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99-1324 99-1324 UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT BRIEF FOR APPELLANT INTERACTIVE GIFT EXPRESS, INC. (NOW KNOWN AS E-DATA, INC.) INTERACTIVE GIFT EXPRESS, INC. (now known as E-Data, Corp.), Plaintiff-Appellant, v. COMPUSERVE INCORPORATED and APOGEE SOFTWARE LIMITED, and BRODERBUND SOFTWARE, INC. and INTUIT, INC., and INTERNET SOFTWARE INC., and SOFT & NET DISTRIBUTION, S.A., and SOFTLOCK SERVICES, INC., and TELEBASE SYSTEMS, INC., and THE LIBRARY CORPORATION, and WALDENBOOKS, and ZIFF-DAVIS PUBLISHING COMPANY, Defendants-Appellees. Appeal from the United States District Court for the Southern District of New York in 95-CV-6871, Judge Barbara S. Jones. GRAHAM & JAMES LLP Albert L. Jacobs, Jr. Daniel A. Ladow Philip M. Weiss David K. Bowles 885 Third Avenue, 21st Floor New York, NY 10022-4802 (212) 848-1000 Attorneys for Plaintiff-Appellant E-DATA, INC. CERTIFICATE OF INTEREST[omitted for Web publication] TABLE OF AUTHORITIES[omitted for Web publication] LIST OF ABBREVIATIONS “Court” The United States Court of Appeals for the Federal Circuit “Defendants” All defendants before the United States District Court for the Southern District of New York in Civil Action 95-CV-6871 “District Court” The United States District Court for the Southern District of New York in Civil Action 95-CV-6871, Judge Barbara S. Jones “E-Data” The Plaintiff-Appellant, E-Data, Inc., formerly known as “Interactive Gift Express, Inc.” “ICM” Information Control Machine, as the term is used in the Patent “IMM” Information Manufacturing Machine, as the term is used in the Patent “May 1998 Order” The District Court’s Opinion and Order of May 13, 1998 “Patent” or “Freeny Patent” U.S. Patent No. 4,528,643, “System or “Patent in Suit” for Reproducing Information in Material Objects at a Point of Sale Location” STATEMENT OF RELATED CASES There are no related cases within the meaning of Federal Circuit Rule 47.5. No appeal from the same civil action has previously been before the U.S. Court of Appeals for the Federal Circuit (the “Court”) or any other appellate court under any title. An earlier appeal in this matter (relating to a defendant-appellee which is not a party to the present appeal) was filed by E-Data and subsequently withdrawn. See Notice of Appeal, docketed February 17, 1999 (docket number 99-1244); and Plaintiff E-Data’s Motion To Withdraw Appeal, dated March 11, 1999. E-Data is unaware of any other cases pending before the Court which will directly affect or be directly affected by this court’s decision in the pending appeal. JURISDICTIONAL STATEMENT The District Court had jurisdiction over this patent infringement suit under 28 U.S.C. � 1338(a). Pursuant to 28 U.S.C. � 1295(a)(1), the U.S. Court of Appeals for the Federal Circuit has jurisdiction over this appeal from a final order of the District Court. Notice of this appeal was filed on March 19, 1999, with an amended notice of appeal filed on March 22, 1999, both within thirty days of the March 12, 1999 Stipulated Order and Judgment, and this appeal is therefore timely pursuant to 28 U.S.C. � 2107 and Federal Rule of Appellate Procedure 4(a). STATEMENT OF THE ISSUES 1. Did the District Court err in relying on a preferred embodiment to impose several limitations on the claim element “point of sale location”, including a limitation that such location could not be a consumer’s home or office, when this claim element has a clearly understood meaning, the imposed limitations do not appear in the claims, the specification, or the prosecution history, and the specification includes two examples in which a consumer’s home is a point of sale location? 2. Did the District Court err in relying on a preferred embodiment to limit independent Claims 1 and 29 so as to require storage of information in an information manufacturing machine prior to the consumer’s request for it, and thus to exclude real-time delivery of the information, where although independent Claim 37 contains such a limitation, independent Claims 1 and 29 contain no such limitation, and the specification describes an embodiment which utilizes the real-time delivery of information? 3. Did the District Court err in relying on a preferred embodiment to impose six limitations on the claim element “material object”, where that term has a clear meaning as used in the claims, the imposed limitations do not appear in the claims, and the imposed limitations are not supported by the specification? 4. Did the District Court err in reading a limitation from a preferred embodiment into the claim element “authorization code”, where the imposed limitation does not appear in the claims, and is not required by the specification or the prosecution history? 5. Did the District Court err by relying on a preferred embodiment to limit the meaning of the claim element “Information Manufacturing Machine” where the imposed limitation does not appear in the claims or in the prosecution history? 