throbber
IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF PENNSYLVANIA
`
`SIGHTSOUND.COM INCORPORATED,
`A Pennsylvania corporation
`
`Plaintiffs
`
`vs.
`
`Civil Action No. 98-118
`
`inc., a Delaware corporation
`N2K,
`CDNOW,
`INC., A Pennsylvania
`Corporation, and
`CDNOW ONLINE,
`INC.,
`a Pennsylvania corporation
`
`Defendants
`
`PROCEEDINGS
`
`(Day 3)
`
`Transcript of Markman Hearing continuing on Friday,
`April 20, 2001, United States District Court,·Pittsburgh,
`Pennsylvania, before Honorable Kenneth J. Benson, U.S.
`Magistrate Judge.
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`APPEARANCES:
`
`For the Plaintiffs:
`
`.
`
`WILLIAM WELLS, Esq.
`BRIAN S. MUDGE, Esq.
`RICHARD F. RINALDO, Esq.
`
`For the Defendants:
`
`ERIC KRAEUTLER, Esq.
`MICHAEL BARCLAY, Esq.
`
`Reported by:
`Virginia S. Pease
`Official Court Reporter
`1031 USPO & Courthouse
`Pittsburgh, Pennsylvania 15219
`(412) 471-0377
`
`.
`
`Proceedings recorded by mechanical stenography. Transcript
`produced by computer-aided transcription.
`
`SST-029141
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`Apple Exhibit 1141 Page 00001
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`(Whereupon, court reconvened at 9:30 o'clock a.m.)
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`MATTHEW WITHERAL, Law Clerk:
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`Keep your seats,
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`please.
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`THE COURT: Good morning.
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`Always get a little worried as we approach a kind
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`of artificially set deadline, as we are here,
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`that
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`the
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`plaintiff, who exercising its legitimate rights in putting on
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`its case as it sees fit, starts to squeeze the time allowed
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`for the defendant, who has a right to put
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`its case on,
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`too.
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`How we doing on time, Mr. Mudge, you think?
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`MR. MUDGE:
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`I'm going to certainly finish the
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`Group I this morning. My expectation, my best guesstimate is
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`that
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`I would finish between 11:00 and 11:30.
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`THE COURT: Okay.
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`MR. MUDGE:
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`And I understand at that point
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`in time
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`defendants would make their presentation along those, on the
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`grouping of terms.
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`THE COURT: Okay.
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`And then, you back on for more
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`terms?
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`MR. MUDGE:
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`Yeah.
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`Then later this -- I'm presuming
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`they would not finish this morning, and then, we would come
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`back this afternoon for defendant
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`to finish, and then, we
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`would begin the second group of terms.
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`THE COURT: Okay.
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`MR. MUDGE: We recognize, Your Honor,
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`that given
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`3
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`the fact this day has only got so many hours in it, may, we
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`may not finish everything we intended to finish, and we
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`recognize that Your Honor may want to continue a portion of
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`that, dependent upon where we end up today, at a later time .
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`THE COURT: Okay, okay. What are you considering,
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`running over into Monday?
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`MR. MUDGE: Well, my understanding is that --
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`THE COURT: Mr. Barclay just gave me that
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`look that
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`Ir ve given Judges;
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`I have places to be and things to do.
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`MR. MUDGE:
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`I understand Mr. Barclay is not
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`available next week, so we have to,
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`I guess, consult, and
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`with Your Honor' s calendar work out a time that ' s convenient
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`for everybody to come back,
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`if that' s necessary.
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`THE COURT: Okay. This is no surprise to the
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`defense.
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`MR. KRAEUTLER: Your Honor,
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`I think our
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`presentation on this first grouping of claims, and you know
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`there's a lot concentrated in this grouping,
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`it could be, you
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`know, also approximately half a day.
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`I mean, could be short
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`of that .
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`It could be a full half day.
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`So,
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`I think it may
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`even be a moving into a' likelihood that we may need to ask
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`you for a little more time.
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`THE COURT: Okay, okay.
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`As long as that suits both
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`j
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`sides, you know, it suits me.
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`The wrongful death I was set
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`to try next week has settled, but you guys have schedules,
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`SST-029143
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`Page 00003
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`too, and I'm -- I'll accommodate them.
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`So, while most of my
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`week is opened up next week, if yours hasn't,
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`I understand
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`that, and we'll plug this in at
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`the next convenient date to
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`wrap it up.
