Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-01550/USCOURTS-cand-3_05-cv-01550-10/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

YODLEE, INC.,

Plaintiff,

 v.

 CASHEDGE, INC.,

Defendant.

 /

No. C 05-01550 SI

ORDER DENYING DEFENDANT’S

MOTION FOR SUMMARY JUDGMENT

OF INVALIDITY BASED ON

INDEFINITENESS

Defendant CashEdge’s motion for summary judgment based on invalidity is set for hearing on

December 1, 2006. Pursuant to Civil Local Rule 7-1(b), the Court determines the matter is appropriate

for resolution without oral argument, and VACATES the hearing. For the reasons set forth below, the

Court DENIES the motion. (Docket # 77)

BACKGROUND

Plaintiff Yodlee, Inc., brought suit against defendant CashEdge, Inc., alleging infringement of

six patents; CashEdge subsequently brought its own complaint for declaratory judgment of noninfringement and invalidity, adding three additional Yodlee patents to the suit. The nine patents now

at issue are: United States Patent Nos. 6,199,077 (“the ‘077 patent”), 6,633,910 (“ the ‘910 patent”),

6,510,451 (“the ‘451 patent”), 6,802,042 (“the ‘042 patent”), 6,412,073 (“the ‘073 patent”), 6,594,766

(“the ‘766 patent”), 6,317,783 (“the ‘783 patent”), 6,567,850 (“the ‘850 patent”), and 6,405,245 (“the

‘245 patent”). Broadly speaking, the nine patents all deal with systems and methods to deliver personal

information culled from multiple Internet sources to one central web site. For example, the technologies

at issue allow for an end user to monitor information from several types of accounts held with different

financial institutions on one website, without having to individually log into and navigate through each

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individual website associated with each financial institution with which the user has an account. 

With the instant motion for summary judgment, defendant CashEdge seeks to invalidate many

of the claims of the ‘245, ‘073, ‘451 and ‘766 patents, as indefinite pursuant to 35 U.S.C. § 112 ¶ 2. 

LEGAL STANDARD

1. Summary Judgment

“Summary judgment is appropriate in a patent case, as in other cases, when there is no

genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.”

Nike Inc. v. Wolverine World Wide, Inc., 43 F.3d 644, 646 (Fed. Cir. 1994); Fed. R. Civ. P. 56(c).

The moving party bears the initial burden of “informing the district court of the basis for its motion”

and identifying the matter that “it believes demonstrate[s] the absence of a genuine issue of material

fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2553 (1986). If the moving

party meets this burden, the nonmoving party must then set forth “specific facts showing that there

is a genuine issue for trial.” Fed. R. Civ. P. 56(e); see also T.W. Elec. Serv., Inc. v. Pacific Elec.

Contractors Ass’n, 809 F.2d 626, 630 (9th Cir. 1987). 

“Rule 56(c) requires the moving party to show not only the absence of a disputed issue of fact

but also that he is entitled to judgment as a matter of law . . . [T]herefore, the court must . . .

consider the burden of proof on the issue and where it will rest at trial . . . Where the moving party

has the burden–the plaintiff on a claim for relief or the defendant on an affirmative defense–his

showing must be sufficient for the court to hold that no reasonable trier of fact could find other than

for the moving party.” Calderone v. United States, 799 F.2d 254, 259 (6th Cir. 1986) (quotations

omitted).

The evidence presented by the parties in support of or opposition to a motion for summary

judgment must be admissible. See Fed. R. Civ. P. 56(e). In evaluating this evidence, the Court does

not make credibility determinations or weigh conflicting evidence, and draws all inferences in the

light most favorable to the nonmoving party. T.W. Elec. Serv., 809 F.2d at 630-31 (citing Matsushita

Elec. Indus. Co. V. Zenith Radio Corp., 475 U.S. 574 (1986)); Ting v. United States, 927 F.2d 1504,

1509 (9th Cir. 1991).

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2. Invalidity and Indefiniteness

A party seeking to invalidate a patent must overcome a presumption that the patent is valid.

See 35 U.S.C. § 282; United States Gypsum Co. v. National Gypsum Co., 74 F.3d 1209, 1212 (Fed.

Cir. 1996); Hibritech Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1375 (Fed. Cir. 1986).

This presumption places the burden on the challenging party to prove the patent’s invalidity by clear

and convincing evidence. United States Gypsum Co., 74 F.3d at 1212.