6. Did the District Court err in relying on a preferred embodiment and construing all claims of the Patent so as to exclude the production, sale, and use of encrypted CD-ROMs, by adding certain limitations that do not appear in the claims, specification, or prosecution history? STATEMENT OF THE CASE In the District Court, E-Data alleged that Defendants, which include computer software and publishing companies, contributorily infringed the Patent by, inter alia, their “on-line” sale to consumers over the Internet of information (e.g., software or documents) which can be reproduced in a tangible form. The District Court limited discovery to claim construction matters. No Markman hearing was held, but in an Opinion and Order dated May 13, 1998 the District Court construed the claims extremely narrowly. Interactive Gift Exp., Inc. v. Compuserve Inc., 47 U.S.P.Q.2d 1797, 1998 WL 247485 (S.D.N.Y., May 15, 1998). Among other things, the District Court interpreted (i) the claim language “point of sale location” as excluding a consumer’s home or office, and (ii) all of the claims as not encompassing the real-time delivery of the desired information, and (iii) read other very narrowing limitations into the claims. On June 11, 1998, E-Data moved for reconsideration of the District Court’s claim construction as embodied in its May 1998 Order, emphasizing that the District Court had improperly imported limitations into the claims that are contrary to the intrinsic record of the Patent and had improperly based those limitations upon certain preferred embodiments which, for example, describe point of sale locations as retail outlets. By an Order dated November 30, 1998, the District Court held that E-Data was not entitled to reconsideration, but did not address the substance of the arguments made by E-Data in its motion for reconsideration. Interactive Gift Exp., Inc. v. Compuserve Inc., 1999 WL 49360 (S.D.N.Y., Feb. 2, 1999). On the basis of the claim construction set forth in the May 1998 Order, E-Data stipulated to an Order entered on March 12, 1999 dismissing its infringement claims as to all Defendants with prejudice, but without prejudice to E-Data’s right to appeal. E-Data now appeals from that March 1999 Order and the underlying May 1998 Order on claim construction. [FOOTNOTE 1] STATEMENT OF THE FACTS I. BACKGROUND The application, Serial No. 456,730, which matured into U.S. Patent No. 4,528,643, was filed on January 10, 1983. The Patent, entitled “System for Reproducing Information in Material Objects at a Point of Sale Location”, issued on July 9, 1985, and names Charles Freeny as the sole inventor. E-Data is the owner of the Patent by virtue of assignment. The invention described and disclosed in the Patent relates to a system that allows a more efficient, economical and direct means of selling information capable of being reproduced in tangible form to consumers while assuring that the seller/owner of the information will be compensated for such reproduction. A00077-A00078 at cols. 1-4. II. INDEPENDENT CLAIMS 1 AND 29 ARE BROADLY WORDED, DO NOT EXCLUDE A CONSUMERS’ HOME OR OFFICE FROM BEING A “POINT OF SALE LOCATION”, AND DO NOT EXCLUDE REAL-TIME DELIVERY OF INFORMATION Relying on preferred embodiments, the District Court read a number of extremely narrowing limitations into the claims, including that: (i) a consumer’s home cannot be a “point of sale location”; (ii) the claims do not encompass the real-time delivery of information to the point of sale location; and (iii) “material objects” must be available for sale at the point of sale location. A00040-A00044, A00030-A00037, A00044-A00048. However, independent Claims 1 and 29 of the Patent are of broad scope and do not contain any of these limitations. Claim 1 reads as follows: A method for reproducing information in material objects utilizing information manufacturing machines located at point of sale locations, comprising the steps of: providing from a source remotely located with respect to the information manufacturing machine the information to be reproduced to the information manufacturing machine, each information being uniquely identified by a catalog code; providing a request reproduction code including a catalog code uniquely identifying the information to be reproduced to the information manufacturing machine requesting to reproduce certain information identified by the catalog code in a material object; providing an authorization code at the information manufacturing machine authorizing the reproduction of the information identified by the catalog code included in the request reproduction codes; and receiving the request reproduction code and the authorization code at the information manufacturing machine and reproducing in a material object the