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`I do not want to arbitrarily and tyrannically step
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`on anybody's.right to put their case in, and that
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`includes
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`the defendants.
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`I'm not going to shut this down at
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`5:00 o'clock this afternoon.
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`MR. BARCLAY:
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`One comment, Your Honor,
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`is we are
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`saying that we view at
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`least
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`the more important claim terms
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`first.
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`So, we're certainly going to get Group I out of
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`the
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`way for both sides.
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`We'll hopefully get Group II, which is the function
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`claims, out of
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`the way for both sides.
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`That
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`leaves the other
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`terms.
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`So,
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`if we have to come back for the other terms, at
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`least Your Honor has had,
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`in a compact manner, what we view
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`as most
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`important stuff.
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`And more importantly the,
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`the claim
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`terms that relate directly to what you heard testimony about
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`yesterday.
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`THE COURT:
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`And frankly,
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`from my perspective,
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`you've all moved with real expedition, and I don't think
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`anybody has been abusing the other side or me.
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`So, okay.
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`then.
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`Mr. Mudge.
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`MR. MUDGE: Good morning, Your Honor.
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`THE COURT: Good morning.
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`MR. MUDGE: We are again picking up with our first
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`group of claim terms. You'll recall, Your Honor, yesterday
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`we ended our discussion with visual audio signal, and our
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`construction of that, which was sound wave converted to
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`binary.
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`We're now turning to the remainder of Group I
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`claims terms.
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`The first one I would like to talk about this
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`9 morning is "party," and the Sightsound contention that
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`"party" should be construed to be an entity or its agent.
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`I have copies of
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`the handouts for the Court.
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`THE COURT:
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`Thank you.
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`MR. MUDGE: Your Honor, again using as an exemplary
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`claim, Claim 1 in the 573 patents,
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`to provide context, again,
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`in the context of
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`the invention as described by this claim,
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`we see the word "party" shows up in a number of places.
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`There's references to a first party,
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`to a second
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`party, first party having a memory, second party.having a
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`memory, and so forth. Our contentions that "party" should be
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`construed to be an entity or its agent are consistent, again,
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`21 with the canons of claim construction based upon the
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`intrinsic evidence that we have both in specification and the
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`prosecution file histories.
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`The specification, and there's an example of
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`the
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`. 734 file patent specification, refers to the Hard Disk 10 of
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`the first party or agent authorized to electronically sell
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`and distribute.
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`And importantly, Your Honor,
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`the prosecut ion
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`history is consistent with this understanding that "party"
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`was not meant
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`to be just a single entity or individual, but
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`could include agents. Statement made in an amendment during
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`the prosecution of
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`the first patent,
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`the 573 patent;
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`the
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`first party or its agent or representative, which is the same
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`thing.
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`It's a statement made by the applicant,
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`the statement
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`to the patent office.
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`Again,
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`the patent examiner received this filing
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`from the applicant.
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`The patent examiner didn't object
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`to
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`this. This is what
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`is contained in the file history. This
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`is what
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`the public has notice of when it reviews the file
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`history.
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`Another example from the file history,
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`this is the
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`same patent, 573 patent.
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`This is from an amendment now,
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`1991; previous slide was from 1990.
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`Again,
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`the applicant
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`is explaining the invention
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`and explaining how this works, and explaining what a party is
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`meant to be in the context of this invention.
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`It should be
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`noted that the first party is defined as a licensee,
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`franchiser, distributor, or whoever stands in for the first
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`party.
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`This is consistent with our construction;
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`it's
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`SST-029146
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`consistent with the understanding that "party" doesn't have
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`to necessarily be a single, defined entity, but can be a
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`related entity. Again,
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`this language was not objected to by
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`the examiner.
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`This language is what
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`the public sees when
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`they review the file history, Your Honor.
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`And again another example from the file history,
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`this is from a statement contained in the 734 file history.
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`It's a statement by the inventor; submitted a declaration:
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`The first party includes the agent who is authorized to
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`electronically sell and distribute music.
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`Again,
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`the consistent message here, Your Honor,
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`is
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`that when somebody reviews the patents,
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`they review the file
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`histories,
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`they are going to see that a party is not simply a
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`single entity, but a party as an entity, or agent, or
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`representative who can act on behalf of that party.
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`Now, where do we really differ with the defendants
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`on this issue? We really differ in that our contention is
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`that an entity or its agent
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`is how a party should be
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`construed.
