Stamps.com Inc. v. Endicia, Inc. , 437 F. App'x 897 ( 2011 )

NOTE: This disposition is nonprecedential
United States Court of Appeals
for the Federal Circuit
__________________________
STAMPS.COM INC.,
Plaintiff-Appellant,
v.
ENDICIA, INC. AND PSI SYSTEMS, INC.,
Defendants-Appellees.
__________________________
2010-1328
__________________________
Appeal from the United States District Court for the
Central District of California in case no. 06-CV-7499,
Judge Otis D. Wright II.
___________________________
Decided: June 15, 2011
___________________________
PHILIP J. GRAVES, Graves & Walton LLP, of Los Ange-
les, California, argued for plaintiff-appellant. With him
on the brief was MARJORIE A. WITTER. On the brief was
FLAVIO M. ROSE, Irell & Manella LLP, of Los Angeles,
California. Of counsel on the brief was SETH D.
WEISBERG, Stamps.com, Inc., of Los Angeles, California.
GREGORY A. LONG, Sheppard Mullin Richter & Hamp-
ton LLP, of Los Angeles, California, argued for defen-
STAMPS.COM v. ENDICIA 2
dants-appellees. With him on the brief were GARY A.
CLARK and DENNIS J. SMITH.
__________________________
Before BRYSON, DYK, and Prost, Circuit Judges.
Opinion for the court filed by Circuit Judge DYK. Circuit
Judge BRYSON concurs-in-part and dissents in part.
DYK, Circuit Judge.
Stamps.com, Inc. (“Stamps.com”) appeals a decision of
the United States District Court for the Central District
of California granting summary judgment of invalidity
with respect to fifteen claims of eight patents.
Stamps.com, Inc. v. Endicia, Inc., No. CV 06-7499 (C.D.
Cal. Nov. 9, 2009). We affirm.
BACKGROUND
Stamps.com and Endicia, Inc. (“Endicia”) are compet-
ing providers of Internet postage. On November 22, 2006,
Stamps.com filed suit against Endicia, alleging infringe-
ment of 629 claims of eleven patents owned by
Stamps.com. Endicia filed a counterclaim for a declara-
tory judgment of non-infringement and invalidity. On
March 17, 2008, the district court granted Endicia’s
motion to limit the number of asserted claims. The dis-
trict court ordered the parties to “limit[ ] the number of
asserted claims to fifteen,” but stated that it “w[ould]
remain flexible if plaintiffs [sic] show[ed] good cause for
additional claims.” Order Granting Mot. To Limit the
Number of Asserted Claims of the Patents-in-Suit,
Stamps.com, Inc. v. Endicia, Inc., No. CV 06-7499 (C.D.
Cal. Mar. 17, 2008). After some dispute about the number
of claims that should be considered for expert discovery,
the parties eventually filed Markman briefs limited to the
fifteen claims selected by Stamps.com. The district court
3 STAMPS.COM v. ENDICIA
eventually construed ten claim terms in fifteen claims
from seven patents. Three of these claim terms were part
of means-plus-function claims.
The eight patents-in-suit generally comprise four
groups of technologies:
a. U.S. Patent Nos. 5,812,991 (“’991 patent”),
6,249,777 (“’777 patent”), and 6,889,214 (“’214 pat-
ent”) pertain to systems and methods for purchas-
ing, transferring, and storing postage value over a
secure computer network.
b. U.S. Patent No. 6,233,568 (“’568 patent”) discloses
a system that allows users to compare the postage
rates of multiple services, such as the United
States Postal Service (“USPS”) and FedEx.
c. U.S. Patent Nos. 5,717,597 (“’597 patent) and
6,208,980 (“’980 patent”) teach the printing of post-
age value and graphics, such as company logos or
birthday messages, on envelopes and labels.
d. U.S. Patent Nos. 6,965,451 (“’451 patent”) and
6,982,808 (“’808 patent”) describe algorithms that
help standard printers reliably print stamps and
other graphics near the edge of an envelope.
After the parties filed cross-motions for summary
judgment, the district court granted summary judgment
for Endicia, holding claims 13, 50, and 89 of the ’214
patent anticipated; claim 23 of the ’568 patent indefinite;
and the remaining eleven claims obvious over a combina-
tion of various items of prior art. The district court’s
conclusions are summarized in the table below:
Asserted Relevant Prior
Patent Filing Date
Claims Art
STAMPS.COM v. ENDICIA 4
Obvious:
’991 October 2, Whitehouse ’562
7, 42, 76
patent 1996 patent;
Tygar-Yee article
Obvious:
’777 Lewis ’565 pat-
July 15, 1998 3, 50, 63
patent ent;
Tygar-Yee article
Anticipated:
’214 August 23,
13, 50, 89 Ogg-Chow ’406
patent 2000
patent
’568
June 29, 1998 23 Indefinite
patent
Obvious:
’597 October 11, Whitehouse ’562
7
patent 1995 patent;
DAZzle
’980 November 5, Obvious:
35
patent 1997 DAZzle
August 30, Obvious:
’451 1999 Microsoft Word
17
patent (provisional for Windows 95;
application) DAZzle;
5 STAMPS.COM v. ENDICIA
AddressMate for
Windows v2.15
Obvious:
August 30, Microsoft Word
’808 1999 for Windows 95;
32, 39
patent (provisional DAZzle;
application)
AddressMate for
Windows v2.15
A brief description of each prior art reference follows:
a. Whitehouse ’562 Patent: Endicia’s U.S. Patent
No. 5,319,562 (“Whitehouse ’562 patent”) is titled “System
and Method for Purchase and Application of Postage
Using Personal Computer.” The patent was filed on
August 22, 1991, by Harry Whitehouse. The Whitehouse
’562 patent teaches a system in which users can use their
personal computers (“PCs”) to communicate with a com-
puter at the postal authority over a modem. The White-
house ’562 patent was asserted prior art against the ’991
and ’597 patents.
b. DAZzle Software: Endicia’s DAZzle software
program (“DAZzle”) is a software program that has been
offered for sale, sold, and distributed by Endicia since
1991, including the DAZzle Designer (1997) and the
DAZzle User’s Guide version 2.5 (1992-1995). The earli-
est version of DAZzle was copyrighted no later than 1992.
The software enabled users to create and print addresses,
graphics, and bar codes on envelopes from their com-
STAMPS.COM v. ENDICIA 6
puters. The DAZzle software and user guide were as-
serted as prior art against the ’597, ’980, ’451, and ’808
patents.
c. Tygar-Yee Article: On March 1, 1993, J.D. Tygar
and Bennet Yee coauthored a paper entitled “Cryptogra-
phy: It’s Not Just for Electronic Mail Anymore,” CMU-CS-
93-107 (“Tygar-Yee” article). J.A. 9584. This paper
described a PC-based network to enable remote users to
access and print postage from an account. This account
could be replenished via a secure online transaction with
the USPS. The Tygar-Yee article was asserted as prior
art against the ’991 and ’777 patents.
d. Lewis ’565 Patent: Defendant’s U.S. Patent No.
6,233,565 (“Lewis ’565 patent”) was filed on February 13,
1998. The patent teaches “[a] system and methods for
conducting Internet based financial transactions between a
client and a server” wherein “the client issues a transac-
tion request to the server and the transaction server, in
response to a client transaction request, executes an
electronic payment transaction at the server.” Lewis ’565
patent, at [57]. The Lewis ’565 patent was asserted as
prior art against the ’777 patent.
e. Ogg-Chow ’406 Patent: U.S. Patent No. 6,868,406(“Ogg-Chow ’406 patent”) was filed on October 16, 2000,
and is assigned to Stamps.com. The patent is titled,
“Auditing Method and System for an On-Line Value-
Bearing Item Printing System.” The Ogg-Chow ’406
patent was asserted as prior art against the ’214 patent.
f. Microsoft Word for Windows 95 (“Word 95”):
Word 95 is a word processing program that allows users to
print and preview envelopes and labels. Word 95 was
asserted as prior art against the ’451 and ’808 patents.