information identified by the catalog code included in the request reproduction code in response to the authorization code authorizing such reproduction. [A00090 at col. 28 lns. 22-47 (emphasis added)]. Claim 29 reads: A method for reproducing information in material objects utilizing information manufacturing machines located at point of sale locations and an information control machine located remotely with respect to the information manufacturing machines, the information manufacturing machines being capable of communicating from a point of sale location a request reproduction code requesting to reproduce selected information in a material object utilizing an information manufacturing machine located at a point of sale location, comprising the steps of: providing the selected information to the information manufacturing machine located at the point of sale location, receiving the request reproduction code including a catalog code uniquely identifying the information to be reproduced at the information control machine at a location remote with respect to the point of sale location and communicating for receiving by an information manufacturing machine at the point of sale location an authorization code including a catalog code uniquely identifying the information to be reproduced authorizing the reproduction of the information identified by the catalog code by the information manufacturing machine located at the point of sale location. [A00094 at col. 35 lns. 10-36 (emphasis added)]. Plainly, there is no limitation whatsoever in claims 1 and 29 that excludes a consumer’s home from the scope of the phrase “point of sale location.” The only prerequisites for a point of sale location that appear on the face of these claims are that the point of sale location be located (i) remotely from the source of the desired information and (ii) where there is a machine (an “information manufacturing machine”)(“IMM”) capable of reproducing the information in tangible form. Moreover, “point of sale” is a common phrase and the phrase “point of sale location” has a clear meaning: it refers to the location at which the consumer makes a purchase. Nor is there any limitation in these claims that excludes the real-time delivery of the desired information from a remotely located source to the point of sale location. Similarly, contrary to the limitations imposed by the District Court, there are no limitations in these claims requiring, for example, that blank material objects, separate from the IMM, be available for sale to consumers at the point of sale location. III. THE SPECIFICATION SPECIFICALLY REFERS TO CONSUMERS’ HOMES AS “POINT OF SALE LOCATIONS“ The specification, in the section headed “Background of the Invention”, specifically refers to consumers’ homes as point of sale locations: Also, in recent years, pay, cable or subscription television has become a popular means for distributing television type information. In some of these systems, the television type information only was delivered to the consumer at the consumer’s home (point of sale location) in response to the consumer requesting such information . . . [A00078 at col. 3 lines 62-68 (emphasis added)]. The section of the specification headed “Description of the Preferred Embodiment” also contains a second reference to the home as a point of sale location. Referring to the example of information embodied in recordings, high quality music requires a bandwidth of 20KHz and, when digitized, the necessary communication bandwidth would be 160 KHz. . . . Cable TV channels (6 megahertz bandwidth) could reduce the data transmission time from 4,000 minutes down to 0.8 minutes; but since 10,000 outlets (point of sale locations) may be trying to get the information at the same time, even such a method would still be impractical on a production line basis if the information to be reproduced had to be transmitted each time. Cable tv communication links would be a good method for delivering master files on a one time basis. [A00088 at col. 24 lns. 8-32 (emphasis added)]. This reference to “10,000 outlets (point of sale locations)… trying to get information at the same time” is plainly a reference to the consumer’s home as a “point of sale location.” A00088 at col. 24 lns. 26-28. Thus, the specification not only specifically defines a consumer’s home as a point of sale location (A00078 at col. 3, lns. 62-68), but also refers to an embodiment involving the consumer’s home as a point of sale location. A00088 at col. 24, lns. 8-32. IV. CLAIMS 1 AND 29 DO NOT REQUIRE THAT THE DESIRED INFORMATION BE “STORED” IN THE IMM PRIOR TO THE CONSUMER’S REQUEST, IN CONTRAST WITH CLAIM 37, WHICH DOES CONTAIN SUCH A LIMITATION Claims 1 and 29 are method claims with no limitation that excludes real-time delivery of the desired information. Independent Claim 37, however, is an apparatus claim in which the desired