Appeal from the United States District Court for the Western District of Wisconsin in Case No. 09-CV-0391, Magistrate Judge Stephen L. Crocker.
The opinion of the court was delivered by: Bryson, Circuit Judge.
NOTE: This disposition is nonprecedential.
Before LOURIE, BRYSON, and LINN, Circuit Judges.
Privacash, Inc., appeals from a decision of the United States District Court for the Western District of Wisconsin entering summary judgment that certain gift cards sold by the American Express Company and its affiliates do not infringe United States Patent No. 7,328,181 ("the '181 patent"). The court held that the accused cards lacked a "non-personalized cardholder name" and were not "bearer instruments" as required by the asserted claims. We conclude that the cards are not "bearer instruments," and we therefore affirm. We do not address whether the cards feature a "non-personalized cardholder name."
The primary objective of the '181 patent is to create an anonymous and untraceable means for transacting purchases over the internet. '181 patent, col. 1, ll. 47-51. The patent recognizes that most internet transactions require a credit card, and therefore anonymous internet purchases are almost impossible to make. Id. col. 1, ll. 19-46. The patent's solution to that problem is a prepaid purchasing card similar to a prepaid phone card. Id. col. 2, l. 65. To enable purchases to be made anonymously, the purchasing card is not personalized and is described as being a "'bearer card' which means it is as good as cash." Id. col. 3, l. 59. A consumer can buy the purchas- ing card using cash or a personal credit card, but the "account number on the purchasing card . . . is not part of the transaction, and thus is not linked to the consumer." Id. col. 3, ll. 56-58. After buying the card, the consumer can activate the card by providing only the account number on the card. Id. col. 4, ll. 20-21.
American Express distributes gift cards that can be purchased in retail locations. The cards contain embossed phrases such as "CELEBRATE," "INDULGE," or "A GIFT FOR YOU" instead of the cardholder's name. The gift cards are inactive until someone purchases them. After the card is purchased and activated, it can be used until the value of the card is exhausted. If the card is reported to American Express as lost or stolen, it will be deactivated. In that event, the gift card can be replaced with a new card that has a value equal to the remaining balance on the card at the time it was reported lost or stolen. If the card is not reported lost or stolen, it can be used by anyone in possession of the card.
Privacash filed suit against American Express asserting that the American Express gift cards infringed the '181 patent. Claim 1 was the only asserted independent claim. That claim recites the following method:
1. A method of transacting a purchase, comprising:
distributing a plurality of unfunded purchase cards from a purchase card provider to a plurality of purchase card outlets, wherein each of the purchase cards is a bearer instrument having an associated account number issued by a major branded credit card organization, an expiration date and a non-personalized cardholder name se- lected by the purchase card provider printed thereon, wherein the purchase card does not include information identifying the specific perspective cardholder, wherein information associated with each of the purchase card accounts is maintained in a software implemented application operated by the purchase card provider;
issuing a purchase card to a cardholder at the a purchase card outlet;
contacting the purchase card provider to fund and activate the purchase card account of specific purchase card issued with a software implemented application or via the telephone; and
transacting a cardholder purchase at any one of a number of retailers not associated with the purchase card outlet which accepts credit cards of the major branded credit card organization, wherein the cardholder presents the purchase card and the retailer contacts the purchase card provider over a network connection to interface with the software implemented application transmitting the purchase amount and the purchase card account number without requiring the retailer to collect and transmit personalized card-holder identifying information, to verify using the software implemented retail application that the purchase card is unexpired and that the purchase amount does not exceed the cardholder's funding limit, whereupon the purchase card account information will be debited by the amount of the purchase and the account of the retailer will be electronically credited completing the purchase transaction.
American Express moved for summary judgment of noninfringement on various grounds, including that its gift cards were not "bearer instruments" because they could be canceled or deactivated. Privacash argued that the proper construction of "bearer instrument" is a card that "may be used up to the limit available on the ...