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Interactive Gift Express, Inc. (Now Known as E-Data, Corp.) v. Compuserve Incorporated, and Broderbund Software, Inc. And Intuit, Inc., and Internet Software Inc. (Now Known as Internet Shopping Network, Inc.), and Softlock Services, Inc., and Telebase Systems, Inc., and the Library Corporation, and Waldenbooks, and Ziff-Davis Publishing Company, and Apogee Software Limited, and Soft & Net Distribution, S.A.

Citations: 231 F.3d 859; 56 U.S.P.Q. 2d (BNA) 1647; 2000 U.S. App. LEXIS 27454Docket: 99-1324

Court: Court of Appeals for the Federal Circuit; November 2, 2000; Federal Appellate Court

Narrative Opinion Summary

The case involves Interactive Gift Express, Inc.'s appeal against a district court's judgment of non-infringement concerning the Freeny patent, which covers a system for reproducing information in material objects at point of sale locations. The primary legal issue revolves around the interpretation of patent claims, specifically whether the terms 'point of sale location,' 'material object,' and the functions of an 'information manufacturing machine' were correctly construed by the district court. The Federal Circuit Court found errors in the district court's interpretation of these terms, vacating the judgment and remanding for further proceedings. The court clarified that a home can be a 'point of sale location,' a 'material object' must be a distinct tangible medium, and an IMM must perform specific functions without necessarily having the four components of the preferred embodiment. Additionally, the court determined that the authorization code need only authorize copying, and that claim steps do not need to be performed sequentially, allowing for real-time transactions. The outcome reopens the possibility of infringement claims, pending further proceedings consistent with the proper claim interpretations.

Legal Issues Addressed

Authorization Code Requirements

Application: The court concluded that the authorization code in the Freeny patent is solely required to authorize copying, without necessitating inclusion of decoding information or an IMM code.

Reasoning: The authorization code need only authorize copying, as supported by the claim language and specification.

Claim Construction in Patent Law

Application: The Federal Circuit Court found that the district court erred in interpreting the claim terms of the Freeny patent, emphasizing that claim interpretation should prioritize intrinsic evidence, particularly the patent claims, specification, and prosecution history.

Reasoning: The Federal Circuit Court determined that the district court erred legally in interpreting five claim terms related to the case, leading to the vacating of the prior judgment and a remand for further proceedings.

Functions of an Information Manufacturing Machine (IMM)

Application: The court clarified that an IMM must perform five specific functions but is not required to comprise the four distinct components mentioned in the preferred embodiment.

Reasoning: An IMM must include components to store information for reproduction, receive a request reproduction code, transmit this code to a remote device, receive an authorization code from that device, and reproduce the requested information upon receiving the authorization code.

Material Object in Patent Claims

Application: The court determined that 'material object' refers to a tangible medium distinct from the IMM, to be removed post-purchase, and not necessarily sold independently as a blank format.

Reasoning: A 'material object' is defined as a tangible medium or device for embodying or storing information, which must be available for purchase at point of sale locations with at least one IMM.

Point of Sale Location Definition

Application: The court ruled that the 'point of sale location' in the Freeny patent includes a home setting, countering the district court's exclusion of homes from this definition.

Reasoning: The court ultimately sided with IGE, stating that the claim language does not exclude a home as a point of sale location.

Sequence of Method Steps in Patent Claims

Application: The court ruled that the sequence of steps in claim 1 of the Freeny patent does not need to be performed in the order listed, allowing for real-time transactions.

Reasoning: Claim 1 does not necessitate the predelivery or prestorage of information, allowing for real-time transactions where the requested information is sent to the IMM at or just before the consumer's request.