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`And the defendant's position is that
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`the term
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`"party" should be restricted to a single entity, cannot
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`include agents, cannot
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`include representatives.
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`Now,
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`I will note that the language you see there
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`for their construction,
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`they also have words like,
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`financially distinct,
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`locations separate.
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`Let me just take a
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`25 minute to comment about
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`those.
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`SST-029147
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`I don't think Your Honor really has to rule on
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`those particular,
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`that particular terminology.
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`The idea that
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`a first party and a second party are financially distinct,
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`first of all, was built into Claim 1 of the 573 patent.
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`And
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`further,
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`it's been explained in the file history that the
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`first party and the second party have to be financially
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`distinct; otherwise, you don't have a sale. That's what a
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`sale transaction is;
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`two financially distinct parties.
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`So,
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`I don't think that Your Honor has to worry
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`about whether or not
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`to build financially distinct into the
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`definition;
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`it's there.
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`And not only explicitly in some
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`claim terms, but
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`increases through the notion of electronic
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`sales, which appears in claim sales .
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`Secondly,
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`the idea that
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`location is separate,
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`there
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`is express language in the claims that talk about
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`the
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`memories being expressly located separate and apart
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`from each
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`other.
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`You have them interconnected through
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`telecommunications lines. Telecommunications means things at
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`dif ferent
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`locations .
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`So again,
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`I don' t think Your Honor has
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`to rule one way or another whether the term "party" has to
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`include this notion of' separate locations, separate,
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`financially distinct.
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`The crucial
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`issue is,
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`that we think Your Honor
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`should look at
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`is whether the term "party" is restricted to
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`single entity or whether it can include agents. Sightsound' s
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`position, of course,
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`is based upon the specification and file
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`history.
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`The party can include an entity and/or its agent.
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`The defendants base their argument primarily on
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`this idea that if you include agent
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`in the definition of a
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`party, you now have something that varies with state law.
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`Well, a couple responses, Your Honor . First of
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`all, nowhere in intrinsic evidence is there any requirement
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`of a contractual or legal relationship between an entity or
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`its agent .
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`It is anybody who acts in the position of the
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`first party, somebody who stands in the shoes of
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`the first
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`party; does not require a formal
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`legal agency contract .
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`There's nothing in intrinsic evidence that refers
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`to a legal definition.
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`And I note that this argument
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`contrasts with the position with respect
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`to electronic sales .
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`Electronic sales is another term that appears in
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`the claims. Electronic sales could,
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`in theory, be something
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`that relies upon state law, because there are certainly state
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`laws that apply to sales transactions, and those state laws
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`vary from state to state. Nobody is saying, either side,
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`that you can't
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`include electronic sales as part of claim
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`language,
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`just because there should be some state law
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`implication.
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`So, we respectfully submit that defendants'
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`position regarding this idea of
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`legal relationship, or legal
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`required relationship is not something that should prevent
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`the definition of party to include an entity or its agent .
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`And, Your Honor,
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`I'm now going to move to the next
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`set of terms. Control and possession.
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`I have, again,
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`handouts for the Court.
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`THE COURT:
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`Thank you.
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`MR. MUDGE:
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`And, Your Honor, of course, we're
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`providing handouts to defendants' counsel of all these.
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`THE COURT: Very good.
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`MR. MUDGE: Okay. Your Honor, we have two terms at
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`issue here, control and possession, and I'm addressing these
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`together, because as Your Honor knows,
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`the defendants have
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`taken these terms and said that they belong together, and I
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`think it's helpful to -- for the Court
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`to consider them at
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`the same time;
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`to consider, yes,
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`in fact,
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`they are separate
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`and distinct.terms and they deserve separate and distinct
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`definitions.
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`Control. Sightsound contends that control should
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`be defined or construed to mean the authority to guide or
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`manage.
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`And possession. Sightsound contends that
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`possession is a separate, distinct term; should have a
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`separate meaning,
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`to have or hold as property.
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`And again,
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`let's take a look at Claim 1,
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`in the
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`context of Claim 1 how these terms appear. Well,
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`the very
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`first instance points out
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`the fact that these terms are
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`different.
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`The very first instance is a reference to the
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`first party controlling use of the first memory.
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`The word "possession" is not used in that express
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`context.
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`The word "possession" appears in other context
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`4 within the claim. For example, when you move down,
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`there's a
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`second party controlling use and possessing a second memory.
