Court Opinion

ID: 210105
Source: CourtListenerOpinion
Date Created: 2011-03-13 08:03:43+00
Date Added: 2024-06-11T17:27:59.796628
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals for the Federal Circuit
                                        2007-1247

                            EMERGIS TECHNOLOGIES, INC.
                  (formerly known as BCE Emergis Technologies, Inc.),

                                                      Plaintiff-Appellant,

                                             v.

                               PNM RESOURCES, TNMP,
                              and FIRST CHOICE POWER,

                                                      Defendants-Appellees.
                                     ------------
                                       2007-1252

                            EMERGIS TECHNOLOGIES, INC.
                  (formerly known as BCE Emergis Technologies, Inc.),

                                                      Plaintiff-Appellant,

                                             v.

                              OTTER TAIL CORPORATION,

                                                       Defendant-Appellee.

       David K. Callahan, Kirkland & Ellis, LLP, of Chicago, Illinois, argued for plaintiff-
appellant. With him on the brief were Joseph J. Jacobi and Alison Aubry Richards.

       Douglas D. Salyers, Troutman Sanders, LLP, of Atlanta, Georgia, for defendants-
appellees PNM Resources, et al. With him on the brief was James Hunt Yancey, Jr. Of
counsel was Alice Tomlinson Lorenz, Miller Stratvert, P.A., of Albuquerque, New Mexico.

      J. Thomas Vitt, Dorsey & Whitney, LLP, of Minneapolis, Minnesota, argued for
defendant-appellee Otter Tail Corporation. With him on the brief was Bart B. Torvik.

Appealed from: United States District Court District of New Mexico

Magistrate Judge Leslie C. Smith

Appealed from: United Stated District Court District of Minnesota

Chief Magistrate Judge Raymond L. Erickson
                      NOTE: This disposition is nonprecedential.

 United States Court of Appeals for the Federal Circuit
                                        2007-1247

                           EMERGIS TECHNOLOGIES, INC.
                 (formerly known as BCE Emergis Technologies, Inc.),

                                                               Plaintiff-Appellant,

                                             v.

              PNM RESOURCES, TNMP, and FIRST CHOICE POWER,

                                                               Defendants-Appellees.

                                   -------------------------

                                        2007-1252

                           EMERGIS TECHNOLOGIES, INC.
                 (formerly known as BCE Emergis Technologies, Inc.),

                                                               Plaintiff-Appellant,

                                             v.

                             OTTER TAIL CORPORATION,

                                                                 Defendant-Appellee.

Appeal from the United States District Court for the District of New Mexico in case no.
06-CV-0100, Magistrate Judge Leslie C. Smith.

Appeal from the United States District Court for the District of Minnesota in case no. 06-
CV-348, Chief Magistrate Judge Raymond L. Erickson.

                           __________________________

                           DECIDED: January 31, 2008
                           __________________________
Before GAJARSA and DYK, Circuit Judges, and MORAN, District Judge. ∗

MORAN, District Judge.

        Pending before us are two separate appeals arising from Plaintiff-Appellant

Emergis Technologies, Inc.’s patent prosecutions. In Appeal No. 2007-1247, Emergis

appeals the order of the District Court for the District of New Mexico granting summary

judgment of non-infringement of United States Patent No. 6,044,362 (“the ‘362 patent”)

in favor of Defendants-Appellees PNM Resources, TNMP, and First Choice Power

(collectively “the PNM appellees”).    In Appeal No. 2007-1252, Emergis appeals the

order of the District Court for the District of Minnesota granting summary judgment of

non-infringement of the ‘362 patent in favor of Defendant-Appellee Otter Tail

Corporation. Although each appeal is factually unique, they present similar legal issues,

and we have consolidated them for disposition in this decision.

        We affirm the decision of the district courts that none of the accused products

infringes on the ‘362 patent. But, in doing so, in Appeal No. 2007-1247, we correct the

district court’s construction of the term “customer invoice account number.”

                                      BACKGROUND

        The ‘362 patent relates to a system for automated electronic billing and payment.

