Evan Schuman's StorefrontBacktalk

“A terminal ID does not have that purpose, as CAT appears to acknowledge. No reasonable jury could conclude otherwise.”

Jordan also ruled that “the written description does not contain any explanation, description or disclosure whatsoever of a method for processing debit purchase transactions that includes the step of entering a general-authorization code. Nor does it contain such disclosure of any method that includes all the steps” specified. “Those steps are not unimportant to the novelty and non-obviousness of the claimed methods.”

The ruling also challenged CAT’s reasons why a clerk code should not invalidate the patent. “CAT makes two unpersuasive arguments why the checker ID could not be the clerk-authorization code. First, it asserts that the checker ID is not required for every transaction, i.e., the clerk does not have to reenter the code for each transaction. That argument, however, ignores the fact that entering the checker ID is a necessary step to proceed with, at a minimum, the first transaction a checker completes.”

Added the judge: “CAT’s argument that the checker ID could only be the general-authorization code ignores the plain function of the checker ID, which is to permit a debit transaction to occur.”

The ruling also touched on some of the security issues raised. “Viewed in the light most favorable to CAT, however, the report and opinions of [one expert] do not persuade me that there is no issue of material fact as to whether one of ordinary skill would feel motivated to ‘increase security’ by encrypting approval data sent from a host processor to a computer, not a step disclosed” in the original patent application. Therefore, the judge opted to not strike that particular part of the legal challenge against CAT.

The judge ended up supporting partial summary judgment claims against CAT, prompting CAT to issue a statement Tuesday (July 5) saying “The Court’s ruling is adverse to CAT and the validity of the ‘859 Patent. This ruling, while appealable, is also expected to have an impact on the reexamination proceedings pending in the U.S. Patent and Trademark Office. CAT is currently considering its options in moving forward.”