Alexsam, Inc. v. Best Buy, Barnes & Noble, Gap, JC Penney, McDonalds, et al.(E.D. Tex. 2013)

Alexsam has asserted its gift-card patents against a host of accused infringers. U.S. Patent Nos. 6,000,608 and 6,189,787. These patents have been the subject of multiple reexamination requests but the USPTO has repeatedly confirmed patentability and refused to re-re-examine. Here again a jury has confirmed that the patent is valid. In the case against the defendants here, the court held a single trial for validity and will next hold separate trials on infringement for each accused infringer. Meanwhile, Best Buy settled after losing on validity.

The company Alexam was founded by the inventor Robert Dorf who filed for patent protection back in 1997. Asserted Claim 1 of the ’787 patent reads as follows:

1. A multifunction card system, comprising:

a. at least one electronic gift certificate card having a unique identification number encoded on it, said identification number comprising a bank identification number approved by the American Banking Association for use in a banking network, said identification number corresponding to said multifunction card system;

b. a bank processing hub computer under bank hub software control and in communication over a banking network with a pre-existing standard retail point-of-sale device, said bank processing hub computer receiving electronic gift certificate card activation data when said electronic gift certificate card is swiped through said point-of-sale device, said electronic gift certificate card activation data comprising said unique identification number of said electronic gift certificate card and an electronic gift certificate activation amount; and

c. a gift certificate card computer under gift certificate card software control and in communication with said bank processing hub for activating a gift certificate card account in a gift certificate card database corresponding to said electronic gift certificate card, said gift certificate card account comprising balance data representative of an electronic gift certificate activation amount.

113 thoughts on “

  1. I tappears that 6′s post pushed the errors on this htread over the limit and disabled the ‘show more comments’ script.

  2. “song = non functional”

    You know, people say that, but I’m going to be honest, MY songs that I play on my computer BUMP DE BUMP so hard and at regular intervals etc. that they are quite capable of being put to good use. Some easy ones would be as a neighbor summoning device.

  3. “the controlling law concerning exceptions to the printed matter doctrine.”

    LOL, that old canard?

    I understand the printed matter doctrine. What I don’t understand, and you refuse to explain, is why it (or any exception to it) applies differently to a statutory piece of paper than to a statutory piece of electronic paper. They’re both storage media. They don’t do anything but store the information on them, even if that information happens to be instructions.

  4. The kind of plant does not have the functional relationship.

    Is there no surprise tht you have NEVER addressed the exceptions to the printed matter doctrine, which is controlling law?

    Ned – you do realize that you have a duty to acknowledge controlling law, right?

  5. But, when your claim varies from the prior art by the program that is encoded on the memory, the memory is not new in any patentable sense.

    Ned,

    Expressly wrong – See Alappat.

  6. I also repeatedly asked you for the legal support for your multiple additions to law in this area (including the notion of “auto-run.”

    You never complied with my requests – instead, derailing those conversations as well.

    We both know why.

    That TOO was a conversation that I had to tease out of you.

    Shall we address that point in the open, my friend? with full disclosure?

  7. anon, a memory from which programs are executed are indeed a part of a computer qua machine.

    But, when your claim varies from the prior art by the program that is encoded on the memory, the memory is not new in any patentable sense.

    In a similar fashion, a pot for carrying a plant is eligible. But consider a claim to a potted plant where the only thing new is the kind of plant. How is that pot new?

    Now if the pot is old, and the plant is ineligible (found in nature) is the combination patentable? I should say not. But is the analysis under 101 any different than the analysis under 103?

    No. They are the same.

    Ditto, the encoded CRM.

  8. Ned – might I remind you that you derailed the conversation we were having about hte three steps to understanding software patentability after you made a first admission and saw where the conversation was leading to.

    I fought for months to keep you on point and you simply refused to be honest in the conversation.

    This is archived, by the way.

  9. A sheet of paper…< ?i>”

    LOL – Before I deliver yet another Calvinball sp1ke to your face, ask Malcolm about the controlling law concerning exceptions to the printed matter doctrine.

    Come back when you know the law.