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`That's in connection with the step of transferring money
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`electronically. When we go down to the step of transmitting,
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`a transmitter in control and possession of
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`the first party; a
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`receiver in control and possession of
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`the second party.
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`Again, explicit terms used separately.
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`They are distinct.
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`Our
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`i.nterpretation, again, we're going to focus on
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`the intrinsic evidence, Your Honor. We're going to look at
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`the prosecution histories.
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`We've looked at Claim 1. We've looked at
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`the claim
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`language.
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`We are going to look at
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`the prosecution histories.
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`16 We'll
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`look at
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`the dictionary definition. We'll see our
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`definitions are consistent with prosecution histories, with
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`the definition in the dictionary.
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`Control and possession are separate and distinct
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`terms.
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`In fact,
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`they were added for the first time at
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`different times, different points in the prosecution history.
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`Looking at the 573 patent,
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`the first of
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`the three
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`patents,
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`in 1988 there was a preliminary amendment filed.
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`This was filed before any prior art was applied by the
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`examiner in a rejection of claims. At this stage the
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`applicant came in and modified claims and added a claim with
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`an element that recited controlling use. Transferring money
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`to a party controlling use of
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`the first memory.
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`At this point in time possession was not added to
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`the claim language at all. Possession was added later to the
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`claim language, and it was added at different parts of
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`the
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`claim. But to the specific reference we have here, you
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`remember back the slide when we showed Claim 1,
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`the very
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`first instance of controlling did not also have possession.
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`That's consistent with our understanding, consistent with the
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`public's understanding through notice that possession and
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`12 I control are separate and distinct terms.
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`Control. This term was expressly defined in the
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`intrinsic evidence.
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`The examiner looked at the term and
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`provided a definition. This is part of
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`the rich history that
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`Mr. Wells talked about
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`the other day. Examiner said,
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`applicant should note that
`
`the term "control" is interpreted
`
`to mean authority to guide or manage. That's explicitly,
`
`exactly the same definition that we contend today should be
`
`given to the term "control." This definition was not
`
`objected to, and clearly was carried forward in the
`
`understanding of the examiner and the applicant as these
`
`cases were prosecuted for the patent
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`laws.
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`And this is the
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`definition that the public sees when they review the file
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`2
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`history.
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`SST-029152
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`Possession. Again, we can look at possession and
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`look at
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`the meaning provided in the intrinsic evidence.
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`The
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`prosecution history ties possession with a notion of
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`ownership, but not physical.
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`And I'll come back to this
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`later,
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`in a couple of minutes. but it's not physical
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`possession.
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`We have here a response to an office action, again,
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`in the 573 file history.
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`It refers to another prior art
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`reference, and Your Honor will remember that
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`in the context
`
`of prosecution,
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`it's common to refer to a prior art reference
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`by a name.
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`So,
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`in this case Hughes is a reference to a prior
`
`art patent that the examiner had brought to the attention of
`
`the applicant.
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`In this connection the applicant was responding to
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`the rejection based upon Hughes. Hughes'
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`receiver, although
`
`located in the user's home,
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`is taught
`
`to be owned by the
`
`owner of
`
`the transmitter, somewhere located not
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`in the user's
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`home, and thus is in possession of
`
`the owner.
`
`So, here the applicant
`
`is saying, possession is
`
`tied to ownership, not who actually holds it physically.
`
`So,
`
`there's this notion of a property right. That's what
`
`possession is in the context of the file history.
`
`Again,
`
`further,
`
`further information of
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`the file
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`history. This is actually part of the same response to
`
`office action that we saw on the last slide.
`
`On the last
`
`SST-029153
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`Page 00013
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`14
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`1
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`slide there was discussion of possession.. Here in the same
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`response the applicant talks about control.
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`And consistent
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`with examiner's definition, consistent with the understanding
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`4 !
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`it ties control
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`to authority and management. Again,
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`this is
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`a response to one of the prior art rejections. Further,
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`the
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`owner clearly controls the receiver, since he must collect
`
`the coins therefrom..
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`If you're the only one who can collect coins,
`
`you've got
`
`to have some ability to manage and have authority
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`over that device. You've got
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`to be the one who has the key
`
`to get
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`in that coin box.
`
`And, Your Honor, we just provide for understanding
`
`that, even dictionaries are consistent. Control; exercise of
`
`14
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`authority or influence over,
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`to direct. This is from
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`15 Webster's.
