Every Penny Counts Inc. v. American Express Co.

1. Case Name
Every Penny Counts, Inc. v. American Express Co.

2. Case Cite
Every Penny Counts, Inc. v. American Express Co. 563 F.3d 1378 (C.A.Fed. (Fla.),2009)

3. Facts of the case
EPC holds 5 patents pertaining to methods of automatically depositing the change from a purchase transaction into a charitable or savings account.

EPC brought two patent infringement suits against two groups of defendants ("Open Gift Card" and "Closed Gift Card" Defendants) pertaining to U.S. Patent No. 5,621,640. The other patents-in-suit are U.S. Patent Nos. 6,088,682; 6,876,976; and 7,171,370. EPC alleges that the defendant's infringe because both types of gift cards involve a means of loading value onto accounts at a point of sale terminal.

Gift cards can be used instead of cash to complete retail transactions. Open gift cards can be used at multiple different vendors. Closed gift cards are restricted to use in one particular vendor.

The lower court held a joint Markman hearing to construe terms in the patents. The term "excess cash" was agreed to be a dispositive term in each patent. EPC proposed that "excess cash" be construed as: an amount ... offered in excess of the sale price of merchandise. During the hearing, the issue of construing "sale price" came up. EPC proposed that it meant "the portion of a transaction that a merchant would account for as a sale." It proposed that the sale price could be as low as $0 based on accounting practices merchants practice with gift cards. EPC did not present evidence in support of its interpretation of sale price.

The court wound up adopted the definition proposed by the open gift card defendants: amount selected by the payor beyond the total amount due at the point of sale. EPC stipulated that under that definition, neither defendant was infringing.

On appeal, EPC argues that the lower court erred by 1) spending time construing the term "sale price," which does not appear in the patent and 2)using the accused infringing products to tailor the construction of the claims such that there would be no infringement.

The court noted that EPC defined "excess cash" in terms of "sale price" and that it was strange that EPC would question the court for trying to clarify a term that EPC introduced into the definition.

4. Procedural Posture

Appeal from two final judgments by the lower court at which EPC stipulated to the entry of the judgments after the Markman claim construction Hearing.

5. Holding
Construction disputes are reviewed de novo. The construction that stays true to the claim language and most naturally aligns with the patent's description will control. In order to construe claims, the court must examine the term as used in the claims, the spec, and the prosecution history first. The primary basis for construing claims is the spec. A court may not use an accused product for the sole purpose of arriving at a construction of claim terms that would make it impossible tor the plaintiff to show infringement. However, asking parties for their interpretation of a term in the context of hypothetical questions is appropriate. Especially when the court does so to gain knowledge of the product. Thus, the lower court correctly construed the terms in question based on the intrinsic evidence.

6. Important Dicta
"There are times when "we need to interpret interpretations more than to interpret things."

7. Likely future importance or unanswered questions

8. Critical Analysis
The judge uses language and tone that indicates that he/she is not too impressed with the Plaintiff or his invention to begin with.

It seems as though had EPC defined "sale price" either explicitly (as lexicographer) or implicitly in the patent, they may have been able to win. Unfortunately the didn't really appear to conceive of that definition or concept when they drafted their claims. In that light, it seems more like EPC is reaching to expand the scope of its claims here. If that is the case, then the court definitely did its job by allowing EPC to protect only what it had invented, not what it thought it should have invented.

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