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Pi-Net International, Inc. v. JPMorgan Chase & Co.

United States District Court, D. Delaware

May 14, 2014


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George Pazuniak, Esquire of O'Kelly Ernst & Bielli, LLC, Wilmington, Delaware, Counsel for Plaintiff.

Robert Scott Saunders, Esquire and Jessica Raatz, Esquire of Skadden, Arps, Slate, Meagher & Flom LLP, Wilmington, Delaware, Counsel for Defendant. Of Danie A. DeVito, Esquire, Douglas R. Nemec, Esquire, Edward L. Tulin, Esquire and Andrew Gish, Esquire of Skadden, Arps, Slate, Meagher & Flom LLP.

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Sue L. Robinson, District Judge.


Plaintiff Pi-Net International, Inc. (" plaintiff" ) filed a complaint alleging patent infringement against JPMorgan Chase & Co. (" defendant" ) on March 1, 2012 alleging infringement of three patents: U.S. Patent Nos. 5,987,500 (" the '500 patent" ), 8,037,158 (" the '158 patent" ), and 8,108,492 (" the '492 patent" ) (collectively, the " patents-in-suit" ). (D.I. 1) Defendant answered the complaint, asserting affirmative defenses of invalidity and non-infringement, on May 23, 2012. (D.I. 11)

Presently before the court are several motions for summary judgment: defendant's motion for summary judgment of non-infringement (D.I. 113) and for invalidity of the patents-in-suit (D.I. 121), as well as defendant's motion for partial summary judgment of laches for the '500 patent (D.I. 111). Plaintiff moved to strike defendant's opening brief in support of its partial summary judgment of laches for the '500 patent. (D.I. 132) The parties also filed motions to exclude testimony: defendant's motion to exclude certain testimony of Stevan Porter (D.I. 109) and plaintiffs motions to exclude the expert testimony of Susan Spielman (D.I. 115), certain testimony by Michael Siegel (D.I. 117), and certain testimony by Dawn Hall (D.I. 119). The court has jurisdiction over this matter pursuant to 28 U.S.C. § § 1331 and 1338(a).


A. The Parties

Plaintiff is a California corporation with a principal place of business in Menlo Park, California. (D.I. 1 at ¶ 1) Plaintiff provides innovative software products, services and solutions that enable distributed transaction processing and control over public and private networks, including (without limitation) the Internet and the World-Wide Web. Plaintiff owns the patents-in-suit. ( Id. ) Defendant is a Delaware corporation with a registered agent in Wilmington, Delaware and an office in New York, New York. (D.I. 11 at ¶ 3) Defendant is a global financial services firm that operates in various locations, including the United States of America, conducting business in the fields of investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, asset management, and private equity. ( Id. )

B. Technology Overview

The patents-in-suit generally claim a system and method for online transactions, wherein a user takes an action at the " front-end" that causes data to be routed through a system and used as a basis to execute a transaction at the " back-end," thereby completing a non-deferred (or " real time" ) transaction. Plaintiff accuses six online banking instrumentalities of infringing the '500 patent and the '492 patent: Account Transfers; Payments; Customer Center; Account Activity (Business Card); Wire Transfers; and Chase Mobile Application, QuickPaysm (" Mobile QuickPay" ). Only the Account Transfers instrumentality is accused of infringing the '158 patent.

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With the exception of Mobile QuickPay, all of the accused instrumentalities are accessible to defendant's customers through its website. (D.I. 114 at 4-5)


A. Summary Judgment

" 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). 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, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). A party asserting that a fact cannot be--or, alternatively, is--genuinely disputed must support the assertion either by citing to " particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for the purposes of the motions only), admissions, interrogatory answers, or other materials," or by " showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed.R.Civ.P. 56(c)(1)(A) & (B). If the moving party has carried its burden, the nonmovant must then " come forward with specific facts showing that there is a genuine issue for trial." Matsushita, 475 U.S. at 587 (internal quotation marks omitted). 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, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000).

To defeat a motion for summary judgment, the non-moving party must " do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586-87; see also Podohnik v. U.S. Postal Service, 409 F.3d 584, 594 (3d Cir. 2005) (stating party opposing summary judgment " must present more than just bare assertions, conclusory allegations or suspicions to show the existence of a genuine issue" ) (internal quotation marks omitted). Although the " mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment," a factual dispute is genuine where " the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). " If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Id. at 249-50 (internal citations omitted); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (stating entry of summary judgment is mandated " against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial" ).

B. Infringement

A patent is infringed when a person " without authority makes, uses or sells any patented invention, within the United States . . . during the term of the patent." 35 U.S.C. § 271(a). A two-step analysis is employed in making an infringement determination. See Markman v. Westview Instruments, Inc., 52 F.3d 967, 976 (Fed. Cir. 1995). First, the court must construe the asserted claims to ascertain their meaning and scope. See id. Construction of the claims is a question of law subject to

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de novo review. See Cybor Corp. v. FAS Techs., 138 F.3d 1448, 1454 (Fed. Cir. 1998). The trier of fact must then compare the properly construed claims with the accused infringing product. See Markman, 52 F.3d at 976. This second step is a question of fact. See Bai v. L & L Wings, Inc., 160 F.3d 1350, 1353 (Fed. Cir. 1998).