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`24
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`25
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`Now, where do the parties differ, Your Honor?
`
`Again, we try to focus on those differences. Our contention
`
`is that control, possession are two separate terms; have
`
`separate and distinct meanings. Control means the authority
`
`to guide or manage. Possession,
`
`to have or hold as property.
`
`Defendants' require possession and control
`
`to be
`
`the same term, and they contend that it means in physical
`
`control and ownership.
`
`So,
`
`they require physical, and
`
`that's -- you recall,
`
`I referred to that earlier, Your Honor,
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`physical, and they do not allow for the fact
`
`that
`
`these terms
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`I
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`SST-029154
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`Page 00014
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`have separate· and distinct meanings; of
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`the limitations,
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`the
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`construction that defendants would put on these terms are not
`
`required.
`
`Intrinsic evidence does not suggest
`
`that you have
`
`to have physical control and physical ownership. Again,
`
`if
`
`you recall a couple of slides back, we talked about
`
`the prior
`
`art rejection based upon Hughes, and the argument was made
`
`before the patent office that in Hughes,
`
`the owner of
`
`the
`
`receiver was in possession, even though he didn't have
`
`physical domain over the receiver.
`
`And it wouldn't be consistent with the file history
`
`to say that any time you have "control," you also add the
`
`word "posses s ion . "
`
`That ' s inconsistent with the f ile
`
`history.
`
`That would add limitations to those claims.
`
`If
`
`there's a control element that doesn't recite possession,
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`it
`
`would add a limitation.
`
`That
`
`limitation is not required.
`
`Finally, Your Honor,
`
`I want to respond to the
`
`argument
`
`that you've seen in the papers the defendants
`
`assert .
`
`They argue that if you look at
`
`the interpretation
`
`that we've provided and if you look at
`
`the claims,
`
`that you
`
`would read the claims that objects, such as memory, control a
`
`party.
`
`We respectfully contend that that argument
`
`is
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`unreasonable .
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`People understand variations in how words are
`
`used;
`
`the terms active versus passive language.
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`SST-029155
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`Page 00015
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`The examiner never construed the claims this way.
`
`We don't think anybody, any reasonable person who reads these
`
`claims would arr.ive·at a conclusion, particularly given the
`
`specification on how the specification talks about electronic
`
`sales,
`
`that objects are in control of a party.
`
`So again,
`
`to conclude on this section,
`
`is control
`
`the authority to guide or manage.
`
`Possession, again,
`
`the term separately admitted
`
`into the file history, was not defined by the examiner when
`
`the examiner defined control. Possession, a separate term to
`
`have or hold as property.
`
`Your Honor, we'll move to our next;
`
`transferring
`
`money electronically.
`
`THE COURT:
`
`Thank you.
`
`MR. MUDGE:
`
`I'll provide handouts. Okay.
`
`Your Honor,
`
`transferring money electronically.
`
`Sightsound contends this means payment provided
`
`electronically. Very simple, straightforward definitión.
`
`Let's look at Claim 1 again,
`
`the 573.
`
`This term
`
`appears in the first sub-element
`
`listed under the preamble of
`
`21
`
`|
`
`the claim. Transferring money electronically via
`
`22
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`23
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`24
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`telecommunication line to the first party.
`
`In the context of
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`this claim, you see there's a transaction taking place.
`
`There's transferring of money, and there's a downloading of
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`25 i digital audio.
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`SST-029156
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`Page 00016
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`The intent from this claim,
`
`the intent of
`
`the
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`specification, when you read the specification,
`
`is that this
`
`is an electronic sales;
`
`this is the transaction-based system.
`
`The intent from the claim is that a buyer gains access with
`
`the ability to download digital audio signals, but has to pay
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`for it.
`
`That access does not come free.
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`And again, Your Honor, we look to the intrinsic
`
`evidence to see what
`
`the prosecution history says about this
`
`claim.
`
`In the context of an example from the 734 file
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`history there was a declaration submitted by the inventor,
`
`Arthur Hair.
`
`The inventor explained the meaning of
`
`transferring money electronically.
`
`One skilled in the art
`
`would know that an electronic sale inherently assumes a
`
`transferring of money -- and they provide some examples -- by
`
`providing an account number or a credit or debit card number,
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`which then allows for access to transferring of . a service or
`
`product .
