Court Opinion

ID: 9956139
Source: CourtListenerOpinion
Date Created: 2024-04-01 13:01:05.779076+00
Date Added: 2024-06-11T08:15:34.504421
License: Public Domain

Case: 22-1599   Document: 52     Page: 1   Filed: 04/01/2024

        NOTE: This disposition is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

                   ALEXSAM, INC.,
                   Plaintiff-Appellant

                            v.

   CIGNA CORPORATION, CIGNA HEALTH AND
   LIFE INSURANCE COMPANY, CONNECTICUT
  GENERAL LIFE INSURANCE COMPANY, CIGNA
          HEALTHCARE OF TEXAS, INC.,
               Defendants-Appellees
              ______________________

                       2022-1599
                 ______________________

    Appeal from the United States District Court for the
 Eastern District of Texas in No. 2:20-cv-00081-RWS-RDP,
 Judge Robert Schroeder, III.
                  ______________________

                  Decided: April 1, 2024
                 ______________________

     STEVEN RITCHESON, Insight, PLC, Marina del Rey, CA,
 argued for plaintiff-appellant.   Also represented by
 JACQUELINE KNAPP BURT, Heninger Garrison Davis, LLC,
 Atlanta, GA; TIMOTHY C. DAVIS, W. LEE GRESHAM, III, Bir-
 mingham, AL.

    RICARDO BONILLA, Fish & Richardson P.C., Dallas, TX,
Case: 22-1599    Document: 52      Page: 2    Filed: 04/01/2024

 2                        ALEXSAM, INC. v. CIGNA CORPORATION

 argued for defendants-appellees. Also represented by NEIL
 J. MCNABNAY, BRET THOMAS WINTERLE, LANCE E. WYATT,
 JR.
                  ______________________

     Before PROST, TARANTO, and HUGHES, Circuit Judges.
 HUGHES, Circuit Judge.
     AlexSam, Inc. appeals a summary judgment decision
 holding that Cigna Corp. and its affiliates did not infringe
 AlexSam, Inc.’s multifunction card system patent. Because
 AlexSam, Inc. failed to provide sufficient evidence of in-
 fringement, we affirm.
                               I
                              A
     AlexSam, Inc. (AlexSam) owns U.S. Patent
 No. 6,000,608 (the ’608 patent), disclosing a “multifunction
 card system.” J.A. 7. The basic premise of the patent is the
 ability to use a debit or credit card for purposes other than
 financial transactions. In the case at hand, the function
 would be to use a debit or credit card that could also pro-
 vide a healthcare provider with a cardholder’s medical ac-
 count information and other health-related information.
 See Appellant’s Br. at 3 n.1.
     AlexSam’s infringement claims center on independent
 claim 32 of the ’608 patent, which is representative:
      A multifunction card system comprising:
         a. at least one debit/medical services card
         having a unique identification number en-
         coded on it comprising a bank identification
         number approved by the American Bank-
         ing Association for use in a banking net-
         work;
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 ALEXSAM, INC. v. CIGNA CORPORATION                          3

         b. a transaction processor receiving card
         data from an unmodified existing standard
         point-of-sale device, said card data includ-
         ing a unique identification number;
         c. a processing hub receiving directly or in-
         directly said card data from said transac-
         tion processor; and
         d. said processing hub accessing a first da-
         tabase when the card functions as a debit
         card and said processing hub accessing a
         second database when the card functions
         as a medical card.
 ’608 patent at 15:65–16:11.
      Dependent claim 33, also at issue in this case, simply
 claims that the multifunction card includes a user’s medi-
 cal identification number. Id. at 16:12–14.
                               B
     On March 18, 2020, three years after the ’608 patent’s
 expiration, AlexSam filed suit against Cigna Corp., Cigna
 Health and Life Insurance Co., Connecticut General Life
 Insurance Co., and Cigna Healthcare of Texas, Inc. (collec-
 tively, Cigna) in the Eastern District of Texas, alleging that
 Cigna’s Consumer-Driven Health Plan debit cards in-
 fringed independent claim 32 and dependent claim 33 of
 the ’608 patent. Before holding a Markman claim construc-
 tion hearing, the trial court issued suggested preliminary
 constructions for disputed claims to facilitate discussion
 between the parties. AlexSam requested that the trial
 court adopt the same construction for the term “unmodi-
 fied” in claim 32 that was used in a virtually identical claim
 from a case 15 years prior. See AlexSam, Inc. v. Datastream
 Card Servs. Ltd., No. 2:03–CV–337, 2005 WL 6220095, at
 *9 (E.D. Tex. June 10, 2005) (hereinafter, Datastream).
 Compare J.A. 80 (AlexSam proposing the Datastream
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 4                        ALEXSAM, INC. v. CIGNA CORPORATION