information is predelivered and “stored” in the IMM until the customer makes the request: 37. An apparatus for reproducing information in material objects at point of sale locations, comprising: an information manufacturing machine located at a point of sale location for reproducing information in material objects, each information to be reproduced being uniquely identified by a catalog code and each information being received from a source remotely located with respect to the information manufacturing machine and each information being stored in the information manufacturing machine, the information manufacturing machine receiving a request reproduction code including a catalog code uniquely identifying the information to be reproduced and being adapted to provide an authorization code including the catalog code included in the request reproduction code, and the information manufacturing machine being adapted to reproduce the information identified by the catalog code in a material object in response to receiving the authorization code. [A00094 at col. 36 lns. 45-64 (emphasis added)]. The District Court interpreted independent Claims 1, 29 and 37 to exclude real-time delivery of the desired information even though the crucial claim limitation language on this point (the word “stored”) appears only in Claim 37 and not in Claims 1 and 29. V. THE SPECIFICATION SPECIFICALLY REFERS TO AN EMBODIMENT INVOLVING REAL-TIME DELIVERY OF INFORMATION The specification specifically refers to an embodiment involving real-time delivery of information: In one embodiment and in response to receiving a request reproduction code, the information control machine 12can be programmed to encode the encoded information and communicate the encoded information over the communication link 18for reception and reproduction by the information manufacturing machine 14in a manner like that described before with respect to the catalog reproduce codes and the catalog transmit codes. In this manner, the information manufacturing machines 14would not have any encoded information stored therein and could only function to reproduce information in material objects in response to receiving an authorization code which would include the encoded information. However, considering the communication link 18to be a telephone line or an airway transmission type of link, the real time required to transmit the actual encoded information would not render this last mentioned embodiment economical from a time or expense viewpoint, except for transmitting encoded information to update the encoded information in the information manufacturing machines 14. For this reason, the preferred embodiment has been described as transmitting only programs over the communication link 18in response to receiving request reproduction codes, which transmission time would be relatively small. [A00088 at col. 24 lns. 33-58 (emphasis added)]. Thus, although real-time delivery of information is not a preferred embodiment (owing to the more limited bandwith and communication speed possible at the time of the filing of the application) the specification clearly illustrates an embodiment involving such real-time delivery. VI. THE TERM “MATERIAL OBJECT” HAS A PLAIN MEANING IN THE CLAIMS AND IS BROADLY DEFINED IN THE SPECIFICATION As used in Claims 1 and 29 (quoted above), for example, the term “material object” has a clear meaning: it is a tangible medium or device capable of containing information and from which the information can be perceived or retrieved. Moreover, the specification defines “material object” in broad terms: a medium or device in which information can be embodied or fixed and from which the information embodied therein can be perceived, reproduced, used or otherwise communicated, either directly or with the aid of another machine or device.” [A00078 at col. 4 lns. 36-41]. None of the limitations that the District Court imposed on the term “material object” appear in the claims. Thus, nowhere in independent Claims 1 and 29 do the following limitations, which the District Court read into the claims, appear: i.e., that material objects (1) must permanently store the information; (2) be offered for sale at the IMM; (3) independently from the information; (4) be physically separate and distinct from the IMM; (5) be removed by the consumer; and (6) be intended for use by the consumer at a loction other than the point of sale location. A00058 at 43. VII. THE CLAIMS DO NOT CONTAIN THE LIMITATIONS IMPOSED BY THE DISTRICT COURT ON THE CLAIM ELEMENTS “INFORMATION MANUFACTURING MACHINE” AND “AUTHORIZATION CODE” The District Court imposed a number of very narrowing limitations on the claim elements “Information Manufacturing Machine” and “Authorization Code.” For example, the District Court held that the authorization code must be comprised of several other codes, including an IMM code, encoded