  10. Ned,

    PON may be a shorthand – but your use of it is a canard.

    Don’t even get started reinterpreting SC cases as to what those case “held not also.” You take far too many liberties with such revisionist B$.

  11. Ned, I am talking about the catebory of machine, which on its face (i.e., as a category) is elgigible.

    You should be aware of my well-repeated position that “as a category” is different than a discussion of a claim on its own merit, and that all claims – no matter which category still must pass 101.

    For example, all methods claims – individually – must pass 101; be they bicycle-manufacturing methods, medical methods, business methods, or ANY OTHER type of method claim.

    Let’s not kick up dust and pretend that I am saying something that I am not.

  12. NS, thanks for that.

    We’ve been telling that to anon for years. For example, anon and I had a major discussion about source code. That is copyrightable as expression. But source code is not a programmed machine and source code on a CRM is nothing different than a recipe in a book.

    Executable code might be different. But anon will not agree to any requirement that the code on the CRM be executable from the CRM. He states that the CRM is a component of a machine without understanding how computers work. Computers fetch instruction in executable form from memory. If the encoded CRM is supposed to be part of the machine, the instructions must be fetched and executed from the CRM.

    IBM conducted a demo to the PTO way back and convinced the PTO to allow B-claims. Their demo involved inserting a floppy into a computer whereupon it began to execute a program. I don’t know what they did to do this, but that is not normal, except with respect to the autorum program. But the autorun program is not what is being claimed.

  13. “The Reexam guys are apparently cut from a different cloth…”

    Not really. They’re run of the mill primaries with high production who get rewarded with GS-15 positions that have no hrs/BD requirement, just a directive to make it look like they’re doing more than the grunt examiners with their short cut reliance on inapposite boilerplate case law, Official Notice, conclusory allegations that claimed features are well known, etc. But they’re just as likely to rely on BUI and other shenanigans to reject claims as the grunt examiners. After all, they’re all lifers.

  14. See the previous posts regarding other components such as rivets, bullets and tires.

    A sheet of paper is just as much a physical article of manufacture, and just as eligible under 101.

    it would not work to upgrade the computer.

    You mean that following the instructions written on it produces a result? Kinda like a recipe in a cookbook?

    Do you have any arguments more compelling than “computers are a special case, honest!”?

  15. anon, the SC was urged that the problem was not a 101 problem. But SC said it was.

    This does not mean that the SC held that it was not also a 103 problem.

    PON is shorthand for the statutory requirements set forth, for example, in 103: “Determine the differences between the claimed “subject matter” and the prior art.”

  16. anon, you are assuming that a programmed computer is eligible. It is a bit of bootstrapping to suggest a component of ineligible subject matter is eligible because it is a component.

    We can agree, can we not, that plant found in nature is ineligible. Now consider the claim to the potted plant.

  17. CRM without a computer is just a digital writing.

    No.

    It’s a computer component.

    See the previous posts regarding other components such as rivets, bullets and tires. Point in fact, a CRM MUST be functional, otherwise, it would not work to upgrade the computer.

    Thanks, NSII, you just proved the opposite of what you meant to prove.

  18. Abe Lincoln often told a story about Colonel Ethan Allen, a hero of the American Revolution. On a visit to post-war England, Colonel Allen found the English took great pleasure in ridiculing Americans, particularly George Washington. To irritate Allen they went so far as to hang a picture of Washington in the “Back House” (toilet). Allen announced this was highly appropriate, because “there is nothing that will Make an Englishman Sh** so quick as the sight of Genl Washington”

  19. I am trying to point out that the same principles that apply to 101 analysis also apply in 103 analysis.

    Except they don’t – see Prometheus.

    (9-0 remember?)

    And PON >< (point of novelty) is a canard.

  20. A recipe is just as functional as CRM. Following a recipe may be patentable, but the recipe itself is not regardless of how you right it down. Similarly, to the extent that software is patentable, performing the claimed steps is substantively different from having the steps written down.

    Words and instructions, no matter how they are written, are not functional. CRM without a computer is just a digital writing.

