as to the validity of the ‘411 patent, precluding entry of a preliminary injunction. The Federal Circuit clarified, however, that its decision only undermines the prerequisite for entry of a preliminary injunction and in no way resolves the ultimate question of invalidity.