Thursday, August 11, 2011

CAFC PRIVACASH case addresses "bearer instrument"

Within the nonprecedential decision in PRIVACASH v. AMERICAN EXPRESS COMPANY :

The patent’s use of the term “bearer instrument” is consistent with the usual meaning given to “bearer bonds” or “bearer securities” by financial dictionaries. Proof of ownership for a “bearer security” is “possession of the security certificate.” Oxford University Press, A Diction- ary of Finance and Banking 42 (Jonathan Law ed., 4th ed. 2008). That feature “enables such bonds to be transferred from one person to another without registration” and allows owners to “preserve their anonymity.” Id. In the case of “bearer bonds” or “coupon bonds,” possession denotes ownership, “so whoever presents the coupon is entitled to the interest.” John Downes & Jordan Elliot Goodman, Dictionary of Finance and Investment Terms 58, 149 (7th ed. 2006).

And the punchline:

Based on the intrinsic and extrinsic evidence, we conclude that “bearer cards” are those that cannot be canceled or deactivated. If the lawful owner of a bearer card can contact the issuing institution and deactivate the
card, then the card would cease to be a bearer card be- cause it could not “be used up to the limit available on the card by anyone in possession of the card.” ’181 patent, col. 3, ll. 61-62. While legal title to a “bearer instrument” may not always transfer with possession, the possessor of a “bearer instrument” effectively owns the instrument due to the lack of ownership registration. That characteristic is vital to the primary advantage of the invention— anonymity.

American Express wins:

American Express proffered evidence demonstrating that it is able to deactivate its gift cards in response to requests from rightful card owners. Upon contacting American Express, the owner is required to provide the gift card account number and other identifying informa- tion to establish that he is the card’s true owner. Priva- cash has failed to submit any evidence indicating that American Express is able to achieve that functionality without compromising anonymity. Thus, the available evidence indicates that American Express does not treat possession of the gift card as proof of ownership. We therefore conclude that the district court properly entered summary judgment of noninfringement.


Post a Comment

<< Home