7 STAMPS.COM v. ENDICIA
g. AddressMate for Windows v2.12 (“Address-
Mate”): AddressMate is a software program that attaches
to word processing programs. This program helps users
manage their address books, merge addresses into docu-
ments, and print addresses and barcodes onto envelopes
and labels. AddressMate was asserted as prior art
against the ’451 and ’808 patents.
Following summary judgment, Stamps.com moved to
pursue additional claims beyond the fifteen claims that
were the subject of the summary judgment motion. The
district court implicitly denied this motion when it en-
tered judgment for Endicia.
Stamps.com timely appealed, and we have jurisdiction
pursuant to 28 U.S.C. § 1295(a)(1). Anticipation is a
question of fact, Atlas Powder Co. v. Ireco, Inc., 190 F.3d
1342, 1346 (Fed. Cir. 1999), and obviousness is a question
of law based on underlying facts, In re Kubin, 561 F.3d
1351, 1355 (Fed. Cir. 2009). A grant of summary judg-
ment of invalidity on grounds of indefiniteness is also a
question of law, which we review de novo. Hoffer v.
Microsoft Corp., 405 F.3d 1326, 1328 (Fed. Cir. 2005).
Summary judgment is appropriate when there is no
genuine issue of material fact and the moving party is
entitled to judgment as a matter of law. Immunocept,
LLC v. Fulbright & Jaworski LLP, 504 F.3d 1281, 1286
(Fed. Cir. 2007).
DISCUSSION
The district court in large part did a careful and thor-
ough job reviewing the patents-in-suit, and it correctly
concluded that the asserted claims were indefinite, an-
ticipated, or rendered obvious over a combination of prior
art. In light of the district court’s thorough opinion, we
need not explicitly address every one of the many issues
raised by the patentee on appeal.
STAMPS.COM v. ENDICIA 8
I
Stamps.com argues that the district court abused its
discretion in refusing to grant its motion to pursue addi-
tional claims beyond the litigated fifteen claims. Even
though Stamps.com conceded the court’s authority to
impose a limit on the number of claims, it contends that
the district court’s denial of its motion to pursue addi-
tional claims violates its due process rights because a
subsequent suit against Endicia on the remaining claims
could be barred by res judicata. Recently, in In re Katz
Interactive Call Processing Litigation, --- F.3d ---, 2011
WL 607381, at *2–3 (Fed. Cir. Feb. 18, 2011), we held that
limiting a plaintiff patentee to sixty-four claims from a
large number of asserted claims was permissible if the
district court left open the door for the assertion of addi-
tional claims on a showing of need. Where the patentee
“did not file a motion to add claims with the requisite
showing of need,” it “cannot legitimately complain that it
did not have a meaningful opportunity to be heard.” Id.
at *4 (internal quotation marks omitted). Here, as in
Katz, the district court’s order to limit the claims was not
immutable. The district court clearly stated that it would
“remain flexible if plaintiffs [sic] show[ed] good cause for
additional claims.” Order Granting Mot. To Limit the
Number of Asserted Claims of the Patents-in-Suit,
Stamps.com, Inc. v. Endicia, Inc., No. CV 06-7499 (C.D.
Cal. Mar. 17, 2008). The district court also stated that,
“[i]f it can be demonstrated . . . that [fifteen claims] is
absolutely unworkable, then we will discuss [number
sixteen]. If necessary, we will discuss [number seven-
teen].” J.A. 14609. Nonetheless, when Stamps.com
requested to add additional claims, it did not even at-
tempt to make a good cause showing. The district court
did not abuse its discretion in refusing to allow the addi-
tional claims.
9 STAMPS.COM v. ENDICIA
II
We next consider the district court’s ruling as to the
invalidity of the fifteen asserted claims. The district court
held that the asserted claims of the ’991 and ’777 patents
were obvious over a combination of prior art, including
the Tygar-Yee article. That article was asserted as §
102(b) prior art. Section § 102(b) provides, in relevant
part, that an invention is not patentable if it was “de-
scribed in a printed publication” more than one year prior
to the filing date of the application from which the patent
issued. 35 U.S.C. § 102(b). A prior art reference cannot
constitute a “printed publication” under §102(b) if it has
not been made “publicly accessible.” In re Klopfenstein,
380 F.3d 1345, 1348 (Fed. Cir. 2004). That inquiry fo-
cuses on the reference’s accessibility to the “public inter-
ested in the art.” Id. Stamps.com contends that the
Tygar-Yee article should not have been treated as § 102(b)
prior art because it was not publicly accessible.
We hold that the Tygar-Yee article was publicly ac-
cessible. The Tygar-Yee article, dated March 1, 1993, was
written by Tygar and Yee and is entitled “Cryptography:
It’s Not Just for Electronic Mail Anymore.” J.A. 6416–39
(emphasis in original). This article was sponsored by the
United States Air Force, a Presidential Young Investiga-
tor Award, and Motorola, Inc. In an expert declaration
submitted by Tygar in this case, he listed the Tygar-Yee
article as prior art, J.A. 7951, and stated that he under-
stood that “prior art consist[s] of publications . . . dated
before the invention or more than one year before the
filing of the patent application,” J.A. 7961. Other evi-
dence confirmed the public availability of the article. For
example, the article was catalogued by Carnegie Mellon
University and listed as available on its indexed website
in 1993 as “CMU-CS-93-107.ps.Z.” This document was
listed as “last modified” on May 8, 1993. J.A. 10964.
STAMPS.COM v. ENDICIA 10
Significantly, that date is several weeks after the date
appearing in the article itself, suggesting that the website
was not simply parroting the date appearing in the arti-
cle. Moreover, Carnegie Mellon's website is a public
forum where leaders in the field of computer science and
other related fields certainly would have had access to the
Tygar-Yee article. The paper was additionally cited in a
second paper presented by Tygar and Yee in 1994, and
Stamps.com itself identified the Tygar-Yee article as
bearing a 1993 date in an information disclosure state-
ment filed in connection with another patent that is
currently not in suit.
Stamps.com did not submit any evidence to rebut the
evidence that this paper was published in 1993. Thus, no
genuine issues of material fact remain as to whether the
article was publicly available more than one year prior to
the filing dates of the ’991 patent (October 2, 1996) and
the ’777 patent (July 15, 1998). The district court did not
err in treating the Tygar-Yee article as § 102(b) prior art.
III
The district court also did not err in finding claims 7
and 42 of the ’991 patent obvious over the Tygar-Yee
article. Claim 7 depends from claim 1, which recites:
[A] closed metering system for transferring a
value from a portable processor device having rep-
resentative value stored therein coupled to a first
processor-based subsystem to selected ones of a
plurality of affiliated individual processor-based
subsystems via a communication link coupling
said first subsystem and said selected affiliated
subsystem, said closed metering system compris-
ing: . . . means, executing at least in part on the
second subsystem, for transferring a predeter-
mined amount of said representative value from
11 STAMPS.COM v. ENDICIA
the portable processor via the communication link
to said second subsystem.
’991 patent, col.28 ll.38–53. Claim 7 adds to claim 1
“means . . . for queuing requests from other ones of the
affiliated subsystems, the requests being communicated
via the communication link, the requests seeking transfer
of individual predetermined amounts of the representa-
tive value from the portable processor.” Id. col.29 ll.7–13.
Claim 42 depends from claim 40. Claim 40 recites:
A method for transferring a pecuniary value from
a portable memory device coupled to a first gen-
eral purpose processor-based system to a second
general purpose processor-based system via a
communication link, . . . said method comprising
the steps of: . . . . printing, by said second system,
an indicia having said pecuniary value.