  21. anon, look at my OP in this sub-thread. The problem is that we cannot raise 101 invalidity in the PTO, especially in ex parte reexaminations.

    I am trying to point out that the same principles that apply to 101 analysis also apply in 103 analysis.

    Once that is clearly established, the 101 cases can be applied in reexaminations, but under 103. If the PON is ineligible subject matter, or for that matter, anything even clay, that does not provide any new functionality to the underlying, old subject matter, it is obvious as a matter of law.

    Note, that the SC has required “integration” when LoN and abstract ideas are the PON. What this means is that the ineligible must be functionally integrated into the old subject matter in some fashion. Mere “decoration” is not enough.

    Same principle for both. (Which does support your oft-argued point that the ’52 Act intended to put these issues into 103.)

  22. Leopold laughing out loud and rejoicing in Malcolm’s pathos.

    You look downright purty in that cheerleader custom.

    /off sarcasm

  23. Somehow in considering 103,

    …except we are considering patent eligiblity uner 101 and not patentability under 103.

    You seem to have this problem with conflation. I would refere you to the Prometheus decision wherein the Supreme Court expressly rejected that argument, but you have been be@t over the head with that direction so many times already, that if you don’t get it by now, you never will.

  24. I’m sorry, anon, but the very first “obviousness” case involved a very similar issue. Greenwood. There the old door knob was claimed, but using a clay knob. The clay provided no new arrangement or function of mechanisms in the knob itself. The clay itself had nothing functional to do with the knob mechanism. It was “decoration.”

    The SC held the use of the clay knob was within the skill in the art. This case was codified as Section 103 according to Graham.

    Now we have the player piano with new music. The music might be better than other music, but it adds no new functionality to the piano. Under Greenwood, obvious.

    Next we have a conventional credit card system where the data transmitted by the POSale terminal to the hub is new. While the information may be new, the relationship of the information to the hub and the system is not new. Per Greenwood, obvious.

    What we see in all these cases is that the novel subject matter provides no new functionality to the underlying subject matter, it is mere decoration. But this is also why the SC held the claims in Prometheus invalid under 101. The correlation was not used to modify the old process steps at all. The correlation did not bring new functionality. The correlation limitation were a form of decoration.

    Per Greenwood, obvious even though the correlation is new.

    Somehow in considering 103, we have lost sight of its origin and meaning. Decorative new elements must be found in the art, or be suggested. But when those new elements provide no new functionality, they are obvious as a matter of law.

    Greenwood.

  25. link to bulk.resource.org

    That was 1999, almost 15 years ago. Pre-KSR but not pre-printed matter doctrine and not pre-101. Mayer, Michel and Clevenger (Clevenger wrote it). Best line from the decision:

    the invention solves the long-standing problem of unsightly tr-sh bags placed on the curbs of America, and, by fortuitous happenstance, allows users to express their whimsical or festive nature while properly storing g-rbage, leaves, or other household debris awaiting collection

    Try to believe it. Right now I’m developing a t0il-t seat cover along the same lines. It features the open-mouthed image of a former USPTO director who just loved to grant computer-implemented lulzventions. It’s very whimsical!! Patent professionals who have used the protoype can’t stop talking about it.

  26. ” Why, poor Mr. Dembiczak wouldn’t have gotten his patent on a g-rbage bag with a jack-o-lantern face printed on it had the awesome patent-worthy function of that printed matter not been acknowledged by those deep-thinkers at the PTO and Federal Circuit.”

    Man I totally forgot about that case. How many years ago was that?

  27. In other words, you are asking for the judiciary to rewrite patent law to get what you want.

    They already rewrote it once. And thank goodness. Why, poor Mr. Dembiczak wouldn’t have gotten his patent on a g-rbage bag with a jack-o-lantern face printed on it had the awesome patent-worthy function of that printed matter not been acknowledged by those deep-thinkers at the PTO and Federal Circuit.

  28. In other words, you are asking for the judiciary to rewrite patent law to get what you want.

    Is anyone surprised by this audaciousness?