 construction in this case), with J.A. 598 (AlexSam noting
 that since 2005, courts have used the Datastream construc-
 tion at AlexSam’s request).
     The trial court adopted the Datastream construction
 but added two commas to it at Cigna’s request for clarity.
 The final construction for “unmodified” in claim 32 reads:
 “a terminal, for making purchases, that is of the type in use
 as of July 10, 1997, and that has not been reprogrammed,
 customized, or otherwise altered with respect to its soft-
 ware or hardware for use in the card system.” J.A. 80.
     After the close of discovery, Cigna filed a motion for
 summary judgment of non-infringement and AlexSam filed
 a motion for summary judgment of infringement. After a
 hearing on the motions, the magistrate judge overseeing
 the case issued a recommendation that the trial court grant
 Cigna’s motion for summary judgment of non-infringe-
 ment, based on a proposed finding that AlexSam lacked
 sufficient evidence to establish Cigna’s infringement, and
 deny AlexSam’s summary-judgment motion. The trial
 court accepted the magistrate judge’s recommendation,
 granting Cigna’s motion and denying AlexSam’s motion.
 Alexsam, Inc. v. Cigna Corp., No. 2:20-cv-81 (E.D. Tex.
 Mar. 16, 2022), ECF No. 248. This appeal followed. We
 have jurisdiction under 28 U.S.C. § 1295(a)(1).
                              II
      Our court reviews a claim construction based on intrin-
 sic evidence de novo and reviews any findings of fact based
 on extrinsic evidence for clear error. SpeedTrack, Inc. v.
 Amazon.com, 998 F.3d 1373, 1378 (Fed. Cir. 2021). “We re-
 view summary judgment decisions under regional circuit
 precedent . . . .” Unwired Planet, LLC v. Apple Inc., 829
 F.3d 1353, 1356 (Fed. Cir. 2016). The Fifth Circuit reviews
 the grant of summary judgment de novo. Patel v. Tex. Tech
 Univ., 941 F.3d 743, 747 (Fed. Cir. 2019). “Summary judg-
 ment is appropriate when, drawing all justifiable infer-
 ences in the nonmovant’s favor, the movant shows that
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 ALEXSAM, INC. v. CIGNA CORPORATION                          5

 there is no genuine dispute as to any material fact and the
 movant is entitled to judgment as a matter of law.” Un-
 wired Planet, 829 F.3d at 1356; see also Fed. R. Civ. P.
 56(a); Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S.
 133, 150 (2000).
                              III
      AlexSam raises two issues on appeal: (1) whether the
 district court erred in applying the district court’s and par-
 ties’ agreed-upon claim construction for claim 32 of the ’608
 patent and (2) whether AlexSam lacked sufficient evidence
 for a reasonable jury to find that Cigna infringed the ’608
 patent. We address each in turn.
                               A
     During the Markman proceedings previously discussed
 at Section I.B, supra, the district court construed the mean-
 ing of the term “unmodified existing standard point-of-sale
 [(POS)] device,” which is found in claim 32 (element b) of
 the ’608 patent. At that time, AlexSam had proposed the
 construction. J.A. 598. Now, AlexSam argues that while
 claim 32 was construed correctly, the district court erred
 by ignoring the end of the construction, which states “for
 use in the card system.” We disagree.
     AlexSam has advocated for over fifteen years for the
 same claim construction contained in claim 32 of the ’608
 patent. See, e.g., Datastream, 2005 WL 6220095, at *9;
 AlexSam, Inc. v. Humana, Inc., No. 2:07–cv–288, 2009 WL
 2843333, at *4 (E.D. Tex. Aug. 28, 2009). For the first time,
 on summary judgment in this case, AlexSam argues for a
 broader construction of claim 32. AlexSam asserts that “for
 use in the card system” means that “a closed system that
 required single-function dedicated hardware to be installed
 in each retail location” would not result in infringement of
 the ’608 patent. J.A. 960. Conversely, a “general use POS
 that applied a BIN (or encrypted BIN) to access a pro-
 cessing hub over an existing banking network would
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 6                        ALEXSAM, INC. v. CIGNA CORPORATION