Id. col.31 ll.28–44. Claim 42 adds to claim 40 a step of
“queuing information communication between said first
system and a plurality of processor-based systems, the
information communication comprising requests by ones
of the plurality of systems for pecuniary value from said
portable memory.” Id. col.31 ll.51–55.
The district court found that the Tygar-Yee article
taught “transferring value from the ‘first subsystem’ (e.g.,
a home PC or postage meter) to ‘affiliated systems’ (e.g.,
USPS network) via a communications link,” as required
by claim 7. Stamps.com, slip op. at 19.
Stamps.com argues, inter alia, that Tygar-Yee does
not disclose such a system because Tygar-Yee requires the
user to recharge their electronic postage meter “by phone,
using credit card numbers or direct electronic funds
transfer from payment.” J.A. 9598. Thus, according to
Stamps.com, Tygar-Yee does not disclose a “USPS net-
STAMPS.COM v. ENDICIA 12
work” because the transfer comes from a bank account
and not from a PC storage device connected to the USPS
network. Claim 7, however, is not restricted to communi-
cation with a USPS network. It only requires that value
be transported from a “first subsystem” to “affiliated
systems” via a communications link. A transfer from a
bank account, as allegedly disclosed in Tygar-Yee, could
certainly be considered to be part of an “affiliated system.”
Stamps.com also argues that the Tygar-Yee article did
not disclose a “queuing” means 1 or a “queuing” step as
required, respectively, by claims 7 and 42. Nevertheless,
Tygar-Yee teaches that its secure coprocessors can handle
concurrent transactions from multiple workstations even
if “users are unlikely to require many concurrent transac-
tions.” See J.A. 6428 (emphasis added).
In addition, Stamps.com argues that claims 7 and 42
teach a “download 44 cents-print 44 cents” usage pattern
that is very different from the “download 50 dollars, print
44 cents” bulk-refill pattern allegedly disclosed in the
Tygar-Yee article. Appellant’s Br. 25. Because this
argument was not properly raised below, it is not properly
before us on appeal. See, e.g., Sage Prods., Inc. v. Devon
Indus., Inc., 126 F.3d 1420, 1426 (Fed. Cir. 1997).
1 Stamps.com argues that the district court erred
when it failed to construe the means-plus-function limita-
tions of various asserted claims in the course of its obvi-
ousness inquiry. After closely examining Stamps.com’s
arguments, we conclude that Stamps.com suffered no
prejudice from the district court’s failure to identify
corresponding structure for each of the contested means-
plus-function limitations because the structure disclosed
in the asserted prior art was substantially identical to the
structure identified in the specifications.
13 STAMPS.COM v. ENDICIA
We therefore find no error in the district court’s con-
clusion that claims 7 and 42 of the ’991 patent are obvious
over the Tygar-Yee article
IV
Stamps.com argues that the district court erred in not
considering the secondary considerations it offered to
rebut arguments that the asserted claims of the ’991 and
’777 patents were obvious. These secondary considera-
tions included a showing of expert skepticism and com-
mercial success. However, Stamps.com did not
demonstrate the requisite “nexus between the merits of
the claimed invention” and the “evidence of secondary
considerations.” Muniauction, Inc. v. Thomson Corp., 532
F.3d 1318, 1327 (Fed. Cir. 2008) (quoting Ruiz v. A.B.
Chance Co., 234 F.3d 654, 668 (Fed. Cir. 2000)); see also
In re Huang, 100 F.3d 135, 140 (Fed. Cir. 1996) (holding
that the patentee’s proof must show “that the sales were a
direct result of the unique characteristics of the claimed
invention”). Given the strong showing of obviousness, we
find that the evidence of secondary considerations was
inadequate to overcome the legal conclusion that the
contested claims would have been obvious. See Leapfrog
Enters., Inc. v. Fisher-Price, Inc., 485 F.3d 1157, 1162
(Fed. Cir. 2007).
V
The district court found claim 76 of the ’991 patent
invalid over Tygar-Yee, citing the expert declaration of
Tygar. However, Stamps.com’s expert, Patrick McDaniel,
concluded that the Tygar-Yee article did not disclose the
“blind passing of data between the processors,” as re-
quired by claim 74, on which asserted claim 76 depends.
Claim 74 recites, in relevant part:
STAMPS.COM v. ENDICIA 14
transferring said predetermined amount of mone-
tary equivalent value from the second system to
the refreshable memory device coupled to said
first system via said communication link, said
predetermined amount of monetary equivalent
value being passed blindly by said first system
from said second system to said refreshable mem-
ory device.
’991 patent, col.34 ll.25–31 (emphasis added). The district
court construed “passed blindly” to mean “to pass infor-
mation, without interpreting it to determine whether to
pass it along to its destination.” Claim Construction
Order, Stamps.com, Inc. v. Endicia, Inc., No. CV 06-7499
(C.D. Cal. June 15, 2009).
By way of illustration, the “second system” in one em-
bodiment could be the computer system at a post office.
The refreshable memory device could be a postage dis-
penser, which is coupled to a “first system,” such as a
user’s PC. See ’991 patent, col.11 ll.56–60 (“Typically, a
user will buy a portable postage dispensing device 18,
which could contain a quantity of postage, included with a
copy of the E-STAMP program. The user will then install
the E-STAMP program on the user’s host processor-based
system 10.”). In order to replenish the postage dispenser,
claim 74 requires the post office to send postage credit to
the postage dispenser via the PC. See id. col.34 ll.25–31.
The PC must receive the postage credit from the post
office and blindly pass the information to the postage
meter. See id. col.21 ll.1–7 (“[W]here [first system] re-
mains a part of the communication bus between [second
system] and the postage [dispenser], such commands
must pass through [the first system]. The commands may
be handed blindly to the postage [dispenser] by the E-
STAMP program operating on system 10.”). In this
embodiment, the PC must pass the postage credit without
15 STAMPS.COM v. ENDICIA
interpreting this information to determine whether to
pass it along to the postage meter.
Stamps.com now argues that summary judgment of
obviousness should not have been granted because there
is a factual dispute as to whether “pass[ing] blindly” was
disclosed by Tygar-Yee. No such factual dispute exists
because Tygar-Yee clearly disclosed passing blindly a
“predetermined amount of monetary value.” ’991 patent,
col.34 ll.29–30. Tygar-Yee disclosed a “secure coproces-
sor,” (e.g., postage dispenser) that could be “added to a
computer.” J.A. 9591. A secure coprocessor ensures that
data about postage transactions can be protected from
attacks by computer hackers. By storing the information
in a separate secure coprocessor, the information is not
vulnerable even when the PC is under attack. See, e.g.,
J.A. 9590 (noting that when information about postage
transactions is stored on a PC, “[an] adversary may
replace the memory subsystem in the computer with dual
ported memory, and just read the [cryptographic] keys as
they are used”).
Tygar pointed out that the Tygar-Yee article de-
scribed encrypting postage information to protect against
attacks so that a PC could pass the funds from a post
office to a “secure coprocessor” without interpreting the
information: “[A]ll interpretation of the monetary equiva-
lent value [postage credit] is performed inside the secure
coprocessor and not by the PC to protect against
fraud. . . . Thus, the funds transferred to the secure
coprocessor from the post office, are encrypted and not
interpreted until received by the secure coprocessor—i.e.,
the PC passes the [postage credit] to the secure coproces-
sor blindly.” J.A. 8059. Indeed, the PC does not contain
the keys to encrypt or decrypt the postage information—
these keys reside in the secure coprocessor and the post
office computers.
STAMPS.COM v. ENDICIA 16
McDaniel countered that “[t]he mere use of encryption
does not say anything about how data is passed.” J.A.
