Net MoneyIN, Inc. v. VeriSign, Inc.

Opinion

 [***1753]  [*1362]   LINN, Circuit Judge.

Net MoneyIN, Inc. ("NMI") appeals from a final judgment of the United States District Court for the District of Arizona, which held the asserted claims of U.S. Patents No. 5,822,737 ("the '737 patent") and No. 5,963,917 ("the '917 patent") invalid. NMI also appeals from the district court's denial of its motion for leave to amend its complaint to assert a claim for inducement of infringement. Because the district court correctly  [**2] found claims 1, 13, and 14 of the '737 patent and claim 1 of the '917 patent, which contain limitations in means-plus-function format, invalid under 35 U.S.C. § 112 P 2 as lacking corresponding structure, we affirm that portion of the judgment. Because the district court did not abuse its discretion in denying NMI's motion to amend, we also affirm that ruling. Because the district court applied an incorrect standard of law in finding claim 23 of the '737 patent invalid as anticipated under 35 U.S.C. § 102(a), however, we reverse the grant of summary judgment of anticipation. Thus, we affirm-in-part, reverse-in-part, and remand for proceedings consistent with this opinion.

I. BACKGROUND

This case involves systems for processing credit card transactions over the Internet and for addressing security concerns not present in direct retail transactions. In the early days of Internet commerce, merchants recognized that one key to the  [*1363]  success of Internet sales would be the ability to provide customers with assurances of security in the processing of financial transactions over the Internet using credit cards, bank accounts, and other means of electronic payment. Responding to that need, the  [**3] industry investigated encryption techniques and architectures to protect sensitive data. One such effort is reflected in a 1995 working document entitled "Internet Keyed Payments Protocol ("the iKP reference"), published by the Internet Engineering Task Force and IBM. That document sets forth standards on "how payments may be accomplished efficiently, reliably[,] and securely." J.A. at 1375. The iKP reference explains that its goal was "to enable Internet-based secure electronic payments while utilizing the existing financial infrastructure for payment authorization and clearance. The intent is to avoid completely, or at least minimize, changes to the existing financial infrastructure outside the Internet." Id. To that end, the iKP reference suggests two standard models, or protocols. ¹ 

In the first protocol, (1) the customer selects  [**4] one or more items to purchase from the merchant's website; (2) the customer sends credit card information to the merchant; (3) the merchant sends the credit card information and amount of the purchase to the merchant's bank; (4) the merchant's bank seeks authorization for the purchase from the issuing bank over the existing banking network; and (5) the merchant's bank notifies the merchant (but not the customer) of transaction approval. See id. at 1381 (flow diagram); Appellant's Br. at 7.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.