35 U.S.C. § 112 requires that claims be particular and distinct. “The specification shall conclude

with one or more claims particularly pointing out and distinctly claiming the subject matter which the

applicant regards as his invention.” 35 U.S.C. § 112 ¶ 2. The primary purpose of the requirement of

definiteness is to provide warning to those skilled in the art of what will constitute infringement. See

United Carbon Co. v. Binney Co., 317 U.S. 228, 236 (1942). The definiteness standard is one of

reasonableness under the circumstances, requiring that, in light of the teachings of the prior art and the

invention at issue, the claims apprise those skilled in the art of the utilization and scope of the invention

with a reasonable degree of precision and particularity. See Shatterproof Glass Corp. v. Libbey-Owens

Corp., 758 F.2d 613, 624 (Fed. Cir. 1985). “A determination of indefiniteness is a legal conclusion that

is drawn from the court’s performance of its duty as the construer of patent claims [, and] therefore, like

claim construction, is a question of law.” Amtel Corp. v. Info. Storage Devices, Inc., 198 F.3d 1374,

1378 (Fed. Cir. 1999).

DISCUSSION

Defendant CashEdge argues that a majority of the patent claims at issue are invalid, as a matter

of law, because they are indefinite. According to defendant, they are “mixed method-apparatus” claims,

which the Federal Circuit found to be indefinite in IPXL Holdings, L.L.C. v. Amazon.com, Inc., 430 F.3d

1377 (Fed. Cir. 2005).

In IPXL, the Federal Circuit agreed with the Board of Patent Appeals and Interferences of the

PTO, “that reciting both an apparatus and a method of using that apparatus renders a claim indefinite

under section 112, paragraph 2.” Id. at 1384. The court cited and followed a decision by the Board of

Patent Appeals and Interferences, Ex parte Lyell, 17 U.S.P.Q.2d 1548 (BPAI 1990), which had

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 The claim invalidated in Ex parte Lyell read as follows:

 

2. An automatic transmission tool in the form of a workstand and method for using same comprising:

a support means,

and [sic] internally splined sleeve affixed upright to said support means,

a threaded adjustment bolt threadably engaged through a hole in the bottom of said support

means and projecting upward through said support frame into said sleeve,

and further comprising the steps of

1. positioning the output end of an automatic transmission onto said upright sleeve,

2.removingthe internal componentsofsaidautomatictransmissionfromthecasingofsaidtransmission,

3. repairing and replacing said internal components back into said casing, and

4. adjusting said internal components for fit and interference by means of adjusting said

upwardly projecting adjustment bolt.

17 U.S.P.Q.2d at 1549 (emphasis added). 

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invalidated as indefinite a claim whose preamble described the claim as “an automatic transmission tool

. . . and method for using same.”1 The Federal Circuit’s IPXL case concurred with the analysis,

explaining: “[A]s a result of the combination of two separate statutory classes of invention, a

manufacturer or seller of the claimed apparatus would not know from the claim whether it might also

be liable for contributory infringement because a buyer or user of the apparatus later performs the

claimed method of using the apparatus.” Id. 

Based on this rule, the Federal Circuit affirmed the district court’s invalidation of one of the

claims at issue, claim 25, which stated:

The system of claim 2 [including an input means] wherein the predicted transaction

information comprises both a transaction typeand transaction parameters associated with

that transaction type, and the user uses the input means to either change the predicted

transaction information or accept the displayed transaction type and transaction

parameters.

Id. (quoting patent) (emphasis added). The circuit court stated: 

Thus, it is unclear whether infringement of claim 25 occurs when one creates a system

that allows the user to change the predicted transaction information or accept the

displayed transaction, or whether infringement occurs when the user actually uses the

input means to change transaction information or uses the input means to accept a

displayed transaction. Because claim 25 recites both a system and the method for using

that system, it does not apprise a person of ordinary skill in the art of its scope, and it is

invalid under section 112, paragraph 2.

Id. 

Several recent attempts to invalidate patent claims based on the IPXL mixed method-apparatus

rule have been rejected, based on critical differences in the challenged claim language. For example,

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in Collaboration Properties, Inc. v. Tandberg ASA, 2006 U.S. Dist LEXIS 42465 at *1 (N.D. Cal. June

23, 2006), Judge Patel rejected defendants’ attempt to invalidate the following claim:

1. A teleconferencing system for conducting a teleconference among a plurality of

participants, comprising: 

(a) a plurality of workstations, each workstation having first and second monitors and in

communication with audio and video (AV) capture capabilities;

(b) a data path in communication with the plurality of workstations, over which data can

be shared among the plurality of participants; and

(c) an AV path in communication with the plurality of workstations, along which AV

signals, representing video images and spoken audio of the participants, can be carried;

wherein, the system is configured to reproduce images, based on data signals shared

along the data path, on at least two first monitors so as to permit participants associated

with the workstations having the two first monitors to interactively share the reproduced

images and reproduce participant video images, based on AV signals carried along the

second path, on at least two second monitors.