10411. McDaniel's testimony, however, is inconsistent
with a proper understanding of the pertinent claim lan-
guage. The specification of the '991 patent makes clear
that the reference to the “predetermined amount of mone-
tary equivalent value being passed blindly” forecloses
decryption of the “monetary equivalent” data. Claim 76
requires only that the “monetary equivalent value” be
“passed blindly.” This does not preclude the recited “first
system” from interpreting any information from the
“second system” that might be used to redirect the en-
crypted data to the “refreshable memory device.” As
noted, the Tygar-Yee article discloses a system in which
the “first system” does not decrypt the “monetary equiva-
lent” data that is sent from the “second system,” but
determines from the package of information that includes
the encrypted data that the data should be forwarded to
the “refreshable memory device.” Accordingly, we hold
that Tygar-Yee clearly teaches the blind passing of mone-
tary equivalent data between the processors, and there is
no genuine issue of material fact as to whether claim 76 of
the '991 patent would have been obvious.
VI
The district court found claims 3, 50, and 63 of the
’777 patent obvious over the Tygar-Yee article and the
Lewis ’565 patent, concluding that the Lewis ’565 patent
was § 102(a) prior art. Section 102(a) provides that a
person is not entitled to a patent if “the invention was . . .
patented . . . in this or a foreign country, before the inven-
tion thereof by the applicant for patent.” 35 U.S.C. §
102(a). Section 102(g) contains the basic rule for deter-
mining priority. Id. § 102(g); Mahurkar v. C.R. Bard,
Inc., 79 F.3d 1572, 1577 (Fed. Cir. 1996). This section
provides that “[a] person shall be entitled to a patent
17 STAMPS.COM v. ENDICIA
unless . . . the invention was made in this country by
another inventor who had not abandoned, suppressed, or
concealed it.” 35 U.S.C. § 102(g)(2). Priority of invention
“goes to the first party to reduce an invention to practice
unless the other party can show that it was the first to
conceive the invention and that it exercised reasonable
diligence in later reducing that invention to practice.”
Mahurkar, 79 F.3d at 1577. A showing that a patent was
conceived at an earlier date and reduced to practice with
reasonable diligence is called an effort to swear behind an
earlier patent. See, e.g., Honeywell Inc. v. Victor Co. of
Japan, Ltd., 298 F.3d 1317, 1327 (Fed. Cir. 2002).
Therefore, “if a patentee's invention has been made by
another, prior inventor who has not abandoned, sup-
pressed, or concealed the invention, § 102(g) will invali-
date that patent.” Apotex USA, Inc. v. Merck & Co., 254
F.3d 1031, 1035 (Fed. Cir. 2001). The Lewis ’565 patent
was filed on February 13, 1998, and constitutes § 102(a)
prior art as long as the ’777 patent was not conceived at
an earlier date and reduced to practice with reasonable
diligence. Stamps.com argues that the Lewis ’565 patent
could not be § 102(a) prior art because the ’777 patent had
an earlier conception date, or that, at a minimum, a
genuine issue of material fact remains as to the concep-
tion date of the ’777 patent.
At issue then is the ’777 patent’s date of conception.
Conception is the formation, in the mind of the inventor,
of “a definite and permanent idea of the complete and
operative invention . . . . The idea must be ‘so clearly
defined in the inventor’s mind that only ordinary skill
would be necessary to reduce the invention to practice,
without extensive research or experimentation.’” Mahur-
kar, 79 F.3d at 1577 (quoting Burroughs Wellcome Co. v.
Barr Labs., Inc., 40 F.3d 1223, 1228 (Fed. Cir. 1994)).
STAMPS.COM v. ENDICIA 18
In order to show that the subject matter of the ’777
patent had been invented before the February 13, 1998,
filing date of the Lewis ’565 patent, Stamps.com offered
two pieces of evidence to swear-behind the reference: (1) a
September 24, 2009, declaration from Martin Pagel, the
co-inventor of the ’777 patent (“First Pagel Declaration”);
and (2) a corroborating “Executive Status Report” dated
March 19, 1998, discussing activity allegedly connected
with the development of the ’777 patent (“March Status
Report”).
In rejecting this evidence as insufficient to establish
prior conception, the district court stated that “[p]laintiff
has not been able to prove by clear and convincing evi-
dence . . . that the invention claimed in the ’777 patent
was conceived before its July 15, 1998, filing date.” J.A.
26. The district court erred in placing the burden of proof
on the patentee. 2 Though the patentee has the burden of
production in antedating a reference, the burden of per-
suasion, by clear and convincing evidence, remains with
the party that challenges an issued patent’s validity.
2 Endicia cites Price v. Symsek, 988 F.2d 1187, 1190
(Fed. Cir. 1993), for the proposition that Stamps.com had
the burden of showing conception and reduction to prac-
tice. However, Price is an interference action in which the
priority dates of multiple patent applications were chal-
lenged. Id. at 1189. Patent applications, unlike patents
that have been reviewed and issued by the PTO, deserve
no presumption of validity in interference proceedings.
See 35 U.S.C. § 282. Accordingly, the burden of proof in
interference actions is the lower preponderance of evi-
dence standard, and the burden is generally assigned to
the junior party (the party that entered the interference
action with a later filing date). See 37 C.F.R. § 1.657. In
contrast, a party asserting invalidity in a district court
always bears the burden of proof by clear and convincing
evidence. Innovative Scuba Concepts, Inc. v. Feder Indus.,
Inc., 26 F.3d 1112, 1115 (Fed. Cir. 1994).
19 STAMPS.COM v. ENDICIA
Mahurkar, 79 F.3d at 1576 (“By challenging the validity
of the [patent], [the alleged infringer] bore the burden of
persuasion by clear and convincing evidence on all issues
relating to the status of the [reference] as [§ 102(a)] prior
art.”).
However, the patentee here did not meet its burden of
production in antedating the Lewis ’565 patent. The First
Pagel Declaration claims that “the conception of the
invention . . . occurred in the second half of 1997, and
certainly well before January 1, 1998.” J.A. 10388.
Nonetheless, an inventor, such as Pagel, claiming prior
conception must proffer evidence corroborating his testi-
mony. See Mahurkar, 79 F.3d at 1577. “This require-
ment arose out of a concern that inventors testifying in
patent infringement cases would be tempted to remember
facts favorable to their case by the lure of protecting their
patent or defeating another's patent.” Id.; see also Eibel
Process Co. v. Minn. & Ontario Paper Co., 261 U.S. 45, 60
(1923); Washburn & Moen Mfg. Co. v. Beat ‘Em All
Barbed-Wire Co., 143 U.S. 275, 284–85 (1892); Gasser
Chair Co. v. Infanti Chair Mfg. Corp., 60 F.3d 770, 776
(Fed. Cir. 1995). The requirement for the corroboration of
inventor testimony applies to efforts to swear behind a
prior art reference. See, e.g., Mahurkar, 79 F.3d at 1577.
Here, the primary evidence offered to corroborate the
Pagel Declaration is the March Status Report. Pagel
claims the report “indicates that in March of 1998,
[Stamps.com] was in possession of a unique hardware
device (‘[button] array’) that . . . was manufactured at our
request by Dallas Semiconductor.” J.A. 10389. Because
the manufacturing process would have taken many
months, Pagel claims that conception of the “button
array” must have “occurred prior to January 1, 1998.”
J.A. 10389.
STAMPS.COM v. ENDICIA 20
However, it is unclear how the “button array” is re-
lated to the subject matter of the ’777 patent. The March
Status Report makes only opaque and incomprehensible
references to a “button array” and “iButton.” These
references hardly show that the conception for the ’777
patent was “so clearly defined . . . that only ordinary skill
would be necessary to reduce the invention to practice.”
