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PI-Net International Inc. v. JPMorgan Chase & Co.

United States District Court, D. Delaware

April 7, 2014

JPMORGAN CHASE & CO., Defendant.

George Pazuniak, Esq. (argued), O'KELLY ERNST & BIELLI, LLC, Wilmington, DE. Attorney for Plaintiff Pi-Net International Inc.

Jessica Raatz, Esq., SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP, Wilmington, DE; Douglas R. Nemec, Esq. (argued), SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP, New York, NY; Edward L. Tulin, Esq., SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP, New York, NY; Andrew Gish, Esq., SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP, New York, NY. Attorneys for Defendant JPMorgan Chase & Co.


RICHARD G. ANDREWS, District Judge.

In March 2012, plaintiff Pi-Net International, Inc. filed patent infringement actions against Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith, Inc., JPMorgan Chase & Co., UBS Financial Services Inc., Sovereign Bank, N.A., and Citizens Financial Group, Inc. alleging infringement of U.S. Patent Nos. 5, 987, 500 (the '"500 patent"), 8, 037, 158 (the'" 158 patent"), and 8, 108, 492 (the '"492 patent"). The defendants sought leave to file the instant motion for partial summary judgment of indefiniteness, representing to the Court that a favorable resolution would "drastically reduce the scope of this case" by invalidating 90% of the asserted claims. (D.I. 45 at 2). Because of the potential for judicial efficiency, the Court granted the motion. (D.I. 58).

The defendants filed their motion for partial summary judgment on March 5, 2013. (D.I. 59). At issue are five terms found in many of the three patents' asserted claims. These terms are: 1) "means for transmitting a transaction request from said transactional application, " 2) "means for processing said transaction request, " 3) "a computer system executing the Back-end transactional application for processing the transaction request in real-time, " 4) "keeping a transaction flow captive, " and 5) "routed transactional data structure." (D.I. 60 at 1-2). JPMorgan[1] contends that the first two terms are computer-implemented means-plus-function terms for which no algorithm is disclosed. ( Id. ). The third term should be construed as a means-plus-function term, JPMorgan argues, because "computer system" does not connote sufficiently definite structure to a person having ordinary skill in the art ("PHOSITA"). ( Id. at 2). Finally, JPMorgan asserts that the last two terms are insolubly ambiguous because the patentee did not define them in the specification or the prosecution history and they do not have a generally accepted meaning to a PHOSITA. ( Id. ).

Pi-Net argues that all five terms are definite. Pi-net claims that the first term has a clearly identified structure in the specification, and no algorithm is required for the second term because the claimed function can be performed by a general purpose computer without special programming. (D.I. 66 at 10-13). The third term does not contain the word "means, " and Pi-Net maintains that JPMorgan has failed to overcome the accompanying rebuttable presumption against applying§ 112, ¶ 6 in this situation. ( Id. at 14-16). Pi-Net argues that the final two terms, which were added during the patents' prosecution to overcome prior art, have support in the specification and prosecution history. ( Id. at 16-18). In support of its position on each of the terms, Pi-Net submitted a declaration from its expert, Dr. Bardash. (D.I. 66-1).


"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). A "material fact" is one that "could affect the outcome" of the proceeding. See Lamont v. New Jersey, 637 F.3d 177, 181 (3d Cir. 2011). The moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.10 (1986). The court will "draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence." Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000).

If the moving party is able to demonstrate an absence of disputed material facts, the nonmoving party then "must come forward with specific facts showing that there is a genuine issue for trial.'" Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986); see also Matsushita, 475 U.S. at 587. The mere existence of some evidence in support of the nonmoving party, however, will not be sufficient for denial of a motion for summary judgment. Anderson, 477 U.S. at 249. Rather, the nonmoving party must present enough evidence to enable a jury to reasonably find for it on that issue. Id. If the nonmoving party fails to make a sufficient showing on an essential element of its case with respect to which it has the burden of proof, the moving party is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