  29. What we need, frankly, is a square holding by the Feds that a claim invalid under 101 is also obvious under 103 because the point of departure over the prior art is an abstraction that has no new functional relationship between the abstract material and the conventional material. E.g., the player piano with a new song, a conventional test for metabolites with a new correlation.

    That way, we could effectively challenge these business method patents in reexaminations that do not otherwise allow 101 challenges.

  30. Seems like pin dancing to me.

    LOL – 35 USC 101:
    Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

    Yep:
    Jumping from process to manufacture: OH NOES – worst thing eva
    Jumping from manufacture to machine: that be pin dancing

    Consistency be d@mmed.

  31. Seems like pin dancing to me.

    Article of manufacture dancing, you mean. I agree with you that the distinctions between machine and manufacture aren’t that important, if it’s clear that a claimed invention is one or the other. I certainly agree with you on the “paradigm” claim – that ought to be per se sanctionable. “System” isn’t quite so bad – I don’t think most uses are intended to be fuzzy, but it is an inherently ambiguous word.

  32. Since you asked, it’s usually a machine, if it’s claimed properly.

    Makes sense. I was thinking that machines were a subset of “articles of manufacture” but perhaps the term “articles of manufacture” excludes machine objects? Seems like pin dancing to me.

    Bottom line is that the use of “system” claims is a perfect example of lawyerly hand-waving with proven effectiveness at making the “invention” seem like something it is not, i.e., patent-eligible subject matter. “System” (and their b–t-rd cousin, the nefarious “paradigm” claim) typically recite both compositions of matter (including compositions with moving parts, e.g., “machines”) and method steps describing actions that are theoretically taken by people interacting with machines in the “system”/”paradigm” and steps taken by the machines themselves.

  33. From the Spec: Systems of transactions have heretofore been known using the prepaid card (e.g., telephone card) that has values and functions with which goods and services can be repetitively purched up to a predetermined maximum sum. Conventional systems involved inconvenience in that when the prepaid card was to be purchased, it was a rule to pay cash that met the maximum sum thereof.

    LOL. And different “rules” were never ever contemplated, of course. The earlier “rules” were written in stone tablets and never questioned … until 1990! Can I haz patent now?

  34. From the Spec: since the prepaid card was not provided with an identification mark of a proprietor, it was not possible to effectively prevent abuse, embezzlement or illicit use.

    Not possible? Well, I guess it depends on the definition of “effectively.” Of course, nobody ever considered putting a proprietor’s name on a product prior to 1990 so that is truly a key innnovation. Without these incentivized wunderkids we might very well be using generic cards today with no information on them and getting ripped off every day as a result. That was a daily fact of life pretty much every day in 1989, only one year after the first computer was invented and 20 years before the Internet was plugged in.

  35. EP0406841 A1
    Filed July 4 1990 (no less lame, but earlier):

    1. A system for issuing and accounting prepaid cards comprising: a central unit having accessible data base in which personal account data are accumulated; card-issuing means having a terminal connected to said data base through a communication circuit and for issuing said prepaid card with values with which goods and services can be purchased up to maximum allowable sum based on said personal account data accessed via said terminal; and accounting means for renewing said maximum allowable sum based upon the differences between sums of goods and services really purchased and said maximum allowable sum of said prepaid card and for recording renewed maximum allowable sum in said prepaid card.

  36. And if a “system” isn’t an article of manufacture, then what is it?

    Since you asked, it’s usually a machine, if it’s claimed properly. It could be a method, though, or even an abstraction, which is why I never use the word “system” in a claim. It’s definitely not a manufacture, though. A nail is an article of manufacture. Several computers networked together are a machine.

  37. better luck next time.

    Also: better lawyers. Were the defenses hands tied in terms of the arguments they were allowed to make? Or were they simply an uncreative bunch?

    Certainly the panel draw here was a stroke of luck for the plaintiff. I hardly think that Judge Mayer is alone in his thinking when it comes to nonsense like the patenting of new “paradigms” in “account activation”.

    My new account activation system comprises an account that is activatable by squinting at a signal receiving means or thinking about activitating the account in the presence of the signal receiving means. In a self-driving car. While the car is moving. Wherein the self-driving car is an electric car. Wherein the self-driving car comprises a monitor capable of displaying information. Wherein the information is copyrighted information. Wherein the copyrighted information is video information. Wherein the monitor is touch-sensitive.