See Mahurkar, 79 F.3d at 1577. Indeed, Tygar’s expert
testimony demonstrates that one of skill in the art would
not have comprehended the status report:
[The March Status Report] is written in a way
that prevents a person of ordinary skill in the art
from knowing the particular subject matter to
which it relates; its cursory language renders
much of [the status report] unintelligible. I could
not identify any portion of [the status report] that
a person of ordinary skill in the art of computer
science would recognize as a clear reference to the
particular invention covered in the claims of the
’777 patent, let alone a complete disclosure of that
invention.
J.A. 10922–23. Stamps.com offered no contrary expert
evidence. There is no evidence that the March Status
Report corroborates Pagel’s declaration.
Additionally, Stamps.com argues that the district
court abused its discretion in not considering evidence in
a reply brief to cross-motions for summary judgment that
it had submitted on October 5, 2009. This evidence
included a second declaration by Pagel (“Second Pagel
Declaration”) and a corroborating declaration (“Desai
Declaration”) by Manish Desai, an engineer who was
supervised by Pagel at Stamps.com’s predecessor com-
pany. Because these declarations were raised for the first
time in a reply brief to which Endicia did not have an
21 STAMPS.COM v. ENDICIA
opportunity to respond, we hold that the district court
acted within its discretion when it did not consider these
supplementary declarations. See In re Cygnus Tele-
comms. Tech., LLC, Patent Litig., 536 F.3d 1343, 1351–53
(Fed. Cir. 2008) (applying regional circuit law in deciding
the admissibility of evidence that was not included in
motions for summary judgment); Merrick v. Paul Revere
Life Ins. Co., 500 F.3d 1007, 1013 (Fed. Cir. 2007) (hold-
ing that issues raised for the first time in a reply brief are
generally considered waived, but making an exception
where appellee was given an opportunity to respond);
Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir. 2007)
(holding that a district court “need not consider argu-
ments raised for the first time in a reply brief”). 3
Because Stamps.com failed to meet its burden to pro-
duce evidence establishing prior conception, we hold that
there is no genuine issue of material fact regarding the
conception of the ’777 Patent, and we affirm the district
court’s holding that the ’777 Patent was obvious over the
Lewis ’565 patent and the Tygar-Yee article.
VII
3 Stamps.com argues that Fair Housing Council v.
Riverside Two, 249 F.3d 1132 (9th Cir. 2001), requires the
consideration of the Second Pagel Declaration and the
Desai Declaration. However, in Fair Housing, “the dis-
trict court erred by failing to review the evidence that
[appellants] had submitted in support of their motion for
summary judgment as evidence in opposition to [appel-
lee’s] motions for summary judgment.” Id. at 1135 (em-
phasis added). The Ninth Circuit explained that “the
district court was required to review the evidence prop-
erly submitted in support of [appellants’] motion . . . .” Id.(emphasis added). Here, the Second Pagel Declaration
and the Desai Declaration were both submitted in a reply
brief and not in the opening motions for summary judg-
ment.
STAMPS.COM v. ENDICIA 22
The district court held that claims 13, 50, and 89 of
the ’214 patent were invalid as anticipated in view of the
Ogg-Chow ’406 patent, which was cited as § 102(a) prior
art. To swear behind the Ogg-Chow ’406 patent (filed
October 16, 2000), Stamps.com offered a third declaration
from Pagel (“Third Pagel Declaration”), which stated that
the “conception of the invention recited in the ’214 Patent
occurred at least by November of 1998, and certainly well
before October of 1999.” J.A. 10394. As corroboration,
Stamps.com offered a Status Report dated November 3,
1998 (“November Status Report”). The November Status
Report allegedly documented the development of a “vPSD”
or “virtual postage security device,” which purportedly
referred to the “user data files” in claim 1 of the ’214
patent which “are loaded into . . . portable memory to
thereby configure said portable memory for use in serving
a corresponding demand [for postage].” ’214 patent, col.29
ll.65–67; see also id. col.20 ll.15–60. Stamps.com claimed
that the November Status Report corroborated the fact
that Pagel was in possession of the vPSD system by at
least November 1998.
The November Status Report suffers from the same
defects as the March Status Report with respect to the
’214 patent. Like the March Status Report, the November
Status Report is completely incomprehensible and fails to
sufficiently corroborate the inventor testimony in the
Third Pagel Declaration. Stamps.com again offered the
Second Pagel Declaration and the Desai Declaration as
corroborating evidence. As discussed in the previous
section, the district court did not err in declining to con-
sider those declarations. Because we hold that
Stamps.com failed to bear its burden of production in
antedating the Ogg-Chow ’406 patent, there are no genu-
ine issues of material fact as to whether the Ogg-Chow
’406 patent was § 102(a) prior art. Accordingly, we affirm
23 STAMPS.COM v. ENDICIA
the district court’s holding that the ’214 patent is antici-
pated by the Ogg-Chow ’406 patent.
VIII
The district court held that claim 23 of the ’568 pat-
ent, as a means-plus-function claim, was indefinite for
failing to disclose a corresponding structure for “means for
determining a value of said transaction associated with
two or more of said plurality of providers utilizing ones
[sic] of said transaction parameters.” ’568 patent, col.34
ll.35–37. The pertinent part of claim 21, from which
claim 23 depends, 4 recites:
A general multi-purpose processor-based system
for authorizing a desired transaction to be con-
ducted utilizing a particular provider, wherein in-
formation with respect to said desired transaction
as conducted by each of a plurality of providers is
presented for selection of said particular provider,
said system comprising: . . .
means for determining a value of said transac-
tion associated with two or more of said plurality
of providers utilizing ones [sic] of said transaction
parameters;
means for presenting each of said determined
values for comparison . . . .
4 Claim 23 recites:
The system of claim 21, wherein said means for de-
termining desired transaction parameters comprises:
means for accepting information associated with
said transaction parameters from a general purpose
computer program operating on said general multi-
purpose processor-based system.
’568 patent, col.34 ll.49–54.
STAMPS.COM v. ENDICIA 24
Id. col.34 ll.27–39 (emphasis added). Using this system, a
user could enter certain “transaction parameters” (e.g.,
ZIP code, weight, mail class) and the system would de-
termine the costs of the transaction for each shipping
provider (e.g., USPS and FedEx) and present this infor-
mation to the user for comparison. Id.
In Blackboard, Inc. v. Desire2Learn, Inc., 574 F.3d
1371, 1382 (Fed. Cir. 2009), we held that, “if one employs
means-plus-function language in a claim, one must set
forth in the specification an adequate disclosure showing
what is meant by that language.” (citation and quotation
omitted); see 35 U.S.C. § 112, ¶ 2. “If the specification
does not contain an adequate disclosure of the structure
that corresponds to the claimed function, the patentee
will have ‘failed to particularly point out and distinctly
claim the invention as required by the second paragraph
of section 112,’ which renders the claim invalid for indefi-
niteness.” Blackboard, 574 F.3d at 1382 (quoting In re
Donaldson Co., 16 F.3d 1189, 1195 (Fed. Cir. 1994) (en
banc)).
In Aristocrat Technologies Australia Pty Ltd. v. Inter-
national Game Technology, 521 F.3d 1328, 1333 (Fed. Cir.
