United States District Court, D. Nebraska
CLAIM CONSTRUCTION ORDER
JOSEPH F. BATAILLON SENIOR UNITED STATES DISTRICT JUDGE
This matter is before the Court on the issue of patent claim construction pursuant to Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996).
This litigation involves allegations by plaintiff Joao Bock Transaction Systems, LLC (hereinafter, "Joao Bock") that the defendant Online Resources Corp. (hereinafter, "Online") infringed numerous claims of Joao Bock's Patent No. 7, 096, 003 ("the '003 patent") in its online banking, mobile banking, bill pay, and presentment services. The '003 Patent, entitled “Transaction Security Apparatus, ” was issued on April 22, 2006.
The patent pertains to:
a financial transaction and/or wireless communication device authorization, notification and/or security apparatus and method, and, in particular to a financial transaction and/or wireless communication device authorization, notification and/or security apparatus and method for use in providing authorization, notification and/or security in conjunction with credit card, charge card and/or debit card use, savings and/or checking account activity and/or cellular telephone use.
Filing No. 1, Complaint, Ex. A, '003 Patent at ECF p.24.
The ′003 Patent is part of the same family of patents as U.S. Patent No. 6, 529, 725 (the ′725 Patent) and U.S. Patent No. 6, 047, 270 (the '270 patent). Joao Bock Transaction Sys., LLC v. Fidelity Nat'l Info. Servs., Inc., No. 3:13-CV-223-J-32JRK, 2015 WL 4743669, at *12 n.2 (M.D. Fla. Aug. 10, 2015), appeal docketed, No. 15-1956 (Fed. Cir. Aug. 28, 2015) (hereinafter, "FNIS"). The '725 Patent relates to a device that provides online notification to an account holder that a transaction is occurring on his bank account. Joao Bock Transactions Sys, LLC, v. First Nat'l Bank, No. 11 C 6472, 2013 WL 3199981, *1 (N.D. Ill. June 24, 2013) ("First Nat'l Bank (Markman)"). The '725 Patent was issued on March 4, 2003 from an application filed on October 9, 1998, but claimed priority to the same August 8, 1996 application as the ′270 and ′003 Patents. FNIS, 2015 WL 4743669, at *12 n. 2.
The '270 Patent relates to methods and systems that provide electronic account security which is accomplished by "(a) allowing restrictions to be placed on an electronic account; and/or (b) providing an account user notification of transactions; and/or (c) generating transaction records for an account user or account." First Nat'l Bank, 2013 WL 3199981, at *1. The '270 Patent and the '003 Patent contain very similar specifications and generally disclose the same invention-"the relevant distinction between the two is that the ′003 Patent specifically teaches using the Internet, the World Wide Web, email, and wireless devices to facilitate the monitoring and/or authorization described in the ′270 Patent." FNIS, 2015 WL 4743669, at *1.
Several terms in the related patents have been construed by other courts. Joao v. Sleepy Hollow Bank, 348 F.Supp.2d 120, 124-30 (S.D. N.Y. 2004)("Sleepy Hollow (Markman I")); Joao v. Sleepy Hollow Bank, 418 F.Supp.2d 578, 582-88 (S.D.N.Y. 2006)("Sleepy Hollow (Markman II")); Joao v. Sleepy Hollow Bank, No. 03CV10199, 2006 WL 6164178, *1-2 (S.D.N.Y. June 15, 2006)("Sleepy Hollow (Markman II Supplement")) (all involving '725 Patent); First Nat. Bank, 2013 WL 3199981, at *3-*17 (“Markman Order”) (involving '270 Patent); Joao Bock Transaction Sys., LLC v. Jack Henry & Associates, Inc., No. CV 12-1138-SLR, 2014 WL 2960363, at *3-10 (D. Del. June 30, 2014) ("Jack Henry (Markman)") (involving '003 Patent). Certain claims of each of the patents have been found invalid. Joao Bock Transaction Sys., LLC v. Jack Henry & Associates, Inc., 76 F.Supp.3d 513, 521 (D. Del. 2014), aff'd, 803 F.3d 667 (Fed. Cir. 2015) (per curiam) ("Jack Henry (invalidity order)"); FNIS, 2015 WL 4743669, at *6-*12 (M.D. Fla. Aug. 10, 2015 (involving the '270 and '003 Patents); Joao Bock Transaction Sys., LLC v. Sleepy Hollow Bank, No. 3:03-cv-10199 (WWE), slip. op (S.D.N.Y. July 21, 2010), aff'd, 445 Fed.App'x 359 (Fed. Cir. 2011).
