Kara Technology, Incorporated v Stamps.com, Inc., 582 F.3d 1341 (Fed. Cir. 2009)
Facts: Salim Kara was the sole inventor listed on two patents directed toward apparatuses and methods of creating and verifying the authenticity of documents. Stamps.com joined Kara to collaborate on Kara’s PC-based stamp technology. On May 9, 2000, the parties signed an NDA agreement which required Stamps.com to keep secret and not disclose, nor use any confidential information for its own use except as outlined in the agreement. The agreement also prohibited Stamps.com from making written copies of confidential information. Stamps.com employees took notes at the May 15, 2000 meeting. In July 2000, Stamps.com indicated it was no longer interested in pursuing its relationship with Kara, which was followed by its announcement of beta testing of its own PC-based postage product, the following October.
Procedural Posture: Kara’s action for infringement and breach of the NDA agreement was transferred to the District Court for the Central District of California where it was held that the statute of limitations had run and that the confidential information was in the public domain. Afterwards, the court upheld Kara’s motion to strike a reference to Stamps.com as the prevailing party. Both parties appealed the decision.
Issue: Did the district court incorrectly construe that the Kara’s claims of security indicia must be created and validated under control of a key maintained in the preestablished data, and incorrectly dismiss Kara’s claim for breach of the NDA?
Preexisting Rules: 1.) Corning Glass Works v Sumitomo Elec. U.S.A., Inc.- Claims define the metes and bounds of the patentee’s invention.
2.) Phillips v AWH Corp.- Extrinsic evidence is less significant than the intrinsic record in determining the legally operative meaning of claim language.
3.) Univ. of W.Va., Bd. Of Trs. v VanVoorhies- State law is applied for a contract claim.
Reasoning: Preestablished data does not have to contain a key, and so security indicia does not have to be created or validated by a key in that data. The plain language of the claim requires the security indicia is a mark printed on a document that can be used to verify the authenticity of the document and can be created in part by information contained in the preestablished media data. The district court erred in construing that this required a key in the preestablished data. The district court’s ruling on infringement is invalid. The court’s ruling on the breach is also invalid. Kara asserted that it did not learn of Stamp.com’s misuse of the information obtained at the May 2000 meeting until Oct. 24, 2001. If true, then the charge of breach would still be good. Public disclosure of the information, however, would negate Kara’s claim. A presentation made by Kara in Finland from May 23-25, 2000 and an exhibit by Kara at the World Stamp Expo from July 7-16, 2000 raise genuine issues of material fact regarding disclosure and time of potentially misused confidential information.
Holding: The district court’s claim construction and summary judgment ruling were vacated-in-part, reversed-in-part, and remanded.
Facts: Salim Kara was the sole inventor listed on two patents directed toward apparatuses and methods of creating and verifying the authenticity of documents. Stamps.com joined Kara to collaborate on Kara’s PC-based stamp technology. On May 9, 2000, the parties signed an NDA agreement which required Stamps.com to keep secret and not disclose, nor use any confidential information for its own use except as outlined in the agreement. The agreement also prohibited Stamps.com from making written copies of confidential information. Stamps.com employees took notes at the May 15, 2000 meeting. In July 2000, Stamps.com indicated it was no longer interested in pursuing its relationship with Kara, which was followed by its announcement of beta testing of its own PC-based postage product, the following October.
Procedural Posture: Kara’s action for infringement and breach of the NDA agreement was transferred to the District Court for the Central District of California where it was held that the statute of limitations had run and that the confidential information was in the public domain. Afterwards, the court upheld Kara’s motion to strike a reference to Stamps.com as the prevailing party. Both parties appealed the decision.
Issue: Did the district court incorrectly construe that the Kara’s claims of security indicia must be created and validated under control of a key maintained in the preestablished data, and incorrectly dismiss Kara’s claim for breach of the NDA?
Preexisting Rules: 1.) Corning Glass Works v Sumitomo Elec. U.S.A., Inc.- Claims define the metes and bounds of the patentee’s invention.
2.) Phillips v AWH Corp.- Extrinsic evidence is less significant than the intrinsic record in determining the legally operative meaning of claim language.
3.) Univ. of W.Va., Bd. Of Trs. v VanVoorhies- State law is applied for a contract claim.
Reasoning: Preestablished data does not have to contain a key, and so security indicia does not have to be created or validated by a key in that data. The plain language of the claim requires the security indicia is a mark printed on a document that can be used to verify the authenticity of the document and can be created in part by information contained in the preestablished media data. The district court erred in construing that this required a key in the preestablished data. The district court’s ruling on infringement is invalid. The court’s ruling on the breach is also invalid. Kara asserted that it did not learn of Stamp.com’s misuse of the information obtained at the May 2000 meeting until Oct. 24, 2001. If true, then the charge of breach would still be good. Public disclosure of the information, however, would negate Kara’s claim. A presentation made by Kara in Finland from May 23-25, 2000 and an exhibit by Kara at the World Stamp Expo from July 7-16, 2000 raise genuine issues of material fact regarding disclosure and time of potentially misused confidential information.
Holding: The district court’s claim construction and summary judgment ruling were vacated-in-part, reversed-in-part, and remanded.