2008), we held that a “computer-implemented means-
plus-function term is limited to the corresponding struc-
ture disclosed in the specification and equivalents thereof,
and the corresponding structure is the algorithm.” (quot-
ing Harris Corp. v. Ericsson Inc., 417 F.3d 1241, 1253
(Fed. Cir. 2005)). In a means-plus-function claim in
which the disclosed structure is a computer, “the disclosed
structure is not the general purpose computer, but rather
the special purpose computer programmed to perform the
disclosed algorithm.” WMS Gaming, Inc. v. Int’l Game
Tech., 184 F.3d 1339, 1349 (Fed. Cir. 1999). “In software
cases, . . . algorithms in the specification need only dis-
close adequate defining structure to render the bounds of
25 STAMPS.COM v. ENDICIA
the claim understandable to one of ordinary skill in the
art.” AllVoice Computing PLC v. Nuance Commc’ns, Inc.,
504 F.3d 1236, 1245 (Fed. Cir. 2007).
Before considering whether there was adequate dis-
closure of a corresponding structure, we must construe
the claim language describing the function. In claim 21 of
the ’568 patent, the claimed function is a “means for
determining a value of said transaction associated with
two or more of said plurality of providers utilizing ones
[sic] of said transaction parameters.” ’568 patent, col.34
ll.35–37. The district court appears to have construed the
function to require a means for “determin[ing] the value
[for the shipping transaction] (i.e., a program that links to
the shipping companies’ websites or provides other means
of ascertaining the shipping companies’ data).”
Stamps.com, slip op. at 24. Stamps.com contends that the
district court misconstrued the function and that “the
determination [of value for a shipping provider] is most
naturally understood to be the performance of this calcu-
lation rather than the process of obtaining such algo-
rithms from the shipping companies.” Appellant’s Br. 46.
We agree that the contested means-plus-function claim
should be construed as requiring a means for calculating
the shipping costs, rather than a means for accessing or
obtaining algorithms for such calculations from the ship-
ping providers.
We turn to whether the specification discloses a corre-
sponding structure for a means for calculating the ship-
ping costs. Stamps.com identified the E-STAMP program
as the corresponding structure for these calculations: “The
E-STAMP program will automatically incorporate the . . .
entered [transaction] parameters—weight, class, zone—in
order to correctly calculate the correct postage or credit
transaction authorization to print in conjunction with the
postage indicia.” J.A. 10427. Stamps.com appears to
STAMPS.COM v. ENDICIA 26
contend that, given certain transaction parameters (e.g.,
weight, class, zone), one of skill in the art would know
how to calculate the shipping costs.
Though the E-STAMP program may constitute the
structure for the contested means, it is not sufficiently
described for one of skill in the art to implement it. It is
not enough that a person of skill in the art can identify a
structure to determine the transaction value. As we
stated in Blackboard:
[Such an argument] conflates the definiteness re-
quirement of section 112, paragraphs 2 and 6, and
the enablement requirement of section 112, para-
graph 1. The fact that an ordinarily skilled arti-
san might be able to design a program to create
an access control list, based on the system users’
predetermined roles goes to enablement. The
question before us is whether the specification
contains a sufficiently precise description of the
‘corresponding structure’ to satisfy section 112,
paragraph 6, not whether a person of skill in the
art could devise some means to carry out the re-
cited function.
574 F.3d at 1385. We must determine whether a skilled
artisan would have understood the specification to en-
compass the necessary program and could have imple-
mented the program—not simply whether he could have
written the program. See Med. Instrumentation & Diag-
nostics Corp. v. Elekta AB, 344 F.3d 1205, 1212 (Fed. Cir.
2003). “It is not proper to look to the knowledge of one of
skill in the art apart from and unconnected to the disclo-
sure of the patent.” Id. Here, the calculation of shipping
value appears to involve a complex interaction of zone
variables, weight variables, and class variables. There is
no disclosure of the actual algorithms necessary to calcu-
27 STAMPS.COM v. ENDICIA
late the transaction value, nor is there any disclosure that
these algorithms involve only simple arithmetic. The
failure to provide such an algorithm in the specification
renders claim 23 of the ’568 patent invalid as indefinite.
IX
The district court determined that claim 17 of the ’451
patent and claims 32 and 39 of ’808 patent were obvious
over three prior art references: Word 95, DAZzle, and
AddressMate. The ’451 patent claims a method of config-
uring a printer to print postage indicia near the margins
of an envelope. Because standard printers typically differ
in the way envelopes are fed into the printer, it is neces-
sary for software programs to query databases for infor-
mation about specific printers. Claim 17 of the ’451
patent recites:
The system of claim 16 wherein the means for
querying one or more databases to determine the
set up data for the user’s printer comprises means
for querying one or more databases to determine a
printer offset as a function of how the print media
is fed into a printer.
’451 patent, col.24 ll.32–36 (emphasis added). Thus, claim
17 requires that the system query databases to determine
how to set up a printer to use a specified “printer offset”
from the edges of an envelope. The ’808 patent describes
a method and system for printing information on print
media, such as envelopes. Claims 32 and 39 are directed
to determining a “printer offset as a function of how . . .
one or more patterns print on a test envelope” and “de-
termining the offset for the selected printer from a printer
database having information on one or more printer
drivers.” ’808 patent, col.25 ll.21–25 & col.25 ll.57–62
(emphases added). Both the ’451 and ’808 patents define
a printer offset as “a variable dependent upon how an
STAMPS.COM v. ENDICIA 28
envelope is fed into a printer. . . . [T]he client software
uses the printer offset to locate the envelope image within
the printable region . . . .” ’451 patent, col.13 ll.1–10; ’808
patent, col.13 ll.20–23.
Each party offered its own expert testimony as to
whether the prior art disclosed a printer offset. Endicia
relied mainly on the expert declaration of Stuart Soffer,
who took screenshots of these programs to show how a
“printer offset” was queried in the Windows Registry (a
database that, among other things, maintains information
about printer drivers). The district court, relying on
Soffer’s declaration, determined that
Word 95 provides the user with the option of se-
lecting a feed tray position and, once the feed tray
position is selected, the information is stored in
Windows Registry, which can be queried later to
determine printer offset. Similarly, [DAZzle] al-
lows a user to select how an envelope is fed into a
printer and saves that feed option in the Windows
Registry or in a layout file, which can be queried
later to determine a printer offset. AddressMate
also allows a user to select how an envelope is fed
into a printer and to save that option in template
layout files.
Stamps.com, slip op. at 29–30 (internal citations omitted).
We think that Word 95, by itself, is sufficient to ren-
der claim 17 of the ’451 patent and claims 32 and 39 of
the ’808 patent obvious. Word 95 has been publicly
available since as early as 1995, well before the August
30, 1999, filing date of the provisional application for the
’451 and ’808 patents. Word 95 also discloses the printing
of envelopes and labels under the “Envelopes and Labels”
function of the “Tools” menu. J.A. 7468. In order to
obtain printer feed information for a specific printer,
29 STAMPS.COM v. ENDICIA
Word 95 can query the Windows Registry. For example,
Soffer appears to have identified the “EnvFeed value” in
the Windows Registry as a value representing the printer
offset: “As the printer feed option changes, the Registry
Key ‘EnvFeed’ changes for each of the envelope feed
options.“ J.A. 7471. Word 95 then works with the user’s
printer to print information displayed onto the envelope
or label in accordance with the printer configuration data.
Soffer’s declaration would support a finding that Word 95
discloses every element of the disputed claims.
On appeal, Stamps.com argues that Soffer’s declara-
tion fails to support a finding that the prior art disclosed a
“printer offset” because Soffer did not establish the behav-
ior of the prior art software as it existed before the prior-
ity date of the ’451 and ’808 patents. In particular,
Stamps.com contends that Soffer ran the prior art soft-
ware on a non-prior art operating system with non-prior
art printer drivers. 5 This is argued to be problematic
because the non-prior art printer drivers could themselves
have supplied the purported printer offsets, rather than
the Windows Registry in Word 95. However, as
Stamps.com concedes, this argument was not made below
and cannot properly be considered on appeal. See Sage
Prods., Inc., 126 F.3d at 1426. We therefore decline to
address this unsupported allegation.
