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Summary Judgment of Noninfringement on Remand Is Proper, Even After Vacature of First Grant of Summary Judgment of Noninfringement

January 12, 2007

Decision icon Decision

Last Month at the Federal Circuit - February 2007

Judges: Michel, Linn (author), Prost

[Appealed from: N.D. Cal., Judge Jensen]

In E-Pass Technologies, Inc. v. 3Com Corp., Nos. 06-1356, -1357, -1358 (Fed. Cir. Jan. 12, 2007), the Federal Circuit affirmed the district court’s grant of SJ of noninfringement in favor of 3Com Corporation and other defendants.

E-Pass Technologies, Inc. (“E-Pass”) owns U.S. Patent No. 5,276,311, involving methods for using a single electronic multi-function card in lieu of multiple data sources. E-Pass initially sued 3Com Corporation and Palm, Inc. (collectively “3Com”) for inducing infringement by providing personal digital assistant (“PDA”) devices, specifically the Palm VII and Palm VIIx. The asserted independent claim 1, directed to “a method for enabling a user of an electronic multi-function card to select from a plurality of data sources,” included multiple, sequential steps involving this “electronic multi-function card.” After the district court granted SJ of noninfringement, 3Com appealed.

In an earlier appeal, the Federal Circuit held that the district court had erred in construing the term “electronic multi-function card,” and construed the term “card” as “a flat rectangular piece of stiff material.” The Federal Circuit then vacated and remanded to the district court to address infringement. On remand, E-Pass filed other infringement actions against Visa U.S.A., Inc. and Visa International Service Association (collectively “Visa”). Applying the Federal Circuit’s construction of “card,” the district court again granted SJ of noninfringement in favor of 3Com and Visa. E-Pass appealed.

On appeal, the Federal Circuit affirmed the district court’s granting of SJ, first addressing whether the district court had the authority to rule on motions for SJ on remand. E-Pass asserted SJ was improper because the Federal Court’s earlier decision indicated that issues of material fact remained. Specifically, E-Pass relied on the Federal Circuit’s earlier statement that under the proper construction of the term “card,” issues of material fact remained for literal and DOE infringement. The Federal Circuit disagreed, finding that the context of that statement and the balance of the opinion signaled otherwise. Indeed, the Federal Circuit noted that “a proper claim construction might support a judgment (summary or otherwise) in favor of either party, depending on the evidence and argument submitted to the district court on remand and considered by the district court in the first instance.” Slip op. at 6. Moreover, the Federal Circuit noted that the pre-remand record before the district court did not have evidence supporting infringement and noninfringement contentions in view of the proper claim construction of the term “card.”

Next, the Federal Circuit held that the district court correctly observed that every flat piece of rectangular material is not necessarily a card and properly articulated the infringement question: can a reasonable jury consider any of the accused devices a “card” defined according to its ordinary meaning?

The Federal Circuit affirmed the SJ of literal infringement, agreeing that the accused devices were neither flat nor rectangular and that none of the accused devices could be considered a “card.” Indeed, the Court agreed that a reasonable juror would not find that the accused devices are stiff material, citing the district court’s description of the accused devices as containing buttons, joysticks, keyboards, and other physical characteristics.

The Federal Circuit also upheld the grant of SJ of noninfringement under the DOE because E-Pass failed to meet its burden of proof on the question of whether anyone has practiced the claimed steps. The Federal Circuit reviewed the claim language, noting that each step must be practiced sequentially. E-Pass presented three types of evidence: (1) Visa documents showing that Visa was interested in payment systems using PDA devices and plans to demonstrate payment systems, (2) business analyses of contactless payment proposals, and (3) portions of the product manuals for the accused devices.

As to the Visa documents, the Federal Circuit noted that the documents did not demonstrate that the claimed steps were ever performed. As to the proposals, the Federal Circuit found these insufficient because there was no evidence that the proposed systems were implemented. Finally, as to the product manuals, the Federal Circuit decided that portions of these manuals show “at best, that the Palm defendants taught their customers each step of the claimed method in isolation. Nowhere do the manual excerpts teach all of the steps of the claimed method together, much less in the required order.” Id. at 15. Because E-Pass provided insufficient evidence to defeat a SJ motion, the Federal Circuit affirmed the district court’s grant of SJ of noninfringement.