`
`we'll come back to this language in a little bit
`
`with the next
`
`term, but I want to f ocus Your Horior on what
`
`is
`
`being said here about
`
`the transaction. Transferring of money
`
`by providing an account number or credit card or debit card
`
`number.
`
`These are methods of providing payment. Everybody
`
`understands, you walk into a department store, you want
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`to
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`buy something.
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`You give them a credit card number; give them
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`.
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`SST-029157
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`Page 00017
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`2s
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`a credit card. That's your payment.
`
`It's a common,
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`ordinarily understood mechanism for making a payment.
`
`Now, where do we differ from the defendants, Your
`
`Honor7 Again, we contend providing payment electronically is
`
`how the term should be construed.
`
`The defendants' definition, providing an
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`authorization, and I'll skip over the telecommunciations
`
`lines, which allows the first party access to funds.
`
`Now,
`
`they have construed the term in the context of providing or
`
`transferring money electronically through a
`
`telecommunications line, and that's why the word
`
`"telecommunications lines" appears in their definition.
`
`That's not really what we're differing with them
`
`about.
`
`The difference is the words "authorization" and
`
`"access to funds."
`
`These words don't appear in the
`
`prosecution history.
`
`It's not clear what
`
`they mean.
`
`It adds
`
`ambiguity, adds unnecessary limitations.
`
`The terms "authorization," "access to funds" are
`
`not required by the intrinsic evidence.
`
`So, authorization,
`
`it's not required by the intrinsic evidence;
`
`it's an
`
`unnecessary limitation.
`
`You can stop there and decide that
`
`based upon the intrinsic evidence.
`
`Authorization, access to funds;
`
`they are not
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`there.
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`They are not required limitations. But even if Your Honor
`
`were to consider there was some ambiguity,
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`that ambiguity is
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`SST-029158
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`Page 00018
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`resolved by the intrinsic evidence that's been provided;
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`evidence that is unrebutted by defendants.
`
`You'll recall
`
`in Dr. Tygar's declaration, Dr. Tygar
`
`discusses the nature of a credit card transaction as an
`
`example.
`
`In the context of
`
`the credit card transaction there
`
`may be -- it's an optional process -- there may be an
`
`authorization that takes place as part of
`
`the credit card
`
`transaction.
`
`The authorization may be something that the
`
`merchant has set up with a separate, a third party service,
`
`so before the merchant
`
`turns the goods over to somebody,
`
`they
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`may check with some service to see if that credit card
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`number,
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`if that payment can be authorized, but
`
`they don't
`
`necessarily have to do that.
`
`They may not use an
`
`authorization service for a transaction.
`
`It's optional.
`
`So,
`
`it's certainly not required,
`
`in any stretch of
`
`the
`
`imagination,
`
`to have this authorization.
`
`Similarly, access to funds. Which funds?
`
`The
`
`seller doesn't necessarily get
`
`funds right then and there,
`
`but if he takes your credit card number, you get your product
`
`or service. Whether or not
`
`the seller gets access to funds,
`
`again,
`
`in Dr. Tygar's declaration,
`
`is part of a separate
`
`transaction between the seller;
`
`the merchant on the one hand,
`
`23 I and the credit card company on another.
`
`It's not required
`
`24
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`25
`
`for the purposes of
`
`the transaction between the buyer and the
`
`seller.
`
`SST-029159
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`Page 00019
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`And indeed, Dr. Tygar presented evidence'that
`
`is
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`well understood,
`
`is that once a buyer gives you a credit card
`
`number,. this is the example that the defendants raise,
`
`it's
`
`well understood that once the buyer gives you a credit card
`
`number,
`
`that's payment.
`
`Now, defendants contended that the definition,
`
`providing payment electronically, would exclude a credit card
`
`transaction. But yet, again, Dr. Tygar dealt with that
`
`issue
`
`and provided evidence that you make payment by giving the
`
`credit card number.
`
`Your Honor, we respectfully believe that our
`
`definition is a simple, straightforward, common sense
`
`understanding that everybody would understand, and that the
`
`limitations that defendants would inject are unnecessary and
`
`unreasonable.
`
`We're going to move to selling electronically and
`
`similar terms.
`
`I have, again, handouts for Your Honor.
`
`THE COURT:
`
`Thank you.
`
`MR. MUDGE:
`
`Now, and this connects with this term.
`
`I want
`
`to note,
`
`this is related to the last term we talked
`
`about.
`
`As you'll see as we go through,
`
`transferring money
`
`electronically,
`
`the notion of providing a payment
`
`is part of
`
`23 | what's involved in electronic sales.
