Default Proof Credit Card System, Inc. v. Home Depot U.S.A., Inc.

389 F. Supp. 2d 1325, 2004 U.S. Dist. LEXIS 28082, 2004 WL 3524749
CourtDistrict Court, S.D. Florida
DecidedSeptember 30, 2004
Docket1:03-cv-20094
StatusPublished

This text of 389 F. Supp. 2d 1325 (Default Proof Credit Card System, Inc. v. Home Depot U.S.A., Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Default Proof Credit Card System, Inc. v. Home Depot U.S.A., Inc., 389 F. Supp. 2d 1325, 2004 U.S. Dist. LEXIS 28082, 2004 WL 3524749 (S.D. Fla. 2004).

Opinion

ORDER ON PENDING MOTIONS

ALTONAGA, District Judge.

THIS CAUSE came before the Court upon Defendants, Starbucks 1 and Wal-Mart’s 2 Motion for Summary Judgment of Noninfringement (D.E.85), filed under seal; Defendant, Home Depot U.S.A., Inc.’s (“Home Depot”) Motion for an Order Construing Claim 1 of U.S. Patent No. 6,405,182 (D.E.89); Home Depot’s Motion for Summary Judgment that the Claims of U.S. Patent No. 6,405,182 are Invalid (D.E. 90); and Home Depot’s Motion for Summary Judgment that its Gift-Card Program does not Infringe any Claim of U.S. Patent No. 6,405,182 (D.E.94), filed under seal. The Court has carefully considered the written submissions of the parties, pertinent portions of the record, argument of counsel, and applicable law.

1. THE PLEADINGS

Plaintiff, Default Proof Credit Card System, Inc. (“Default Proof’) brought this action against Defendants, Starbucks, Wal-Mart and Home Depot (collectively “Defendants”) based on the alleged infringement of U.S. Patent No. 6,405,182 (the “ T82 Patent”). Vincent Cuervo (“Cuervo” or “Mr. Cuervo”), the inventor of the T82 Patent, was born in Cuba and practiced law there until 1960 when he emigrated to the United States. Cuervo took a job as a door-to-door life insurance salesman in Miami. Cuervo was able succeed in the life insurance business due, in *1329 part, to Ms development of a system for providing lines of credit to the owners of life insurance policies based upon the cash surrender values of such policies. Cuervo was awarded United States Patent Nos. 4,718,009 and 5,025,138 on this novel system.

In 1986, Cuervo founded Default Proof to develop and promote his patented system. Default Proof alleges that Cuervo next developed a system for dispensing prepaid debit cards through automated teller machines and point of sale terminals. In August 2000, Cuervo was granted U.S. Patent No. 6,105,009 (the “’009 Patent”) for a system of dispensing prepaid debit cards through automated teller machines. In June 2002, he was granted the ’182 Patent for a “System for Dispensing Prepaid Debit Cards Through Point-Of-Sale Terminals.” It is the 182 Patent that is the subject of this lawsuit. Default Proof alleges that Defendants have knowingly infringed at least Claim 1 of the 182 Patent through their manufacture, use, importation, sale and offer for sale of their respective store credit cards, electronic gift cards or other prepaid cards.

The First Amended Complaint, which is the operative pleading, was filed on April 24, 2003. It is a one-count Complaint for patent infringement arising under the patent laws of the United States, Title 35 of the United States Code. Default Proof seeks, inter alia, an injunction prohibiting further infringement and, specifically, en-joimng further importation, manufacture, use, offer for sale and/or sale of gift cards within the scope of the T82 Patent, and enjoining Defendants from contributing to and/or inducing infringement of the Y82 Patent.

Defendants answered the First Amended Complaint by asserting several affirmative defenses, including the defenses that Default Proof failed to state a claim upon which relief may be granted, that the claims of the T82 Patent are invalid for failure to comply with 35 U.S.C. §§ 102, 102, 103 and 112, and that Defendants have not infringed the claims of the ’182 Patent either literally or under the doctrine of equivalents. All of the Defendants have also filed counterclaims against Default Proof, in which they request: (1) a declaratory judgment of non-infringement and non-liability pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201; and (2) a declaratory judgment of invalidity pursuant to 28 U.S.C. § 2201. Defendants maintain that one or more claims of the 182 Patent are invalid under one or more of the following statutory provisions: 35 U.S.C. §§ 101, 102, 103 and 112. Home Depot has also sought a judgment declaring that the 182 Patent is unenforceable and/or invalid due to Default Proofs misuse thereof.

II. FACTUAL BACKGROUND 3

A. The ’182 Patent Specification

The 182 Patent is a continuation-in- *1330 part 4 of the application that matured into the ’009 Patent on August 15, 2000. The ’009 Patent is incorporated by reference in the ’182 Patent. The ’182 Patent issued on June 11, 2002 to Vincent Cuervo. The title of the ’182 Patent is “System for Dispensing Prepaid Debit Cards Through Point^of-Sale Terminals.” The application number associated with the T82 Patent is 09/524,496 (the “ ’496 Application”).

The “Abstract” of the invention describes:

Point-of-Sale machines that allow individuals to obtain from participating merchants, “over-the-counter”, [sic] prepaid debit cards. The amount of the line of credit is determined from the amount prepaid and credited to the debit card issuer, as payment for a simple purchasing transaction of merchandise or services. In this case the transaction is the purchasing of a prepaid PIN (personal identification number) required debit card.
The prepaid debit cards will be instantly available and dispensed in different dollar amounts, after payment of the prepaid amount (line of credit) selected, and the purchaser has input required particular information and those of the transaction which are merged with one of the unique identification numbers and transmitted to a remote computer facility that acts as clearing house for the users’ transactions. The remote facility, the debit card issuer, includes input and output means to communicate with the point-of-sale terminal (debit card dispenser location) and the associated circuitry to obtain the identification numbers of the debit cards being dispensed and the particulars of the users and the transactions. Adequate software is provided in the remote facility to permit users to access the same line of credit opened for one or more debit cards so that different users can remotely access and affect one or more lines of credit,

(emphasis added).

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