Moreover, Stamps.com offered a declaration from
McDaniel, to challenge Soffer’s declaration. With regard
to the ’451 patent, McDaniel stated:
85. For Word 95, [Endicia’s] expert cites the
Windows Registry parameters “printMaxXExtent,
5 Stamps.com notes that the tests that Soffer relied
on were run on an HP Photosmart 2570 printer, which
was purportedly developed after the priority date of the
’451 patent.
STAMPS.COM v. ENDICIA 30
printMaxYExtent, print MibXExtent [sic] and
printMinYExtent” as examples of “printer offset.”
. . . None of these parameters is a “printer offset” as
defined in the ’451 Patent.
86. For DAZzle, [Endicia’s] expert cites the
Windows Registry once again, but fails to point to
any data that represents a “printer offset” as de-
fined in the ’451 Patent.
87. For AddressMate, [Endicia’s] expert cites
the “vertical and horizontal offsets” stored in a
template layout (TPL) file. . . . However, these ver-
tical and horizontal offsets are not a “printer off-
set” as defined in the ’451 Patent.
J.A. 10416–17 (emphases added). These conclusory
opinions fail to raise a genuine issue of fact. See Innoge-
netics N.V. v. Abbott Labs., 512 F.3d 1363, 1373–74 (Fed.
Cir. 2008) (finding an expert report insufficient to raise a
genuine issue of fact where the expert “merely lists a
number of prior art references and then concludes with
the stock phrase ‘to one skilled in the art it would have
been obvious to perform [the claimed methods]’”). McDan-
iel failed to explain the basis for his conclusions that the
printer offsets, as defined in the ’451 patent, were not
disclosed in the prior art. Nor did McDaniel address the
printer offset issue with regard to claims 32 and 39 of the
’808 patent.
Stamps.com has thus failed to offer sufficient evidence
of non-obviousness to raise a genuine issue of material
fact. The district court was correct to hold that claim 17
of the ’451 patent and claims 32 and 39 of the ’808 patent
were obvious over Word 95, DAZzle, and AddressMate. 6
6 In addition, Stamps.com argues there was a genu-
ine issue of material fact as to whether Word 95, DAZzle,
and AddressMate disclosed “mapping an image onto a
31 STAMPS.COM v. ENDICIA
IX
The district court found that claim 7 of the ’597 pat-
ent, claim 35 of the ’980 patent, and claim 32 of the ’808
patent were obvious over the DAZzle software program
and a combination of other prior art. 7 These claims all
virtualized sheet” as required by claims 32 and 39 of the
’808 patent. A “virtualized sheet,” is a preview “of the
information [to be printed] contained within a printable
region.” ’808 patent, col.3 ll.1–2. Endicia’s expert pre-
sented claim charts showing how Word 95, DAZzle, and
AddressMate disclosed the ability to preview an image of
an envelope or letter before printing it. In response,
Stamps.com offered McDaniel’s declaration, which simply
stated that “None of these programs is capable of ‘map-
ping an image onto a virtualized sheet’ as described in the
’808 patent.” J.A. 10418. We conclude that McDaniel’s
conclusory opinion fails to raise a genuine issue of mate-
rial fact. See Innogenetics N.V. v. Abbott Labs., 512 F.3d
1363, 1373–74 (Fed. Cir. 2008).
7 Asserted claim 7 of the ’597 patent provides: “The
system set forth in claim 6 further including: means for
transferring said printed postage and indicia from said
transfer medium to a mailing envelope.” ’597 patent,
col.18 ll.7–9 (emphases added).
Asserted claim 35 of the ’980 patent provides: “The
system of claim 34, wherein at least one of said generat-
ing means includes: means for selecting one of a plurality
of graphical configurations of a postage indicia; and
means for personalizing said selected graphical configura-
tion.” ’980 patent, col.25 ll.39–44 (emphasis added).
Asserted claim 32 of the ’808 patent provides:
The system of claim 30 wherein the means for deter-
mining said printer offset comprises means for send-
ing a print job having one or more patterns to said
printer and means for determining said printer offset
as a function of how said one or more patterns print
on a test envelope.
STAMPS.COM v. ENDICIA 32
contain the term “postage indicia” or “postal indicia.” The
district court construed “postage indicia” as: “A printed
postage designation on a mail piece or label that includes
the amount of postage, and may include an arbitrary or
fanciful graphic configuration and/or a machine readable
encrypted message.” J.A. 42 (emphasis added). The
district court construed “postal indicia” as “postal mark-
ings including but not limited to the amount of postage,
and FIM barcodes and/or two-dimensional barcodes,
printed or imprinted on a mail piece or label.” J.A. 46
(emphasis added).
On appeal, Stamps.com argues that both “postage in-
dicia” and “postal indicia” must include actual postage
and not just a representation of postage value.
Stamps.com argues that DAZzle does not require the
printing of actual postage and therefore does not render
the claims obvious. Stamps.com is partly correct. DAZzle
does not calculate or print actual postage. It merely
allows the printing of a “postage box indicating the
amount of postage due in the upper right corner of your
mail piece” (i.e., a placeholder that says “$0.32 Place
First-Class Postage Here”). J.A. 7424, 7434.
’808 patent, col.25 ll.21–25. And claim 30 of the ’808
patent, from which claim 32 depends, recites:
A system for printing postal indicia comprising:
means for determining a printer offset as a function
of how an envelope is fed into said printer; means for
mapping an image onto a virtualized sheet; means for
generating a print job for the virtualized sheet,
wherein the image is located within a printable re-
gion of the virtualized sheet as a function of said
printer offset; and a printer for printing said postal
indicia onto said envelope.
Id. col.25 ll.9–18 (emphases added).
33 STAMPS.COM v. ENDICIA
The term “postage indicia” in claim 7 of the ’597 pat-
ent and claim 35 of the ’980 patent does not appear to
require the printing of actual postage. 8 However, based
on the specification of the ’808 patent, Stamps.com argues
that the term “postal indicia” in the ’808 patent does
require the printing of actual postage. See, e.g., ’808
patent, col.6 ll.31–34 (“The printed indicium appears as a
two-dimensional bar code that includes a unique serial
number, mail delivery point information, and the amount
of postage.”) (emphases added). But even assuming that
both “postage indicia” and “postal indicia” require the
delivery of actual postage, it would have been obvious to
one of skill in the art to combine the DAZzle reference
8 The use of “postage indicia” in the ’597 patent
clearly differentiates between “postage” and “postage
indicia.” Where “postage” requires actual postage value,
“postage indicia” is merely a graphical designation that
does not require actual postage value. Claim 6 of the ’597
patent, from which asserted claim 7 depends, treats
“postage” and “[postage] indicia” as separate claim ele-
ments, reciting a “system . . . wherein said printing means
prints said created postage and postage indicia.” ’597
patent, col.18 ll.4–6 (emphases added). Asserted claim 7
adds: “The system set forth in claim 6 . . . including[ ]
means for transferring said printed postage and indicia
from said transfer medium to a mailing envelope.” ’597
patent, col.18 ll.7–9 (emphases added). The summary of
the ’597 patent similarly distinguishes between “postage”
and “postage indicia,” disclosing a “program that can
generate customized greeting cards to allow the customer
to automatically calculate the correct amount of postage
for the customized card, and to print that postage. This
system can also generate an addressed envelope with a
personalized postage indicia printed thereon.” ’597 pat-
ent, col.2 ll.35–39 (emphases added). Finally, the “stamp
indicia 1508” depicted in FIGS. 15A and 15B of the ’597
patent and the ’980 patent do not show actual postage.
’597 patent, Figs. 15A, 15B; ’980 patent, Figs. 15A, 15B.