Customers enroll in the system and it then presents bills to the customers electronically.

After receiving the electronic invoices, the customers make payments online through the

system. The system accepts the payments and routes them to the invoicer’s financial

institution.

        ∗
              Honorable James B. Moran, Senior District Judge, United States District
Court for the Northern District of Illinois, sitting by designation.

2007-1247, 2007-1252                        2
       According to the ‘362 patent, existing online payment systems contained a great

deal of complexity and were too expensive. The ‘362 patent attempted to solve these

problems by creating a process that is “a simple, straight forward system and method of

automated electronic invoicing and payment that directly involves the invoicer and the

customer, while, at the same time, does not require a third party service provider.” ‘362

patent, col. 1, ll. 53-56.

       The ‘362 patent contains ninety-nine claims, of which six are independent. Claim

1 is representative and provides in relevant part:

       An automated electronic invoicing and payment system for providing
       remote customer review of automated billing from an invoicer, wherein the
       customer payment instructions are sent from the customer directly to the
       invoicer, said system comprising:
       (a) invoice presentation electronics adapted to present customer billing
       data for customer review and to request payment instructions relating to
       automated billing to said customer; and
       (b) a remote electronic customer authorization interface adapted to: (i)
       receive the customer billing data for customer review and the request for
       payment instructions from said invoice presentation electronics, (ii)
       provide the customer billing data for customer review and the request for
       payment instructions to the customer; (iii) receive customer payment
       instructions from the customer in response to the request for payment
       instructions; and (iv) transmit the customer payment instructions from the
       customer directly to said invoicer, said payment instructions including at
       least a customer invoice account number and an associated customer
       payment account.

‘362 patent, col. 8, ll. 44-65 (emphasis added).

       The PNM appellees are electric and gas utilities and transmission companies

that offer their customers two online payment systems: Vended Solutions and Internal

Solution. Vended Solutions allows customers to pay their bills via a website maintained

by BillMatrix, a third party company. Internal Solution allows customers to pay their bills

on the PNM appellees’ websites via a one-time bank draft.

2007-1247, 2007-1252                         3
      Emergis brought suit against the PNM appellees and alleged that both Vended

Solutions and Internal Solution infringed on the ‘362 patent. The district court construed

eleven claim terms, of which two are relevant on appeal. The court construed the

requirement that customer payment instructions be sent “directly” from the customer to

mean “the customer sends payment instructions to the invoicer without reliance on upon

or through a third party service provider.” The court next construed the term “customer

invoice account number” to mean “a number or other identifier associated with the

customer’s account for its purchase of goods and services from the invoicer.”

      The PNM appellees moved for summary judgment and the district court granted

the motion.   The court found that Vended Solutions was operated by a third party

service provider that was not controlled in any way by the PNM appellees, and thus

customer payment instructions were not made directly to the PNM appellees.              The

district court also found that the Internal Solution system—although operated by the

PNM appellees—did not infringe because customers entered their account number to

log on to the system and not in response to a request for payment instructions from the

system.

      Otter Tail owns an electric utility that allows customers to pay their bills online via

a service called “ePay.” Emergis brought suit against Otter Tail and alleged that ePay

infringed on the ‘362 patent.      As relevant here, the district court construed the

requirement that customer payment instructions be sent “directly” from the customer to

mean “the payment instructions must be sent from the customer directly to the invoicer

without the intervention of any third-party service provider.”        Because ePay was

2007-1247, 2007-1252                         4
operated by Princeton eCom, a third party service provider, the district court granted

summary judgment on behalf of Otter Tail.

      Emergis filed timely appeals of both judgments. We have jurisdiction under 28

U.S.C. § 1295(a)(1).

                                     DISCUSSION

      We review a district court’s claim construction and grant of summary judgment

without deference. Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1456 (Fed. Cir.