Indefiniteness is a legal question that must be decided by the Court. Biomedino, LLC v. Waters Techs. Corp., 490 F.3d 946, 949 (Fed. Cir. 2007) ("A determination that a patent claim is invalid for failure to meet the definiteness requirement of 35 U.S.C § 112, paragraph 2, is a legal conclusion....'" (quoting Intellectual Prop. Dev., Inc. v. UA-Columbia Cablevision of Westchester, Inc., 336 F.3d 1308, 1318 (Fed. Cir. 2003))). All valid patents must "conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention." 35 U.S.C. § 112(b) (2012). The principal justification for the definiteness requirement "is to ensure that the claims are written in such a way that they give notice to the public of the extent of the legal protection afforded by the patent, so that interested members of the public, e.g., competitors of the patent owner, can determine whether or not they infringe." All Dental Prodx, LLC v. Advantage Dental Prods., Inc., 309 F.3d 774, 779-80 (Fed. Cir. 2002).

This requirement "does not compel absolute clarity, " and "[o]nly claims not amenable to construction' or insolubly ambiguous' are indefinite." Datamize, LLC v. Plumtree Software, Inc., 417 F.3d 1342, 1347-48 (Fed. Cir. 2005) ("[W]e also follow the requirement that clear and convincing evidence be shown to invalidate a patent."). Indeed, a claim will be found sufficiently definite so long as "one skilled in the art would understand the bounds of the claim when read in light of the specification." Exxon Research & Eng'g Co. v. United States, 265 F.3d 1371, 1375 (Fed. Cir. 2001) ("If the meaning of the claim is discernible, even though the task may be formidable and the conclusion may be one over which reasonable persons will disagree, we have held the claim sufficiently clear to avoid invalidity on indefiniteness grounds.").

An additional set of principles governs the determination of definiteness for means-plus-function terms. The Federal Circuit has recognized a presumption in favor of applying 35 U.S.C. § 112, ¶ 6[2] whenever the word "means" is used in the claim language to describe a limitation. See Net MoneyIN, Inc. v. Verisign, Inc., 545 F.3d 1359, 1366 (Fed. Cir. 2008) ("A claim element that contains the word means' and recites a function is presumed to be drafted in means-plus-function format under 35 U.S.C. § 112 ¶ 6."). The presumption can be overcome "where the claim, in addition to the functional language, recites structure sufficient to perform the claimed function in its entirety." Altiris, Inc. v. Symantec Corp., 318 F.3d 1363, 1375 (Fed. Cir. 2003). In order for there to be sufficient structure, the claim language must specify "the exact structure that performs the functions in question without need to resort to other portions of the specification or extrinsic evidence for an adequate understanding of the structure." TriMed, Inc. v. Stryker Corp., 514 F.3d 1256, 1259-60 (Fed. Cir. 2008).

Once it has been determined that the term is written as a means-plus-function limitation, courts employ a two-part test to construe the term. First, the court is required to determine the claimed function. Applied Med. Res. Corp. v. U.S. Surgical Corp., 448 F.3d 1324, 1332 (Fed. Cir. 2006). The second step is to "identify the corresponding structure in the written description of the patent that performs that function." Id. The identified structure is required to "permit one of ordinary skill in the art to know and understand what structure corresponds to the means limitation.'" Finisher Corp. v. DirecTV Grp., Inc., 523 F.3d 1323, 1340 (Fed. Cir. 2008) (quoting Biomedino, LLC v. Waters Techs. Corp., 490 F.3d 946, 950 (Fed. Cir. 2007)). Otherwise, the term is invalid. Id.

In the special case where the corresponding structure of a means-plus-function term is a computer, the patent must disclose an algorithm for performing the claimed function. "[S]imply disclosing a computer as the structure designated to perform a particular function" is insufficient to limit the scope of the claim under§ 112, ¶ 6 because "a general purpose computer programmed to carry out a particular algorithm creates a new machine'...." Aristocrat Techs. Austl. Pty Ltd. v. Int'l Game Tech., 521 F.3d 1328, 1333 (Fed. Cir. 2008) ("[A] general purpose computer in effect becomes a special purpose computer once it is programmed to ...

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