    Can I haz patent?

  38. method step

    There are no “method steps” in an article of manufacture. And if a “system” isn’t an article of manufacture, then what is it? An abstraction is a great answer.

  39. Looks like the split in the 101 crowds has now come home to roost.

    “I respectfully dissent. There can be no infringement
    of U.S. Patent No. 6,000,608 (the “’608 patent”) because it
    is invalid. Asserted claims 57 and 58 disclose nothing
    more than an abstract idea for making a business run
    more efficiently, thereby failing to meet the subject matter
    eligibility requirements set forth in 35 U.S.C. § 101.”

    Looks like at least one judge remembered 101, but forgot to take note of the method step hiding out in the claim.

  40. song = non functional
    computer program = functional

    Computer program for playing music = ?
    Computer program for making pretty images on a computer screen = ?

    A computer doing something useful is functional. A computer program for doing something useful is printed matter.

    A computer program for shuffling credits around… place your bets. I don’t think the Supreme Court will be a fan.

  41. Thanks Just saying, I had grown weary of hitting Ned over the head with his disingenuous examples. He has been repeatedly chastised on these points (specifically to treat the useful arts accurately), and simply refuses to treat the issue honestly.

    He also (not surprisingly) has never once addressed the existence (and the legal controlling nature of) the exceptions to the written matter doctrine. Even Malcolm has recognized the controlling law in this area.

  42. song = non functional
    computer program = functional

    Is the difference too hard for you to comprehend?

    Non sequitur, next you’ll be telling me that a CRM is patentable without even investigating whether the encoded program is patentable because the claim is claiming a CRM
    That is still up in the air — see CLS Bank, but of course, you already knew that.

    And finally you would tell me that a claim to a system is patentable if the only thing new is that the data being transmitted and received is different in some abstract way.
    Nice strawman. What hapens if “the data being transmitted and received is different in some functional way.”

  43. The Feds yesterday decided a case involving Alexsam.
    ALEXSAM v. IDT CORP, link to cafc.uscourts.gov

    The claim is very similar, but ends with this:

    d. said processing hub activating an account
    corresponding to the unique identification number,
    thereby permitting later access to said account.

    This is a process step in a system claim. Huh?

    The other claim elements:

    “a. at least one card having a unique identification
    number encoded on it, said identification
    number comprising a bank identification number
    approved by the American Banking Association for
    use in a banking network;
    b. a transaction processor receiving card activation
    data from an unmodified existing standard
    retail point-of-sale device, said card activation data
    including said unique identification number;
    c. a processing hub receiving directly or indirectly
    said activation data from said transaction
    processor; and”

    Note, there is no limitation to gift cards. None.

  44. This thread is long on opinion and short on analysis. My thoughts:

    > 1. A multifunction card system, comprising:

    > a. at least one electronic gift certificate card having a unique identification number encoded on it, said identification number comprising a bank identification number approved by the American Banking Association for use in a banking network, said identification number corresponding to said multifunction card system;

    “Gift certificate card” is an electronically readable card (a reasonable construction, I think), whose only distinguishing characteristic is that it has an ID number on it which (a) is “approved by the ABA…” – true of conventional credit/debit cards – and (b) is associated with a “multifunction card system”. What is a “multifunction card system”? From the patent:
    “there is a need in the art for a debit/credit card capable of performing a plurality of functions, such as an electronic gift certificate card, a prepaid phone card, and a loyalty card, all in a real-time secure environment. There is also a need in the art for a system which can provide a card substitute for travelers checks and money orders which can be accepted by any POS device or ATM for financial transactions. Further, there is a need for a processing center which can manage such a multifunction card system.”

