“Change To Charity” Claims Don’t Read On Gift Cards

Posted on | June 29, 2008 | 3 Comments

2008-1434 Every Penny v. American Express
MD/FL 8:07-CV-1255
Judge Richard A. Lazzara

Plaintiff Every Penny appeals from the judgment of non-infringement following Judge Richard A. Lazzara’s order on claim construction.  Every Penny had stipulated that it could not prove infringement based on the court’s claim construction.

Every Penny sued American Express, Visa, Mastercard and Green Dot for allegedly infringing 5,621,640; 6,112,191; 6,088,682; 6,876,971; and 7,171,370.  The patents are directed to a system where an amount in excess of the purchase price (e.g., "change") can be donated to a pre-selected charity or directed to another account (like a savings account).  The question is whether the claims can be read to cover purchasing a gift card or the like–the court’s construction answered the question with a "no"–thereby bringing the defendants outside the claims.    

All of the relevant claims contain similar language related to "an excess cash payment" or an amount offered by the purchaser in excess of the sale price of the product: "additional amount" found in claim 8 of the ’191 patent, "amount of excess cash" found
in claim 1 of the ’370 patent, "excess cash payment" found in claim 1 of the ’640 patent,
"amount of excess cash" found in claim 1 of the ’682 patent, "excess from amounts"
found in claim 30 of the ’682 patent and claim 20 of the ’971 patent, and "any excess"
found in claim 1 of the ’971 patent.

The claim construction question was whether the excess amount must be "selected by the payor/transactor" (as the defendants’ argued) or not (as Every Penny argued). 

Consider a hypothetical to explain the issue: a purchaser buys a $100 gift card from a merchant and is charged $105–$100 to load on the gift card and $5 transaction fee.  Defendants argue that the price of the product is $105 and there is no excess amount: plaintiff, on the other hand, must contend that the "sale price of the product" is $5 with $100 being considered the excess amount.

The court sided with defendants.  Although the court ruled from the bench and didn’t offer a detailed written explanation, defendants’ Markman brief notes that the Specifications only talk about an excess amount determined by the purchaser, and that the purchaser’s determination of the amount was used to differentiate the patent applications from prior art during examination.

Notes: A companion case by Every Penny against First Data Corp. and others (MD/FL 8:07-CV-1254, Judge Lazzara) met the same fate and for the same reasons.  It has been appealed as 2008-1438).  Every Penny also has two cases with Bank of America also going in the MD/FL.

More reading:

Every Penny Markman Brief (Warning: It is a big file (1.8mb) and doesn’t say too much: essentially just arguing that defendants’ are trying to import limitations into the claims)

Credit Card Defendants’ Markman Brief

Court’s Order

Counsel:

Every Penny:  Phelps Dunbar LLP, New Orleans and Tampa (Brent B. Barriere, David L. Patron, Eric Robert Pellenbarg, Harry M. Barton, Harvey S. Kauget, Karl Joseph Brandes).

American Express: Kirkland & Ellis LLP, New York (James E. Marin, John C. Spaccarotella, Peter J. Armenio) and Hill, Ward & Henderson, PA, Tampa (David Thomas Knight).

Visa: Farella, Braun & Martel, LLP, San Francisco (Andrew Leibnitz, Eugene Y. Mar, June T. Tai, Roderick M. Thompson) and Carlton Fields, Tampa (C. Douglas McDonald, Jr.) and Mr. Knight.

Mastercard: Baker Botts, New York (Eliot Williams, Robert Scheinfeld), Rumberger, Kirk & Caldwell, PA, Tampa (Robert Blank, Jared Smith) and Mr. Knight.

Green Dot: Bryan Cave, St. Louis (Ameer Gado, Emma Harty, J. Bennett Clark), Buell & Elligett, Tampa (Raymond T. Elligett, Jr.) and Mr. Knight. 

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