 [infringe], even if the POS device required some prepro-
 gramming and configuration.” J.A. 960. The magistrate
 judge “decline[d] to hear [AlexSam’s] waived claim con-
 struction arguments that could have and should have been
 raised in the first instance during claim construction.” J.A.
 108. The magistrate judge’s decision is in line with our
 precedent. Where a court has prescribed specific claim con-
 struction procedures and the parties have proceeded to-
 ward trial in reliance on them, the court has discretion to
 preclude parties from injecting “new claim construction
 theories on the eve of trial.” Bettcher Indus., Inc. v. Bunzl
 USA, Inc., 661 F.3d 629, 640–41 (Fed. Cir. 2011). Thus, we
 decline to consider AlexSam’s eleventh-hour arguments for
 a broader construction of claim 32 of the ’608 patent.
     AlexSam also argues that the magistrate judge did not
 properly apply the claim term “for use in the card system.”
 To support this allegation, AlexSam points to the magis-
 trate’s report and recommendation to the trial court. We
 find the record reflects the opposite. The magistrate judge
 did consider the term “for use in the card system” when it
 stated that “any modification to the software or hardware
 that impacts how the POS device would be used in the card
 system would fall outside of the scope of the claims.” J.A.
 109 (emphasis added). Even Cigna acknowledged this,
 stating that adding a sticker to a POS device or replacing
 its power cord would not qualify as a modification of the
 POS device “for use in the card system.” AlexSam is incor-
 rect in its assertion that the trial court did not give weight
 to the term “for use in the card system.”
     We previously applied the same claim construction lan-
 guage in Alexsam, Inc. v. IDT Corp., 715 F.3d 1336 (Fed.
 Cir. 2013), and left it undisturbed. Discussing AlexSam’s
 burden of proof for infringement, we stated that “Alexsam
 needed to prove both that these systems made use of ter-
 minals ‘of the type in use as of July 10, 1997,’ and also that
 those terminals ‘ha[d] not been reprogrammed, custom-
 ized, or otherwise altered with respect to [their]
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 software . . . for use in the card system.’” IDT, 715 F.3d at
 1341 (emphasis added and emphasis in original omitted).
 Thus, our court, like previous courts, appropriately consid-
 ered the limitation “for use in the card system,” despite
 AlexSam’s claims to the contrary. 1
                               B
     While AlexSam spends a significant amount of time ar-
 guing about claim construction issues, the reality is that
 this case hinges on AlexSam’s infringement claims against
 Cigna, which fail in light of our precedential decision in
 IDT. In that case, AlexSam alleged that IDT Corp. in-
 fringed its ’608 patent—the same patent at issue here. We
 held that AlexSam did not provide sufficient evidence that
 the alleged infringer used unmodified devices—its experts
 simply opined that the devices were unmodified because
 the technology from 1997 in these devices was unchanged
 for the purposes of the ’608 patent’s technology. IDT, 715
 F.3d at 1342. Thus, an expert’s opinion on what was simply
 “required” in order to activate an IDT card was different

     1    AlexSam contended to the trial court that “the
 [Federal Circuit] in IDT erred by ruling that the POS de-
 vices cannot be modified in any way . . . [therefore] the rea-
 soning in IDT cannot and should not be applied here.” J.A.
 991. To the extent that AlexSam contends that our decision
 in IDT was in error, we see none, and in any event, a panel
 of this court lacks the authority to overrule a prior panel
 absent a Supreme Court or en banc decision. Deckers Corp.
 v. United States, 752 F.3d 949, 964 (Fed. Cir. 2014) (“We
 have . . . adopted the rule that a panel of this court—which
 normally sits in panels of three, and not en banc—is bound
 by the precedential decisions of prior panels unless and un-
 til overruled by an intervening Supreme Court or en banc
 decision.”).
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 8                       ALEXSAM, INC. v. CIGNA CORPORATION

 from actual evidence that POS devices had been modified
 to utilize an IDT card. Id.
      Despite this binding precedent, AlexSam’s expert tes-
 timony in this case suffers from similar flaws. AlexSam’s
 experts stated that while modifications and software up-
 dates may have been implemented in POS devices since
 1997, they still function as a POS device in 1997 would
 function regarding the ’608 patent’s technology. But as the
 magistrate judge noted, “[a]t no point in either [AlexSam’s
 expert’s] report or [a fact witness’s] deposition did either
 one offer any evidence ‘whether modifications have, in fact,
 been made for any reason’ to the POS terminals used in the
 accused system,” as IDT requires. J.A. 112 (quoting IDT,
 715 F.3d at 1342). The magistrate judge continued,
 “[t]hough Alexsam need not necessarily have conclusive
 proof at this summary judgment stage that every transac-
 tion occurred at an ‘unmodified standard POS device,’ it
 does need enough evidence from which a reasonable jury
 could conclude that the transactions did actually occur at
 ‘unmodified standard POS device[s].’ Alexsam has pro-
 vided none.” J.A. 113. The magistrate judge correctly con-
 cluded that “AlexSam’s evidence in this case, like its
 evidence in IDT, simply shows that modifications of stand-
 ard existing POS devices were not required for use in the
 accused system. Binding precedent establishes that such
 evidence is insufficient.” J.A. 113. We concur.
                             IV
      We have considered the rest of AlexSam’s arguments
 and find them unpersuasive. We therefore affirm the dis-
 trict court’s decision that AlexSam failed to provide suffi-
 cient evidence of Cigna’s infringement of claims 32 and 33
 of the ’608 patent.
                        AFFIRMED