    - A system like this would have differed from credit/debit card banking systems as they existed in 1997, but the claim doesn’t include any relevant detail

    > b. a bank processing hub computer under bank hub software control and in communication over a banking network with a pre-existing standard retail point-of-sale device,

    - Clearly “old”

    > said bank processing hub computer receiving electronic gift certificate card activation data when said electronic gift certificate card is swiped through said point-of-sale device, said electronic gift certificate card activation data comprising said unique identification number of said electronic gift certificate card and an electronic gift certificate activation amount;

    - a conventional EPOS transaction would send an amount of a debit (for a purchase) or a credit (for a refund) to be processed onto the cardholder’s account. The “activation amount” is an amount of credit that is to be associated with the card, in an “account” of some kind, irrespective of whether the account is associated with a particular cardholder or only with the card itself.

    > c. a gift certificate card computer under gift certificate card software control and in communication with said bank processing hub for activating a gift certificate card account in a gift certificate card database corresponding to said electronic gift certificate card, said gift certificate card account comprising balance data representative of an electronic gift certificate activation amount.
    - This is still silent as to whether the account is associated with an individual cardholder. It could be, in which case it’s no different from crediting a bank account or credit card account.

    - Any difference must lie in the card being characterised as a “gift certificate card” and the references to a “multifunction card system”. The claim only specifies one function of the card, so it fails to define a “multifunction card system”. A “gift certificate card” is arguably different from a conventional credit/debit card – you wouldn’t be able to use it in precisely the same way as you would use a credit/debit card, but the claim does not define any characteristics of the card or associated transaction processing that actually differentiate it from credit/debit cards.

    In 1997, using the POS/banking network to administer gift cards was probably novel and at least arguably non-obvious. The systems were set up to deal with credit/debit cards associated with specific authenticated users. Would it have been obvious to exploit these existing systems to facilitate the administration of gift cards, which presumably are not tied to specific users?

    There may have been a patentable invention there, but the claim does not do a very good job of defining it. Is it bad enough to be invalid or unenforceable? This depends entirely on how you construe “gift certificate card”.

  45. The problem about handling claims like this in a reexamination is that the Supreme Court likes to handle these cases under section 101 and section 101 is beyond the purview a reexamination.

  46. Non sequitur, next you’ll be telling me that a CRM is patentable without even investigating whether the encoded program is patentable because the claim is claiming a CRM.

    Of course then you’ll be telling me that a player piano is patentable subject matter regardless that the only thing new is the song it plays.

    And finally you would tell me that a claim to a system is patentable if the only thing new is that the data being transmitted and received is different in some abstract way.

  47. Does the “printed matter doctrine” apply to computer-related claims? If not, differing “only on the content of the data” is par for the course.

  48. MM, I don’t see that the bank or account holding bank have to activate anything. The hub simply has to receive data.

    This reads on normal credit card processing with the point of departure being the label on the data that is transmitted to the bank. But since the bank doesn’t have to do anything but receive the data…

    I think this claim is invalid on its face because it departs from the prior art only on the content of the data.

  49. bad, The only apparent departure from normal credit card processing is a different “label” on the data communicated to the bank. Since there is nothing in the claims that requires anything to be done with the data except receive it, the claims read on normal credit card processing.

    My boy, you are reading into the claims a lot of stuff that is not there. If you suggest that a claim to a player piano may be distinguished from other player pianos based on the song it plays, then I suggest to you that what you are claiming is the song and not the player piano.

    But is this a 101 or a 103 issue. I think 103, but 101 seems to apply as well.

  50. “One answer is we can expect them not to understand hindsight and the virulent anti’s not to try.” I agree

  51. varieties that were activated at point-of-sale terminals.

    What possible difference could that make for patentability? Any account can be “activated” electronically, from a distance, be it at a “point-of-sale” or the “house of a relative” or a “political headquarters”. Everyone knew that when this application was filed and the addition of such a “limitation” could not be more meaningless than a limitation that the card has “dimensions that allow it be carried in a wallet” or that the card “can be deactivated by the bank at any time the bank deems it necessary” or that the “point of sale location is on a passenger plane.”

  52. Gift cards were new then – most stores still used paper gift certificates.

    Most stores still use paper gift certificates. But they are completely different from electronic gift certificates. Excuse me, “cards”. There is absolutely no reasonable analogy that can be drawn between electronic gift certificates and paper ones, nor is there any similarity (that would ever be acknowledged by any reasonable patent-friendly person) between a paper gift certificate and a virtual gift certificate. For starters, the paper gift certificate is made of paper (duh!) while the other gift certificates are made of plastic or bits.

