Every Penny Counts, Inc. v. American Express, Visa, Green Dot, MasterCard, First Data, etc. (Federal Circuit 2009)
Dr. Burke is a psychoanalyst who never liked change. I'm not talking Obama style change. No, Burke patented a method for donating leftover change ("excess cash") to charities (or to store it in a separate savings account.)
Burke's company (EPC) sued a host of defendants. who sell gift cards -- alleging that the retail sale of gift cards along with merchandise infringe upon his patents because the gift card sales “loading value onto accounts at a point-of-sale terminal.” EPC's argument was that the purchaser was using "excess cash" to buy the gift card.
On appeal, the Federal Circuit rejected the patentee's argument for a broad claim construction - instead holding that the claimed "excess cash" was an “amount selected by the payor beyond the total amount due at the point of sale.”
Looking at the specification as “the primary basis for construing the claims,” the appellate panel noted that the specification repeatedly described the method's purpose as allowing someone to conveniently donate to charities or to painlessly save money. From the specification:
Interpreting this, the Federal Circuit determined that the claimed "excess cash" must be only what is left over after all items (including gift cards) are paid for. "Where the consumer does not offer a sum in excess of the total displayed on the cash register, then there is no excess cash."
In current shopping situations a clerk inputs the price of all items in a cash register and the latter totals the price. The consumer offers either the exact amount of cash or a sum exceeding the price, and the clerk enters that amount. The cash register then subtracts the price from the cash.
The excess cash offers the customers an opportunity to save small amounts of money painlessly. It also affords the consumer to donate [sic] small amounts of money to charity.
- Read the Opinion: 08-1434.pdf.
- The Federal Circuit remarked that EPC wasted its appellate time arguing process - that it didn't get a fair chance to argue claim-construction below. Claim construction is reviewed de novo, and the appellant needs to focus on why it should win on the merits, not on whether the district court was listening. "EPC has surprisingly little to say about what it alleges is substantively wrong with the district court’s construction, or why its proposed construction would be better on the merits. Instead, it attempts to assign error to the district court’s construction on a number of procedural grounds. Principally, it argues that the court erred by (1) spending a portion of the claim construction hearing considering the meaning of the phrase “sales price,” which was not a disputed claim term; and (2) using the accused products to tailor a construction of the patent claims that would make it impossible for EPC to prove infringement. Neither of these arguments has merit."
- As a rule, the Federal Circuit is respectful to both parties as well as their arguments and positions. Here, Senior Judge Cudahy went about as far as the Court ever does by describing Burke's invention only within quotation marks (Burke's "invention") and once referring to the "'invention', such as it is." The court more explicitly showed its disdain by awarding costs to the defendants.
- Some of you may have heard of Bank of America's "Keep the Change" program. According to the company brochure: "Each time you buy something with your Bank of America Check Card, we'll round your purchase to the nearest dollar amount and transfer the difference from your checking account to your savings account. You get to keep the change and grow your savings. What could be easier?" EPC's litigation against BOA continues.