ANSEL M. SCHWARTZ
`ATTORNEY AT LAW
`42S NORTH CRAIG ST.. SUITE 301
`PENNSYLVANIA 15211
`PITTSBURGH.
`
`TELEPHONE
`
`1412 621-9222
`
`FAx.
`
`14121 683-6388
`
`November 30 1993
`
`Mr. Arthur R. Hair
`330 Murrays Lane
`Pittsburgh PA 15234
`
`Dear Art
`
`I have reviewed C.D. de Ionghs memo dated November 22 1993 concerning
`your U.S. Patent 5191573. He has cited two patents U.S. Patent 4538179 and 4654799
`as prior art which deserve consideration however your patent
`is not anticipated
`by or
`obvious
`from either patent. Furthermore your patent would be literally infringed or
`the doctrine of equivalents by the transfer of audio or video signals from a
`infringed under
`first memory in possession and control of a first party to a second memory in possession and
`the transfer is a result of the second party using a
`control of a second party if
`telecommunication line in some way to ultimately cause money to be paid to the first party
`for the transfer unless it was authorized by you.
`
`Prior Art
`
`to the cited prior art patents U.S. Patent 4654799 to Ogaki et
`Referring first
`and is not of issue however
`for sake of
`al.. was cited in your patents prosecution
`is not anticipated by or obvious from U.S. Patent 4654799 for the
`argument your patent
`
`following reasons
`
`In Ogaki et al. there is no teaching or suggestion of transferring money
`electronically via a telecommunications line as is found in independent Claims I and 4 of
`In contrast Ogaki et at. only teaches to physically insert money into a
`your patent.
`is inserted into the instrument 1 a
`paper-money inlet 19 through which a 1000-yen bill
`100-yen coin slot 20 through which a 100-yen coin is deposited and a 10-yen coin slot 21
`See column 4 lines 20-25 of Ogaki et at. A paper-money
`a 10-yen coin.
`for depositing
`detector 53 and a coin detector 54 are provided
`to detect bills paper-money and coins
`deposited through the paper-money inlet 19 and the coin slots 20 21. Signals
`from these
`See column 7 lines
`detectors are used by a first CPU 44 to initiate transfer of the program.
`32-37 of Ogaki et at.
`
`CONFIDENTIAL
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`Mr. Arthur R. Hair
`November 30 1993
`Page 2
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`Furthermore Ogaki et al. does not
`teach or suggest
`the transmission of any
`type of signals in digital
`form as is found in your patents claims. Ogaki et al. only
`teaches to transfer software programs not audio or video digital signals.
`
`Moreover
`there is no teaching or suggestion of the second
`in Ogaki et al.
`party .. in possession of the second memory or in possession of the second receiver.
`Ogaki et al.
`teaches a vending
`system where the peripheral vending
`instruments I are visited
`by a purchaser who pays money to buy software programs. The purchaser
`is never taught
`be in possession of the vending instrument 1. Similarly the software program purchased
`by the purchaser in Ogaki et al.
`is transferred to a cassette 25 stored in the vending
`instrument 1. See column 4 lines 58-61. Only after the program is transferred to the
`cassette and it
`is released by the vendor instrument
`1 through the cassette tray 31 is it
`in
`thus the cassette is not
`possession of the purchaser.
`in possession of the second party
`during the step of transferring money electronically .. at a location remote from the
`second memory as found in Claims 1 and 4.
`
`to
`
`Referring to U.S. Patent 4538179 to Nakajima et al. it does not anticipate or
`make obvious your patent
`for the following reasons
`
`With respect
`to Nakajima et al. there is no teaching or suggestion of
`transferring money electronically as found in your independent Claims 1 and 4. For that
`matter there is no discussion whatsoever
`about
`financial aspects of transferring video or
`audio signals.
`Its focus is directed to routers and combining audio and video signals together
`in a time-division multiplexed environment.
`
`Infringement
`
`- Literal
`
`In regard to what would constitute
`an infringement of your patent
`the
`language of the claim or claims of a patent
`is the measure of the exclusive rights conferred
`by the patent. Thus any infringement of the patent
`involves construction and interpretation
`of the language of the claims.
`In interpreting the claims the courts consider not only the
`literal meaning of its terms but also the prior art and the prosecution
`history of the patent
`the Patent and Trademark Office otherwise known as the prosecution history.
`.ern son v.
`General Mills. Inc. 968 F.2d 1202 Fed. Cir. 1992.
`In relevant part
`the limitation at
`
`in
`
`issue
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`Mr. Arthur R. Hair
`November 30 1993
`Page 3
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`of Claims I and 4 in Mr. de Jonghs memo is the step of transferring money electronically
`via telecommunications lines. The literal
`interpretation of this limitation cannot mean
`physically sending money electronically through telecommunication lines so the literal
`interpretation must mean something else.
`The prior art and the prosecution history of your
`to determine the literal
`patent must be considered
`interpretation of this limitation.