1998) (en banc) (claim construction); Johns Hopkins Univ. v. CellPro, Inc., 152 F.3d

1342, 1353 (Fed. Cir. 1998) (grant of summary judgment). We draw all reasonable

inferences in favor of the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

255 (1986). Summary judgment is only appropriate if no genuine issues of material fact

exist and the movant is entitled to judgment as a matter of law. Celotex Corp. v. Catrett,

477 U.S. 317, 322 (1986).

                                       I. “Directly”

      We first review the district courts’ constructions of the term “directly.” Emergis

argues that both district courts were incorrect when they construed the term “directly” to

require that a customer’s payment instructions be sent from the customer to the invoicer

without the intervention of any third party service provider. Emergis contends that the

inventor’s preferred embodiment of the invention permitted an invoicer to use an outside

company for such tasks as webserver hosting, and that the term “directly” simply means

a system that does not utilize a customer-chosen consolidator. We cannot agree. The

specification does not make any such distinction and instead describes the third party

2007-1247, 2007-1252                        5
provider system as prior art without distinction as to who chooses the third party service

provider. The specification criticizes the use of any third party service provider and the

prior art diagram included in the specification refers generally to “3rd party service

providers” without making any distinction as to different types of providers. We thus

agree with both district courts that the term “directly” precludes the use of any third party

service provider.

       With this claim construction in mind we turn to the issue of infringement. Emergis

argues that, even under the district courts’ constructions of the term “directly,” the

Vended Solutions and ePay systems literally infringe on the ‘362 patent because the

operators of those systems, BillMatrix and Princeton eCom, act as agents for the

invoicers and, as agents, cannot be considered third-party service providers. But there

is no evidence in the record that the relationship between BillMatrix and Princeton

eCom and their respective invoicers extends beyond the typical business relationship of

servicer and client. BillMatrix and Princeton eCom are their own legal entities that are

not operated or controlled by the invoicers. The mere fact that a business relationship

exists between these parties does not dissolve their independence, whether or not they

are agents for some purposes. Moreover, BillMatrix and Princeton eCom are not just

providing a passive service like the lockbox service that financial institutions often

provide to their customers. Instead, they maintain the web system and initiate the billing

process with customers of the invoicers. In sum, because BillMatrix and Princeton

eCom are independent third party service providers, we affirm the district courts’

decisions that Vended Solutions and ePay do not infringe the ‘362 patent.

                         II. “Customer Invoice Account Number”

2007-1247, 2007-1252                         6
       However, this does not resolve the infringement questions as to PNM’s internal

solution, which, unlike PNM’s vended solution and Otter Tail’s ePay system, does not

use a third party service provider. We thus turn next to the district court’s construction

of the term “customer invoice account number.” The PNM appellees argue that the

district court incorrectly construed the term to mean “a number or other identifier

associated with the customer’s account for its purchase of goods and services from the

invoicer.”   They argue instead that the term should be construed to mean only an

invoice number.

       To arrive at its construction the district court relied on the explanation of

Emergis’s counsel. At a hearing, counsel explained that an invoicer needs to have

three distinct pieces of information in order to properly credit the customer’s invoice: (1)

the account on which the customer is paying, (2) the amount the customer is paying,

and (3) how the customer is paying. An invoice number is not necessary. The court

found that the specification, which provided that “[t]he invoice presentment electronics

may include a memory device to store information relating to customer bills and account

information” supported its interpretation that the term “customer invoice account

number” referred to the customer’s unique account and not individual invoices.

       We cannot agree with the district court’s construction.       The summary of the

invention used the phrases “invoice account number” and “customer invoice number”

interchangeably, but “invoice account number” was never used interchangeably with

“account number” or “customer number.”           Because the summary of the invention

supports a narrow interpretation of the term, we hold that the correct construction of

“customer invoice account number” is only an invoice number.             Further, because

2007-1247, 2007-1252                         7
Emergis does not dispute that the PNM appellees do not use invoice numbers as part of

the Internal Solution system, we affirm the district court’s judgment that Internal Solution

does not infringe on the ‘362 patent.

       The decision of the District Court for the District of Minnesota is AFFIRMED. The

decision of the District Court for the District of New Mexico is AFFIRMED IN PART and

REVERSED IN PART.

2007-1247, 2007-1252                         8