`
`24 I
`
`Electronic sales really refers to a transaction,
`
`25
`
`and as we'll see, providing a product or service
`
`SST-029160
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`Page 00020
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`electronically in exchange for payment provided
`
`electronically.
`
`And that payment provided electronically,
`
`again,
`
`it's the same definition we used in our discussion of
`
`transferring money electronically.
`
`Now, both sides have agreed that when the claims
`
`referred to selling electronically, electronically selling,
`
`or electronic sales,
`
`that there's really no distinction among
`
`those terms, other than the fact
`
`that
`
`there's a slight tense
`
`difference.
`
`They each are construed to mean the same thing.
`
`Again, as we suggest, producing a product or service
`
`electronically in exchange for payment provided
`
`electronically.
`
`Now, where do the words, electronically selling,
`
`where do they show up?
`
`As an example, Claim 4 of
`
`the 734
`
`patent discusses electronic sales. Refers to electronic
`
`sales, and refers to means for electronically selling.
`
`This is a system claim.
`
`It's slightly different
`
`form than the claim we've been looking at. Claim 1 is method
`
`claim. Claim 1 calls out steps;
`
`this calls out system set of
`
`hardware and software that
`
`implements the invention.
`
`Now,
`
`I'm just going to note for Your Honor that
`
`electronically selling in this context has the meaning --
`
`electronic sales has the meaning we're going to discuss.
`
`I'm
`
`not going to discuss the implication of the means for
`
`language. That will be part of another presentation we make
`
`SST-029161
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`Page 00021
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`in the second group of
`
`terms.
`
`So,
`
`I'm focusing on just the words "electronic
`
`sales," "electronically selling," "selling electronically."
`
`What do they mean?
`
`And focusing on the bottom of
`
`the claim here,
`
`the
`
`context
`
`in the invention is, as we see,
`
`telecommunications
`
`lines through which electronic sales through which this
`
`transaction takes place.
`
`The context
`
`is the transaction
`
`takes place through telecommunications lines,
`
`through
`
`electronic means, and the transaction, as we will see,
`
`involves getting a product or service, getting the digital
`
`audio signale in exchange for the money that's provided,
`
`the
`
`payment.
`
`Our
`
`interpretation is consistent with the
`
`prosecution history.
`
`And again,
`
`the intrinsic evidence
`
`includes the prosecution history.
`
`I
`
`just referred to the
`
`claim language itself.
`
`The claim language itself calls for
`
`electronic delivery, electronic payment.
`
`We'll go through and look at
`
`the prosecution
`
`history and see that it's consistent.
`
`In the 573 file
`
`history there's an amendment. This is one of a number of
`
`discussions that are in the file history about electronic
`
`sales.
`
`And here the applicant
`
`is talking about electronic
`
`sales and comparing it to a part of the specification,
`
`to one
`
`of the figures where it refers to telephone lines 30.
`
`SST-029162
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`Page 00022
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`Electronic sales over telephone lines 30;
`
`the device that's
`
`called for in the figure,
`
`the element called for in the
`
`figure, are terms which encompass the well-known process of
`
`providing a credit card number over a telephone line.
`
`And again,
`
`this is in the context of an electronic
`
`transaction.
`
`The invention is selling music in download
`
`fashion, and the invention clearly sets forth that
`
`the
`
`transaction,
`
`the payment as well as the delivery, are done
`
`electronically.
`
`The means,
`
`the inventor,
`
`then the meaning of
`
`electronic sales.
`
`Again, we saw this declaration a few minutes ago.
`
`This is a declaration from the 734 file history of
`
`the
`
`inventor, explaining the meaning of electronic sales.
`
`One skilled in the art would know that an
`
`electronic sale inherently assumes a transferring of
`
`·
`
`money -- we talked about that
`
`in the last topic,
`
`transferring
`
`money electronically -- which then allows for access to or
`
`transferring of a service or product
`
`from telecommunications
`
`lines. Again, electronic delivery.
`
`It's the same thing
`
`called for by the claim language.
`
`So, you have an electronic
`
`transaction.
`
`You pay electronically.
`
`You receive goods or
`
`services electronically.
`
`Now,
`
`in their papers defendants have pointed to a
`
`declaration filed, a similar declaration to this filed in the
`
`5'73 file history.
`
`And the language in that declaration was
`
`SST

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