`
`A review of the prosecution history of your patent
`the term
`reveals
`transferring money electronically refers to using credit cards debit cards charge accounts or
`the like in some way with telecommunication lines so money is caused to be paid by the
`second parry to the first party but without
`the first party having to collect coins from the
`second party. See for instance the response to the Patent Office dated June 23 1992 on
`page 18. Furthermore the amendments
`and arguments
`for patentability were based on
`distinguishing the possession and control of the second memory and the second receiver and
`how the sales between the first and second party occurred
`in regard to U.S. Patent 3990710
`to Hughes and U.S. Patent 3718906 to Lightner cited against your application by the. Patent
`Office. Ile Hughes patent only taught using coins or bills which were inserted into the
`vending machine of the first party and the Lightner patent while teaching to use credit cards
`over telecommunication lines taught
`the second memory and second receiver were in the
`possession and control of the first party.
`There were no arguments for patentability based on
`- the specific
`forms of the sales. Thus the interpretation of the claim language regarding
`transferring money electronically
`limited by statements made during the prosecution
`is not
`of your patent. Accordingly
`any form of payment that utilizes telecommunication lines and
`does not require coins to be collected by the first party is covered by the language
`transferring money electronically.
`
`respectively.
`
`Furthermore Claim I. or Claim 4 has to cover more than the use of credit
`cards. This is because Claim 3 and Claim 7 are dependent claims to Claim I and Claim 4
`Claims 3 and 7 more specifically define the step of transferring money
`to be providing a credit card number of the second party to the first party.
`electronically
`Consequently by the doctrine of claim differentiation Claims 1 and 4 must have the
`transferring step be interpreted broader than using a credit card or there would be no
`
`I/
`
`Claims 1 and 4 are the only independent claims of your patent. All
`the
`to them.
`other claims are dependent
`Independent claims are always broader
`they afford than their dependent
`in the protection
`claims.
`This is
`because
`the dependent claims have additional
`limitations.
`A limitation is
`a
`feature or aspect of
`the claim such
`to transfer money
`an having
`lines that needs to be present
`via telecommunication
`electronically
`to
`Each element and each limitation of a claim needs
`infringe the claim.
`to
`be present
`to infringe a claim.
`Pennwalt Corp.
`Inc.
`v. Durand-Wayjand.
`833 F.2d 931 Fed. Cir. 1987 cart. denied 485 U.S.
`961 1988.
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`Mr. Arthur R. Hair
`November 30 1993
`Page 4
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`difference between these independent
`and dependent claims. Accordingly any procedure
`whereby a connection
`between a first memory of a first party and a second memory of a
`second party occurs as a result of the second party connecting
`via telecommunication lines in
`some way with the first party for the purpose of causing money to be ultimately paid by the
`second party to the first party for the transfer of audio or video signals is covered by your
`patents claims.
`
`Infringement
`
`- Doctrine of Equivalents
`
`The aforesaid analysis identifies what would constitute literal
`infringement
`is what do the claims cover based on what
`that
`they mean.
`In an alternative analysis the
`same conclusion in regard to the transferring money electronically step can be arrived at
`by the doctrine of equivalents.
`Under the doctrine of equivalents a patentee must show that
`the accused process performs substantially the same function in substantially the same way
`to achieve substantially the same result as the claimed process for infringement
`to be found.
`Read Corp. v. Porter Inc. 970 F.2d 816 Fed. Cir. 1992.
`In the following analysis of the
`transferring money electronically
`step in regard to the doctrine of equivalents it
`is very
`infringement. This is because statements made during
`similar to the analysis of literal
`-prosecution may be used to a interpret claim language and b find prosecution
`history
`..estoppel The two doctrines must be distinguished.
`Interpreting claims in view of the
`prosecution history applies as a preliminary step in determining literal
`infringement.
`Prosecution
`history estoppel applies as a limitation to the doctrine of equivalents
`after the
`claims have been properly interpreted and no literal
`infringement
`is found. Loctite Comp. v.
`ltd. 781 F.2d 861 Fed. Cir. 1985.
`The doctrine of prosecution history
`Ultrasea
`limits the interpretation of claims so as to exclude any interpretation that may have
`estoppel
`been disclaimed or disavowed during prosecution
`to obtain claim allowance.
`Standard Oil
`Co. v. American Cyanamid Co. 774 F.2d 448 Fed. Cir. 1985. As mentioned above there
`were no amendments to the claims or limiting statements in the prosecution history of your
`to overcome prior art in regard to the limitation of transferring money electronically
`
`patent
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`ZI
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`1/
`
`The doctrine of claim differentiation states it
`is improper to read into
`an independent claim a limitation another claim not
`The
`forth explicitly.
`claim must be interpreted broader than the dependent claim or
`independent
`the existence of
`the independent
`claim would have no meaning. Whittaker
`corn. v VNR
`Industries inc.
`911 F.2d 709 Fed. Cir. 1990.
`
`It
`there is literal
`that
`should be noted
`infringement
`if
`the
`then
`doctrine
`of
`file wrapper estoppel
`is irrelevant.
`Fromson v. Advance
`Inc. 755 F.2d 1549 Fed. Cir. 19851.