  53. When does the realization of patent validity

    More like PTO incompetence.

    It helps to have good arguments. This is a j–k patent, perhaps a quintessential example of one. When you see g—bage like a unique identification number encoded on it, said identification number comprising a bank identification number approved by the American Banking Association for use in a banking network or balance data representative of an electronic gift certificate activation amount in a claim you’ve got a good indicator that something rotten is going on.

    The invention is allegedly the combination of a bank, “card” that can be “activated” electronically, and a machine to read the card. Whether the card is a “gift card” or a “polio victims trust access card” or a “credit card” and whether the card is green or black or comprises a social security number or any other number is just dust kicked in the eyes of the incompetent PTO Examiners and confused judges by the attorneys who troll this s–t.

  54. “These patents have been the subject of multiple reexamination requests but the USPTO has repeatedly confirmed patentability and refused to re-re-examine”

    When does the realization of patent validity kick in strongly enough for alleged infringers to condescend to take a license?

  55. In addition to novelty, there’s also an issue with definiteness.

    I’m pretty sure that the ABA is a trademark and their approval of a number is not irrevocable. Also, I suspect that a competitor could begin using a non-infringing number that was not approved. Then the ABA could go ahead and approve that number for a new bank and voila!!– the non-infringing use is now an infringing use.

  56. The second non-final rejection was the examiner citing a new reference addressing un-amended claim language in response to argument only, which precludes a final rejection. My experience today is that this would (hopefully) be handled with an informal/supplemental response/amendment, which is effectively the same. Certainly this particular art unit is much more on edge today than it was in 1997.

  57. I won’t disagree about the ABA identification as a weak point of novelty. The PACER file was also illuminating on this as it contained a fair amount of the defendant’s expert report. Just my opinion, but I found the (partial) report to be very weak considering what the defendants must have paid for it. Perhaps they should have hired a UT-Tyler business-technology professor instead of a NY banker. An obvious choice of course….in hindsight. ;)

  58. In many different ways. To begin with, one of the apps got two non-finals in a row. ;^)

    Then there is the prosecuting attorney waxing poetic on the record in a way that most attorneys nowadays would never consider.

    Most striking, however, are the claims themselves.

    The Reexam guys are apparently cut from a different cloth, but I can’t see any of today’s grunt examiners actually buying the “identification number approved by the American Banking Association for use in a banking network” as a distinguishing feature.

  59. People have been asking what difference does it make if Obama stacks the Fed. Cir. with non-patent attorneys. One answer is we can expect them not to understand hindsight and the virulent anti’s not to try.

  60. I read through the un-sealed portions of the PACER file and found that this was a much closer call than expected. For invalidity, the question of the conception date of the MobileGo card was a critical factual inquiry, and relied upon testimony and internal documents from the developer, SVS. Interesting read. I recommend Magistrate Craven’s detailed MSJ rulings on 4/8 and 4/10 as a primer for what evidence was likely before the jury.

  61. So that is you pounding on the door of relevancy with me stepping up to guide you then. Gotcha.

  62. J. Lourie wrote: every thing you do with a shovel is known. A shovel cannot be used as a element in a claim for inventive concept.

  63. A rocket is a really powerful volcano, or propelling oneself by very powerful spitting, both of these being the result of laws of nature.

  64. KSR for one thing. The applicant makes excellent arguments in his remarks regarding the pre-KSR TSM requirement. These days an Official Notice would have been enough. Official Notice is a favorite of the grumbling masses, talk radio, and anyone emboldened to make conclusory proclamations with 10 years of hindsight.

  65. … and the laser is just concentrated light … the gatling gun just like a bunch of guys each shooting off their 6-shooters … a rocket is nothing more than a concentrated fireplace.

    None therefore 101 eligible. (or is it 102? or 103? or?)

  66. You remind me of the smarty pants that I would teach as an adjunct professor. They never got their programs running right and never did well on the exams, but, oh boy, everything was so easy.

