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Civ. Act. No. 00-1109, 239 F.3d 1343 (Fed. Cir., February 14, 2001)

The Federal Circuit Court of Appeals vacated the decision of the district court below, which had enjoined defendant ("BN") from continuing to use the "Express Lane" check-out feature of its web site on the ground that this feature was likely to infringe plaintiff Amazon's patent for "single action" ordering. While the Federal Circuit found that there was a substantial likelihood that Amazon would succeed on its claim that BN's "Express Lane" feature infringed Amazon's "single action" patent, it further found that BN had raised "substantial questions" as to the validity of this patent, given the prior art available at the time of plaintiff's invention. As a result, the Federal Circuit vacated the injunction issued below, and remanded the case to the district court for further proceedings.

Amazon's patent (the "411 patent") patents a system by which a consumer can complete the purchase of an item over the Internet and other client/server computer environments, by a single action, such as the click of a mouse. This is made possible by accessing information about the consumer necessary to complete such a purchase, such as shipping and billing information, from a database created as a result of the consumer's previous visits to the web site.

BN had installed on its web site a feature it called "Express Lane," which permitted a person, via a single action, to order a product. A consumer could effectuate such a purchase because information pertinent to the transaction, such as billing and shipping information, had been collected and stored during previous visits the consumer made to BN's web site. Indeed, the text below such feature invited users to "Buy it now with just one click."

Claiming that this system infringed its '411 patent, Amazon commenced suit, and sought a preliminary injunction enjoining BN from continuing to utilize this feature on its web site.

To obtain such an injunction, Amazon must show both that BN is likely to have infringed Amazon's patent, and that the '411 patent is likely to withstand BN's challenge to its validity.

The starting place for such an inquiry is a determination of the scope of the patent in question. "It is elementary in patent law that, in determining whether a patent is valid and, if valid, infringed, the first step is to determine the meaning and scope of each claim in suit."

As interpreted by the Federal Circuit, Amazon's patent applies to situations in which a consumer is presented with both a description of the product he wishes to purchase, and a presentation of the single action the user must take to complete the purchase of the item. Once this information has been presented, the user must only take a single action to complete the purchase. Importantly, however, the Federal Circuit did not read Amazon's patent as requiring that such a single action be presented each and every time a product description is shown a consumer. Rather, as stated by the court:

[N]either the written description, nor the plain meaning of the claims require that single action ordering be possible after each and every display of information [concerning the product to be purchased] (or even immediately after the first display of information). The plain language of the claims and the written description require only that single action ordering be possible after some display of information [concerning the product]. Indeed, the written description allows for and suggests the possibility that previous displays of information will have occurred before the display immediately preceding an order.

As a result of this determination, the court found that there was a substantial likelihood that Amazon would be able to show that BN's Express Lane check-out feature infringed the '411 patent. As stated above, the Express Lane check-out feature lets a consumer complete a purchase by a single click.

BN argued that such was not in fact the case. Instead, BN claimed that a consumer first had to locate a product he wished to purchase, which was done by clicking on various portions of BN's web site. It was only after reviewing product descriptions and selecting a particular product for purchase that the consumer was given the option of purchasing the product using the Express Lane feature. BN argued that as a result, its system required more that one click or action by the consumer, and hence did not infringe.

The Federal Circuit rejected this argument, holding instead that the appropriate point for "counting clicks" commences only when the consumer is presented with both a description of the product to be purchased and information indicating the single action needed to purchase it. Because only one click was required under BN's system after this information was presented, its system was likely to infringe the '411 Patent.

The court went on to hold, however, that BN had raised substantial questions as to the validity of Amazon's patent, in light of the prior art available, sufficient to warrant denial of Amazon's application for a preliminary injunction.

As explained by the court:

Validity challenges during preliminary injunction proceedings can be successful, that is, they may raise substantial questions of invalidity, on evidence that would not suffice to support a judgment of invalidity at trial. ... The test for invalidity at trial is by evidence clear and convincing. ... In resisting a preliminary injunction, however, one need not make out a case of actual invalidity. Vulnerability is the issue at the preliminary injunction stage, while validity is the issue at trial. The showing of a substantial question as to invalidity thus requires less proof than the clear and convincing showing necessary to establish invalidity itself.

The court held that BN had presented sufficient evidence of prior art to raise substantial questions as the validity of the 411 patent. Such prior art "clearly teaches key limitations of the claims of the patent in suit" which, at trial, could be found sufficient to render obvious the patented invention to one of ordinary skill in the art.

These prior art references included:

1. The CompuServe Trend System, by which a user of CompuServe could purchase a stock chart by only the single action of clicking on a button labeled "Chart ($.50)" immediately after a description of the item to be purchased had been displayed;

2. Dr. Lockwood's Web_Basket on-line ordering system, which, while utilizing a shopping cart model requiring several clicks to complete a purchase, used "cookie" technology to store and retrieve information about the consumer in a database;

3. A passage in a book written by Magdalena Yesil entitled "Creating the Virtual Store" that provided "Instant Buy Option. Merchants also can provide shoppers with an Instant Buy button for some or all items, enabling them to skip check out review."; and

4. A passage from a print-out of a web page describing "Oliver's Market" ordering system which states "a single click on its picture is all it takes to order an item."

The court held that substantial questions had been raised as to whether these and other prior art references may be found to have anticipated or rendered obvious Amazon's "one action" patent. As a result, the court rejected plaintiff's application for injunctive relief.

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