`offset Plate.
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`Mr. Arthur R. Hair
`November 30 1993
`Page 5
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`itself.f
`
`Prosecution
`history estoppel does not bar the patentee from showing infringement
`by the doctrine of equivalents with respect
`to interpretation that have not been disclosed or
`Read CPL supra. Accordingly
`disclaimed during prosecution.
`the doctrine of equivalents
`to the transferring money electronically limitation.
`is applicable
`Furthermore as explained
`above the doctrine of claim differentiation is also applicable to cause the limitation of
`transferring money electronically
`to be interpreted broader than the limitation of providing
`a credit card number. Consequently such equivalence
`to the step of transferring money
`electronically includes paying by means of a subscription paying by an additional
`fee on the
`telephone bill or a hotel bill or using a debit card or charging an account.
`
`If
`
`To better understand why subscribing account charging phone or hotel bill
`charging or debit card charging
`to transferring money electronically the
`is equivalent
`doctrine of equivalents
`is applied in regard to the limitation of Claims 3 and 7 of providing a
`credit card number.
`the doctrine of equivalents is applied to this limitation of Claims 3
`and 7 and Claims t and 4 respectively must be broader than Claims 3 and 7 respectively
`because of the doctrine of claim differentiation then it can be assumed that Claims 1 and 4 at
`least covers such equivalence. First in the prosecution history itself
`in the last amendment
`on page 18 before allowance of the claims there is the statement
`the user can use other
`forms of monies besides coins such as credit cards charge accounts debit cards or the like
`so the owner is not burdened by having to come and collect the coins as is required
`with a vending machine. Thus the above-mentioned equivalences
`all achieve the same result
`in that no one has to come and collect the coins. They all achieve the same function in
`that a debt or charge in a form other than coins is created by the second party with the first
`party. Additionally they all are achieved
`substantially the same way as with a credit
`card. When a credit card is used a debt
`is ultimately created with the credit card company
`
`in
`
`s/
`
`$/
`
`There were limitations added
`to the overall
`via telecommunication
`transferring step such as
`lines or
`in possession
`the second memory
`and
`control of the second party and associated arguments
`to distinguish the
`prior art but none
`in regard to the limitation of
`transferring money
`electronically.
`
`There were also other
`to the claims but
`changes
`these changes were
`to
`clarify and more clearly
`define
`the invention.
`Prosecution history
`estoppel does not bar
`reliance
`on the doctrine of equivalents
`when
`the
`patents did not amend the claims to avoid cited prior art but
`to better
`define
`a patentable
`invention.
`Iii-Life
`Products
`Inc
`v. American
`National Water-Mattress
`Corn
`842 F.2d 323 Fed. Cir. 1988.
`The limitation of providing a credit card number-
`is also used because
`most people are familiar with the use of credit cards and it
`is easier
`to
`then understand
`such an analysis.
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`Mr. Arthur R. Hair
`November 30 1993
`Page 6
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`by the second
`party for the purchase of the video or audio signal
`from the first Party. A
`bill by the credit card company
`is sent by mail to the second party. The second party then
`typically writes a check to the credit card company to pay the bill. With a charge account
`the same process occurs.
`is owed to the phone company
`In a telephone bill
`credit card company but essentially the same process occurs. Alternatively it could be said
`the credit card number is the phone number for the first-party. When the proper phone
`number is dialed it causes the debt
`to be recorded and subsequently
`The hotel bill
`billed.
`charge is similar to the phone bill charge. When the hotel
`room patron calls the front desk
`the front desk responds by charging his room the credit card number and fills
`the order.
`He pays his bill
`later with a check or a credit card. With a debit card the. money is taken
`immediately from the second party and no bill need be sent and paid. But the process is
`essentially the same as with a credit card.
`
`rather than
`
`it
`
`Even in a subscription where a bill
`is typically sent out first by mail with
`each signal transfer
`there is something noted or debited
`to keep track of how many transfers
`are left before the subscription runs out. This could suffice for equivalence
`to the
`transferring money electronically
`because the subscription is charged or used up. Thus
`under the doctrine of equivalents account numbers debit cards phone bills hotel bills or
`subscriptions performs substantially the same function
`in substantially the same way to
`achieve
`substantially the same result as providing a credit card and thus are equivalent
`to
`transferring money electronically.
`
`soncluLion
`
`Whether by literal
`infringement or infringement
`through the doctrine of
`equivalents the limitation of transferring money electronically
`a second party
`precludes
`from connecting
`his second memory with a first partys memory to have video or audio
`signals transferred therefrom and paying for the transfer by invoking a telecommunication
`line is some way without your authorization.
`
`review.
`
`that you forward a copy of this
`I suggest
`I welcome a dialogue concerning
`this matter.
`
`report to Mr. de Jongh for his
`
`/
`
`The credit card company could be the first party.
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`Mr. Arthur R. Hair
`November 30 1993
`Page 7
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`If you have any further questions please feel
`
`free to call me.
`
`Very truly yours.
`
`-
`
`Ansel M.
`
`c w
`
`AMStlm
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