Id. at *15-*16 (emphasis added). Defendants argued that because the claim required the system to be

“configured,” it improperly “injects method steps into the purported system claim,” and was therefore

invalid under IPXL. Id. at *16. Judge Patel rejected defendants’ argument, and distinguished IPXL,

stating: 

The problematic claim language in IPXL Holdings required that “the user uses the input

means” to perform certain functions – an act. The language in the claims of the asserted

patents, in contrast, requires that the system be “configured to” perform certain function

when it is used – a statement of functionality.

Id. The IPXL rule does not apply “where the claims require capability, but not actual use.” Id. at *19.

In Collegenet, Inc. v. XAP Corp., 2006 U.S. Dist. LEXIS 49760 at *1040 (D. Or. July 17, 2006),

the defendant sought to invalidate several claims based on the IPXL rule. In rejecting the defendant’s

arguments, the district court explained the difference between an improper mixed method-apparatus

claim, and a wholly appropriate “functional limitation.” See id. at *1062-63. “A ‘functional limitation’

is ‘an attempt to define something by what it does, rather than by what it is.’” Id. at *1062 (quoting

Manual of Patent Examining Procedure § 2173.05(g) (8th Ed., 2001, rev. 2005)). “[T]here is nothing

inherently wrong with defining some part of an invention in functional terms. Function language does

not, in and of itself, render a claim improper.” Id. (quoting Manual § 2173.05(g)). 

Plaintiff argues that, as in Collaboration Properties and Collegenet, the patents at issue here

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merely claim devices with functional limitations, and do not constitute invalid mixed method-apparatus

claims, as in IPXL. The Court agrees. Unlike IPXL, the patents at issue here do not claim both an

apparatus and a method for using that apparatus. The claims simply use active language to describe the

capability of the apparatuses; they do not claim the activity itself. 

For example, defendant first attacks claim 8 of the ‘245 patent, which states:

A computer-readable storage device storing instructions that upon execution cause a

processor to automatically access personal information associated with an end user,

wherein the personal information is stored on a personal information provider by

performing the steps comprising of:

(a) presenting on a client computer associated with the end user and in

communication with the personal information provider via a network a

representation of personal information and a link corresponding to the personal

information stored on the personal information provider;

(b) upon activation of the presented link, downloading an application to the client

computer, wherein the downloaded application upon execution on the client

computer performs the steps of:

(i) connecting to the personal information provider;

(ii) navigating to the personal information on the personal information

provider using a protocol for instructing the client computer how to

access the personal information via the network, the personal information

accessible to the client computer using the protocol also being accessible

by the end user via the network independently of automatic access by the

processor of personal information caused byexecution ofthe instructions;

and

(iii) presenting the personal information to the user of the client computer.

Patent ‘245 at 18:21-47 (emphasis added). 

Defendant argues that because of paragraph (b), describing “activation of the presented link,”

“it cannot be known whether infringement . . . occurs when the computer-readable storage device is

manufactured or sold, or whether infringement occurs when a user activates such a system’s presented

link, or both. Moreover, infringement of these claims can only take place by virtue of human

interaction. . . .” Mot. at 8:21-24 (emphasis in original). Defendant’s argument, however, is incorrect.

The claim describes what happens “upon activation of the presented link.” It does not seek to patent

activation of the link; it seeks only to patent a device which performs certain functions if and when the

link is activated. Infringement occurs when a device that has the capability of performing the steps

described under paragraph (b) is manufactured and sold. Whether a user actually activates the link

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presented by the infringing device is of absolutely no import. Similarly, the process initiated by

activating the link need never take place. If the device presents such a link, and activating such link

would initiate the process described under paragraph (b), the device infringes. 

A simple analogy would be a claim which physically describes a pair of scissors designed to cut

paper, then states, “upon opening and closing the sharp edges of the scissors on a piece of paper, the

paper is cut.” The language describes the capability of the scissors; it is function language. Infringement

occurs upon the manufacturing and sale of scissors that are capable of cutting paper. The IPXL rule

would apply only if the patent claimed the physical description of the scissors, then stated within the

same claim: “and the method of using said scissors to cut a piece of paper.” The claims at issue here

are analogous to the former example. They describe what the apparatuses do, when used a certain way.