Relevant facts are set forth in earlier orders and need not be repeated herein. See Filing No. 135, Memorandum and Order (sealed) at 2-9; Filing No. 136, Memorandum and Order at 2-3; Filing No. 176, Order at 1-4. Earlier in this action, Joao Bock agreed not to pursue the five claims it asserts herein (102, 106, 317, 324 and 343) that were invalidated in Jack Henry, 76 F.Supp.3d at 521. In recent briefing on Online's notice of additional authority, Joao Bock indicates that it will not assert infringement with respect to the claims declared invalid in FNIS, 2015 WL 4743669 at *2. See Filing No. 201, Response at 1-2. As a result of those concessions, the following claims remain at issue: independent claims 100, 137, 169, 222, 288, and 375; and dependent claims 129, 153, 159, 170, 189, 231, 239, 242, 243, 249, 297, 298, 300, 304, 311, 376, 377, 383, 389, 391, 395, 397, 399, 400 and 407.
The parties have submitted a Joint Claim Construction Statement in connection with 21 terms in the patent. See Filing No. 100-1, Joint Claim Construction Statement. In view of the changed posture of the case, Claim Terms No. 7, 13, and 16 through 21 are no longer at issue. Id.
In support of its proposed claim constructions, Joao Bock submits copies of amendments submitted to the United States Patent and Trademark Office ("PTO") in 2004 and 2005 as part of the application for the '003 Patent. Filing No. 103, Index of Evid., Declaration of Maureen Abbey, Exs. A-D. Online submits extrinsic evidence in support of its proposed construction of the term "network computer." Filing No. 111-1, Index of Evid., Affidavit of Gregory C. Scaglione, Ex. A, copies of internet publications from the 1995-96 time period.
II. Principles of Claim Construction
Claim construction falls “exclusively within the province of the court, ” not that of the jury. Teva Pharm. USA, Inc. v. Sandoz, Inc., 135 S.Ct. 831, 837 (2015) (quoting Markman, 517 U.S. at 370). It is proper for courts to "treat the ultimate question of the proper construction of the patent as a question of law in the way that [courts] treat document construction as a question of law." Id. at 837, 841 (noting that when the court relies solely upon the intrinsic evidence-the patent claims, the specification, and the prosecution history-the court's construction is a determination of law, however, underlying factual determinations are reviewed for clear error).
The claims of a patent define the scope of the patent. Phillips v. AWH Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005) (en banc). The claims of a patent are of primary importance in determining what is patentable and the function and purpose of a claim is to “delimit the right to exclude.” Id.The purpose of claim construction is to “determin[e] the meaning and scope of the patent claims asserted to be infringed.” Markman v. Westview Instruments, Inc., 52 F.3d 967, 976 (Fed. Cir. 1995) (en banc), aff'd, 517 U.S. 370 (1996). A claim construction order will dictate how the court will instruct the jury regarding a claim’s scope. O2 Micro Int’l Ltd. v. Beyond Innovation Technology Co., Ltd., 521 F.3d 1351, 1359 (Fed. Cir. 2008).
The process of construing a claim term begins with the words of the claims. Phillips, 415 F.3d at 1312-14; Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996). Absent contravening evidence from the specification or prosecution history, plain and unambiguous claim language controls the construction analysis. DSW, Inc. v. Shoe Pavilion, Inc., 537 F.3d 1342, 1347 (Fed. Cir. 2008). However, the claims “must be read in view of the specification, of which they are a part.” Phillips, 415 F.3d at 1315 (quoting Markman, 52 F.3d at 979); see Tempo Lighting, Inc. v. Tivoli, LLC, 742 F.3d 973, 977 (Fed. Cir. 2014) (stating in claim construction, the court "gives primacy to the language of the claims, ...