    Right smarty pants! If it is so easy, then put together a 102/103 argument that sticks. This hand waving non-sense is offensive to system of patents. Oh wait, I forgot, the new criteria for being a judge on the fed. cir. is only that you like to drink bourbon.

  67. J. Lourie wrote: You see you need some sort of magical transformation if a computer is involved. Somehow you are going to have to find a transformation that could not be done with a pencil and paper and that has at least new element that has never been claimed before. Additionally, you must have an inventive concept that so blows me away that I can’t process it for at least 2 days.

  68. J. Lourie wrote: No it is not new. It is composed of old elements or computers and communications doing nothing more than a pencil and paper could do, or a person could just yell.

  69. Ned: ” the claim appears to read on prior art systems using conventional credit cards with the point of novelty being the application to gift cards.”

    101 Integration Expert: Point of Novelty? Does the statute say there must be a “point” of novelty? And if so, at which stage? 101? 102? 103? 112? And how do you take the claims as a whole if you are deciding validity on a point of novelty?

    Ned: “One might consider this obvious.”

    101 Integration Expert: Really? Does 102 anticipation now overlap into 103 obviousness? When did the courts ever hold this? Proper pin cite please.

    Ned: “This systems seems old, they way most bank cards operate.

    101 Integration Expert: Does it matter that the system is old? Can’t a patent be granted and valid for a new use of an old machine? Did the statute change in that regard? And if so proper pin cite please.

    Ned: What appears to have been done is apply it to “gift” cards.

    101 Integration Expert: Wouldn’t that be an “inventive application” ?
    I know these questions may be irritating and down right frustrating but that is what happens when you simply look at a claim, see that it is software related and/or a business method, and “preordain” the claims invalid.

  70. J. Lourie wrote: Now come on, electronic gift cards are all just part of the abstract idea of a back account that has been around for hundreds of years. All the other elements around the abstract idea are old and cannot add an inventive concept. Additionally, the computer is just being used to perform operations faster than humans. For example, dixie cups and string could be used for the communications and pencil and paper for the numbers.

    Therefore, not eligible under 101.

  71. It seems old because it is – filing date of 1997. Gift cards were new then – most stores still used paper gift certificates.

  72. I agree that a prepaid debit card looks an awfully lot like a gift certificate card. One would presume that art related to prepaid debit cards would have been raised in one of the reexaminations here, so I expect that they don’t predate 1997, at least not in varieties that were activated at point-of-sale terminals.

    Ned says that this claim reads on conventional credit card systems. I’m having trouble seeing that.

  73. One might consider this obvious.

    Are you kidding? A “gift certificate card computer” is a whole new machine, never seen before! It’s got software and everything.

  74. Ned, even today I’m not aware of a credit card system where the credit card is activated and an activation balance automatically associated with the credit card in response to swiping the credit card at a point-of-sale terminal. Are you?

  75. Non sequitur, the claim appears to read on prior art systems using conventional credit cards with the point of novelty being the application to gift cards. One might consider this obvious.

  76. Just curious – What makes these “electronic gift certificate cards” electronic? Is this term understood to refer to magnetic stripe cards? Are those cards any more “electronic” than any other pieces of paper/cardboard/plastic that have data embedded in them or printed on them via some piece of electronic equipment?

  77. I agree it seems like pretty mundane stuff. But it’s not my area, so maybe there’s some magic wording in the claims that makes it new/inventive.

    The histories are available in pair, so please let us know what you learn.

    On a quick glance, the `608 was re-exed twice previously, and has 4 concurrent re-exams ongoing right now.

  78. Isn’t this claim just record keeping using computers and an “electronic gift certificate card”?

  79. What to we have: a card having a unique number and a bank ID, a bank in communication with a point of sale machine receiving data encoded on the card, the data including the card number and amount of purchase; another computer that has a database of unique card accounts, the accounts including balance data.

    This systems seems old, they way most bank cards operate. What appears to have been done is apply it to “gift” cards.

    I would like to see the prosecution history to see if anything was new other than the application to gift cards.

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