They do not claim use of the apparatuses. Thus, they do not “recit[e] both an apparatus and a method

of using that apparatus.” IPXL, 430 F.3d at 1384. 

All of the claims challenged by defendant, like claim 8 of patent ‘245, place functional

limitations on the apparatuses by describing the capabilities of the apparatuses. They are not invalid

mixed method-apparatus claims. Claim 9 of patent ‘245 describes “[a] system for automated access to

personal information associated with an end user.” Patent ‘245 at 18:48-49. Like claim 8, it describes

what the system does when “the presented link” is activated. Id. at 19:3. It does not require that the link

be activated; it merely describes the function and capability of the system. 

Similarly, claim 1 of the ‘073 patent describes the physical components of an “Internet Portal”

apparatus, then states:

wherein the Portal, in response to log-on by a user from a user’s Internet-connected

appliance, presents a secure and personalized page for the user, the personalized page

having a list of Internet destinations, pre-selected by the user and enabled by hyperlinks,

wherein, upon invocation of a hyperlink by the user, the portal invokes a URL for the

destination, and upon connection with the destination, transparently provides any

required log-on information required for user access at the destination.

Patent ‘073 at 10:2-13.

Claim 18 of the ‘073 patent describes the physical aspects of an “Internet Portal software

application” apparatus, then states:

wherein . . . upon invocation of a hyperlink by the associated user, the portal software

invokes a URL for the destination, and upon connection with the destination,

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transparently provides any required log-on information for user access at the destination.

Id. at 11:11-24.

Claim 28 of the ‘073 patent claims an “Internet Portal software application” apparatus, then states

the function of the apparatus:

wherein the portal application interacts with a browser plug-in executing on a

subscriber’s Internet-connected appliance, such that, when the user invokes a destination,

pre-selected by the associate user, from the browser, accessing the associated user’s

personal page, the portal software cooperates with the browser plug-in to furnish the data

necessary for a successful log-on transparent to the user.

Id. at 11:59-12:6.

Claim 1 of the ‘451 patent describes the physical components of an “Internet portal system,” then

states its function:

wherein the software, in response to initiation of a multi-component task specified by the

client, transparently to the client, and without interaction from the client defines the

component tasks based on pre-programmed client-related data, identifies third-party

Internet Web sources needed for completion of the tasks, performs and manages

interaction with the identified Web sites, gathering results of the interactions, integrates

the gathered results, and communicates final results to the client at the client station.

 Patent ‘451 at 9:50-10:3.

Claims 1 and 11 of the ‘766 patent similarly describe the physical components of an “Internet

Portal” and an “Internet Portal application,” then describe the functions of those apparatuses – i.e., what

happens when the user takes certain actions. Patent ‘766 at 10:10-28, 10:53-11:6.

None of these claims are invalid under the IPXL rule. The claim in IPXL purported to cover both

“[t]he system,” and the situation in which “the user uses” the system. 430 F.3d at 1384. In Ex parte

Lyell, the claim covered both “a workstand and method for using same.” 17 U.S.P.Q.2d at 1549. In

those cases, therefore, “a manufacturer or seller of the claimed apparatus would not know from the claim

whether it might also be liable for contributory infringement because a buyer or user of the apparatus

later performs the claimed method of using the apparatus.” IPXL, 430 F.3d at 1384. Here, there is no

such confusion. The claims at issue do not cover the actions taken by users of the portals and software,

nor do they claim the reactions of the portals and software to user input. Instead, they describe how the

software and portals react to certain input by users, as functional limitations of the software and portals.

Infringement occurs only through manufacturing and sale of systems which have the described

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functionality and capacity. IPXL does not apply to these claims. As Judge Patel stated, the IPXL rule

does not apply “where the claims require capability, but not actual use.” Collaboration Props., 2006

U.S. Dist. LEXIS 42465 at *19. 

Plaintiff’s patents enjoy a presumption of validity, which may only be overcome by clear and

convincing evidence. In this instance, defendant has not met its burden of establishing that the claims

at issue fail to provide warning to those skilled in the art of what will constitute infringement. See

United Carbon Co. v. Binney Co., 317 U.S. 228, 236 (1942). 

CONCLUSION

For the foregoing reasons and for good cause shown, the Court DENIES defendant’s motion for

summary judgment of invalidity. (Docket No. 77)

IT IS SO ORDERED.

Dated: November 29, 2006 

SUSAN ILLSTON

United States District Judge

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