" Direct infringement requires a party to perform each and every step or element of a claimed method or product." BMC Res., Inc. v. Paymentech, L.P., 498 F.3d 1373, 1378 (Fed. Cir. 2007), overruled on other grounds by 692 F.3d 1301 (Fed. Cir. 2012). " If any claim limitation is absent from the accused device, there is no literal infringement as a matter of law." Bayer AG v. Elan Pharm. Research Corp., 212 F.3d 1241, 1247 (Fed. Cir. 2000). If an accused product does not infringe an independent claim, it also does not infringe any claim depending thereon. See Wahpeton Canvas Co. v. Frontier, Inc., 870 F.2d 1546, 1553 (Fed. Cir. 1989). However, " [o]ne may infringe an independent claim and not infringe a claim dependent on that claim." Monsanto Co. v. Syngenta Seeds, Inc., 503 F.3d 1352, 1359 (Fed. Cir. 2007) (quoting Wahpeton Canvas, 870 F.2d at 1552) (internal quotations omitted). A product that does not literally infringe a patent claim may still infringe under the doctrine of equivalents if the differences between an individual limitation of the claimed invention and an element of the accused product are insubstantial. See Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 24, 117 S.Ct. 1040, 137 L.Ed.2d 146 (1997). The patent owner has the burden of proving infringement and must meet its burden by a preponderance of the evidence. See SmithKline Diagnostics, Inc. v. Helena Lab. Corp., 859 F.2d 878, 889 (Fed. Cir. 1988) (citations omitted).

When an accused infringer moves for summary judgment of non-infringement, such relief may be granted only if one or more limitations of the claim in question does not read on an element of the accused product, either literally or under the doctrine of equivalents. See Chimie v. PPG Indus., Inc., 402 F.3d 1371, 1376 (Fed. Cir. 2005); see also TechSearch, L.L.C. v. Intel Corp., 286 F.3d 1360, 1369 (Fed. Cir. 2002) (" Summary judgment of noninfringement is ... appropriate where the patent owner's proof is deficient in meeting an essential part of the legal standard for infringement, because such failure will render all other facts immaterial." ). Thus, summary judgment of non-infringement can only be granted if, after viewing the facts in the light most favorable to the non-movant, there is no genuine issue as to whether the accused product is covered by the claims (as construed by the court). See Pitney Bowes, Inc. v. Hewlett--Packard Co., 182 F.3d 1298, 1304 (Fed. Cir. 1999).

C. Invalidity

1. Indefiniteness

The definiteness requirement is rooted in § 112, ¶ 2, which provides that " the specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention." " A determination of claim indefiniteness is a legal conclusion that is drawn from the court's performance of its duty as the construer of patent claims." Personalized Media Comm., LLC v. Int'l Trade Com'n, 161 F.3d 696, 705 (Fed. Cir. 1998).

Determining whether a claim is definite requires an analysis of whether one skilled in the art would understand the bounds of the claim when read in light of the specification . . . If the claims read in light of the specification reasonably

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apprise those skilled in the art of the scope of the invention, § 112 demands no more.

Id. (citing Miles Labs., Inc. v. Shandon, Inc., 997 F.2d 870, 875 (Fed. Cir. 1993)).

Under 35 U.S.C. § 112 ¶ 6, " [a]n element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure ... in support thereof, and such claim shall be construed to cover the corresponding structure ... described in the specification and equivalents thereof." This allows " the use of means expressions in patent claims without requiring the patentee to recite in the claims all possible structures that could be used as means in the claimed apparatus." Medical Instrumentation and Diagnostics Corp. v. Elekta AB, 344 F.3d 1205, 1211 (Fed. Cir. 2003) (citing O.I. Corp. v. Tekmar Co., 115 F.3d 1576, 1583 (Fed. Cir. 1997)). The quid pro quo is the " duty [of the patentee] to clearly link or associate structure to the claimed function." Budde v. Harley-Davidson, Inc., 250 F.3d 1369, 1377 (Fed. Cir. 2001) (citations omitted). " The price that must be paid for use of that convenience is limitation of the claim to the means specified in the written description and equivalents thereof." O.I. Corp., 115 F.3d at 1583.

Whether the written description adequately sets forth the structure corresponding to the claimed function must be considered from the perspective of a person skilled in the art. Telcordia Techs., Inc. v. Cisco Sys., 612 F.3d 1365, 1376 (Fed. Cir. 2010) (citing Intel Corp. v. VIA Techs., Inc., 319 F.3d 1357, 1365-66 (Fed. Cir. 2003)). " The question is not whether one of skill in the art would be capable of implementing a structure to perform the function, but whether that person would understand the written description itself to disclose such a structure." Id. (citing Tech. Licensing Corp. v. Videotek, Inc., 545 F.3d 1316, 1338 (Fed. Cir. 2008). Ultimately, if no corresponding structure is disclosed in the specification, the claim term must be construed as indefinite. See Biomedino, LLC v. Waters Techs. Corp., 490 F.3d 946, 950 (Fed. Cir. 2007) (" If there is no structure in the specification corresponding to the means-plus-function limitation in the claims, the claim will be found invalid as indefinite." ).

2. Enablement and written description

The statutory basis for the enablement and written description requirements, 35 U.S.C. § 112 ¶ 1, provides in relevant part:

The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with ...

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