STAMPS.COM v. ENDICIA 34
with the Whitehouse ’562 patent, which discloses the
printing of actual postage value. See ’562 patent, col.11
ll.61–65 (disclosing a computer system with a non-volatile
memory for controlling a printer to print the actual post-
age amount on mail pieces: “The sample postage mark . . .
express[es] the fundamental information required by the
[USPS]—city/state of origin, date of issue, amount of
postage, and meter number.”).
Stamps.com, however, argues that DAZzle and the
Whitehouse ’562 patent cannot be combined because the
Whitehouse ’562 patent teaches away from certain fea-
tures of DAZzle. Specifically, Whitehouse appears to
teach a postage mark with a “graphical emblem similar in
ways to the artistic and thematic content expressed in the
regular stream of USPS stamp ‘new issues.’” ’562 patent,
col.12 ll.31–33. This graphical emblem is stored in en-
crypted “hidden files” and used as an “industry standard”
in order to “frustrate and control counterfeiting and/or
unauthorized production of the postage mark.” Id. col.12
l.39 & ll.49–50. Stamps.com contends that allowing users
to choose their own “graphical emblems,” as taught by the
DAZzle software, would defeat the anti-counterfeiting
objectives of the Whitehouse ’562 patent. Thus,
Stamps.com argues that the Whitehouse ’562 patent
would teach away from giving users a choice of graphical
configurations. This argument is unavailing. A reference
does not teach away when it merely expresses a general
preference for an alternative invention. In re Fulton, 391
F.3d 1195, 1201 (Fed. Cir. 2004). Here, the use of the
graphical emblem as an auto-counterfeiting measure was
described as an “alternative embodiment” that was en-
tirely optional and not required by the Whitehouse ’562
patent. ’562 patent, col.12 l.28 & ll.46–48. Moreover, the
’562 patent explicitly teaches another embodiment using
the patent in conjunction with the “Envelope Manager”
35 STAMPS.COM v. ENDICIA
program, an early version of the DAZzle program. Id.col.1 ll.19–26, col.4 ll.4–8, 15–23, & 56–57.
Stamps.com also contends that the term “postage in-
dicia” should have been construed to require “arbitrary or
fanciful graphical configurations.” Appellant’s Br. 15–16.
We agree that the district court erred in construing these
graphical configurations as optional. However, the dis-
trict court correctly found that the DAZzle reference
clearly disclosed such graphics. See, e.g., Stamps.com,
slip op. at 14 (explaining that DaZzle could depict a
“Graphic Image” of “Happy Birthday Mom” with a birth-
day hat and confetti). Therefore, Stamps.com was not
prejudiced by a construction that made the graphics
optional.
We therefore affirm the invalidity of claim 7 of the
’597 patent, claim 35 of the ’980 patent, and claim 32 of
the ’808 patent as obvious over a combination of DAZzle
and the Whitehouse ’562 patent.
AFFIRMED
NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
__________________________
STAMPS.COM INC.,
Plaintiff-Appellant,
v.
ENDICIA, INC. AND PSI SYSTEMS, INC.,
Defendants-Appellees.
__________________________
2010-1328
__________________________
Appeal from the United States District Court for the
Central District of California in Case No. 06-CV-7499,
Judge Otis D. Wright, II.
__________________________
BRYSON, Circuit Judge, concurring-in-part and dissenting-
in-part.
I concur in the court’s disposition of the nine asserted
claims of the ’214, ’451, ’568, ’597, ’808, and ’980 patents.
I also agree that the district court did not abuse its discre-
tion in allowing Stamps.com to assert additional claims
only upon a showing of need. In my view, however, the
district court should not have entered summary judgment
invalidating the six asserted claims of the ’777 and ’991
patents. I therefore dissent with respect to the affir-
mance of that portion of the district court’s judgment.
STAMPS.COM v. ENDICIA 2
The majority upholds the district court’s conclusion
that the Tygar-Yee article is prior art to the ’777 and ’991
patents. I do not agree that the evidence proffered by
Endicia was sufficient to establish that the Tygar-Yee
article was publicly accessible before the priority dates of
those patents.
The Tygar-Yee article is dated March 1, 1993, but
there is no evidence as to the date of its publication. The
majority notes that the article was cited in a subsequent
article by Tygar and Yee published in 1994. That citation,
however, does not constitute evidence that the 1993
Tygar-Yee article was ever publicly accessible, particu-
larly in light of the fact that the later article was written
by the same authors. The majority also relies on a decla-
ration by Dr. Tygar, the co-author of the Tygar-Yee arti-
cle, stating that the article is prior art. Dr. Tygar’s
declaration, however, consists of a conclusory legal asser-
tion and provides nothing by way of evidence in support of
that assertion.
In the summary judgment proceedings, Endicia of-
fered as an exhibit a printout of a webpage that an Endi-
cia attorney identified as “a printout of Carnegie Mellon
University’s School of Computer Science archive report
for the year 1993.” The exhibit is entitled “Index
of/anon/1993” and consists of a list of file names, file sizes,
and the dates on which the files were last modified.
Endicia claims that one of the files, “CMU-CS-93-
107.ps.Z,” represents the Tygar-Yee article. That file
name lists a modification date of May 8, 1993. The major-
ity characterizes the website as a “public forum,” but the
record contains no evidence that the webpage in the
exhibit was accessible to the public or widely dissemi-
nated in 1993. See In re Lister, 583 F.3d 1307, 1211 (Fed.
Cir. 2009) (“A reference is considered publicly accessible if
3 STAMPS.COM v. ENDICIA
it was disseminated or otherwise made available to the
extent that persons interested and ordinarily skilled in
the subject matter or art[,] exercising reasonable dili-
gence, can locate it.”); Cordis Corp. v. Boston Scientific
Corp., 561 F.3d 1319, 1332-35 (Fed. Cir. 2009) (holding
that an academic paper distributed among a limited set of
professional colleagues is not a prior art publication).
The majority highlights the fact that Stamps.com
identified the Tygar-Yee article as bearing a 1993 date in
several information disclosure statements that it filed in
2000 in connection with other patents. It is well settled,
however, that a patentee’s inclusion of a reference in an
information disclosure statement does not constitute an
admission that the reference is prior art. 37 C.F.R. §
19.7(h); ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860,
866 (Fed. Cir. 2010); Abbott Labs. v. Baxter Pharm.
Prods., Inc., 334 F.3d 1274, 1279 (Fed. Cir. 2003).
Finally, the majority states that Stamps.com submit-
ted no evidence that the Tygar-Yee article was not pub-
lished in 1993. Apart from the ordinary difficulty of
proving a negative, it is well settled that, at the summary
judgment stage, “the moving party must make a prima
facie showing that it is entitled to summary judgment.”
Celotex Corp. v. Catrett, 477 U.S. 317, 331 (1986). When
the movant has the ultimate burden of proof on an issue,
it must show that it is entitled to judgment, and if it does
not do so, the non-moving party need not come forward
with opposing evidence. Saab Cars USA, Inc. v. United
States, 434 F.3d 1359, 1368 (Fed. Cir. 2006); 11 James
Wm. Moore, Moore’s Federal Practice ¶ 56.40[1][c] (2011
ed.) (“[T]he movant [with the burden of proof on the
merits] must produce evidence that would conclusively
support its right to a judgment after trial should the
nonmovant fail to rebut the evidence. . . . [T]he evidence
STAMPS.COM v. ENDICIA 4
in the movant’s favor must be so powerful that no reason-
able jury would be free to disbelieve it.”) In the context of
a motion for summary judgment of invalidity, the burden
is not on the patentee to present evidence that a reference
is not prior art; instead, the party challenging the patent
has the burden to make a prima facie showing that the
reference was publicly accessible. Because Endicia failed
to show that the Tygar-Yee article is prior art, I would
hold that the district court erred in invalidating the six
asserted claims of the ’777 and ’991 patents as obvious.