catalog code, encoded catalog decipher program, and an encoded catalog authorization select code. A00039-A00040. The District Court also held that an IMM must be comprised of four separate and distinct units: a master file unit, a manufacturing control unit, information manufacturing unit, and a reproduction unit. A000487. None of these limitations appear in Claims 1 and 29 with respect to these elements. In Claim 1, for example, the authorization code simply authorizes the reproduction of the information into or on a material object, and the only requirements in Claim 1 regarding the IMM are that it be located remotely from the source of the information, receive an Authorization Code, and reproduce the information in a material object. VIII.THE PROSECUTION HISTORY DOES NOT LIMIT THE SCOPE OF THE CLAIMS At no time did the Examiner reject any of the claims; the prosecution history does not provide any support for the limitations read into the claims by the District Court, nor did the District Court rely on the prosecution history in construing the claims. SUMMARY OF THE ARGUMENT The dismissal of E-Data’s infringement claims was based upon the District Court’s extremely narrow construction. Relying on preferred embodiments involving retail outlets, the District Court imported several limitations into the claims, including excluding consumers’ homes from the scope of the phrase “point of sale location”, excluding the real-time delivery of information, requiring that blank material objects be available for sale at all point of sale locations, and reading numerous other limitations into the claims. These limitations are contrary to the intrinsic record of the Patent and this Court’s well-established rules of claim construction as set forth in such cases as Vitronics and Comark Communications. Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 39 U.S.P.Q.2d 1573 (Fed.Cir. 1996); Comark Communications, Inc. v. Harris Corp., 156 F.3d 1182, 48 U.S.P.Q.2d 1001 (Fed.Cir. 1998). First, none of these limitations are specified in independent Claims 1 and 29 themselves, the specification or the prosecution history; accordingly, the claims should be given the broadest reading. Second, because the meaning of the phrase “point of sale location” is clear on the face of the claims, and simply means the place at which the consumer effects a purchase, no recourse to the specification is necessary. Third, the specification itself specifically refers in at least two places to consumers’ homes as point of sale locations. Fourth, the specification clearly illustrates an embodiment, albeit not preferred, that utilizes real-time delivery. Fifth, while Claim 37 has language that excludes real-time delivery, no such limitation appears in Claims 1 and 29, and under the doctrine of claim differentiation no such limitation should be imported into Claims 1 and 29. Finally, the District Court’s importation of these highly narrowing limitations into the claims, particularly into Claims 1 and 29, is erroneous for the fundamental reason that the District Court premised these limitations on preferred embodiments, a method of construction which directly contravenes the governing law as set forth in such cases as Comark Communications, 156 F.3d 1182. Other limitations imposed by the District Court with respect to the elements “Material Object”, “Authorization Code” and “IMM” are legally erroneous for the same or similar reasons, and in particular because these limitations are based on preferred embodiments. For example, the District Court found that blank material objects must be available for sale at point of sale locations. This limitation is erroneous because it does not appear in the claims and is based on a particular preferred embodiment involving a retail outlet. Moreover, once it is recognized that a point of sale location can be a consumer’s home, it defies logic to impose a limitation into the claims requiring that blank material objects be available for sale at all point of sale locations. Finally, the District Court also erred by construing all claims of the Patent as specifically excluding the sale and use of encrypted CD-ROMs. Here again, the District Court improperly relied upon a preferred embodiment to read this limitation into the claims, where such a limitation does not appear in the claims, is not required by the specification, and was not specified during prosecution. For these and further reasons set forth below, the District Court’s Order on claim construction should be reversed and the Judgment dismissing the action vacated. ARGUMENT THE DISTRICT COURT ERRED BY READING HIGHLY RESTRICTIVE LIMITATIONS INTO THE CLAIMS BASED ON PREFERRED EMBODIMENTS, PARTICULARLY WHERE SUCH LIMITATIONS ARE NOT SPECIFIED IN THE CLAIMS, SPECIFICATION, OR PROSECUTION HISTORY AND WHERE THE BROAD LANGUAGE OF THE CLAIMS AND LANGUAGE IN THE SPECIFICATION SUPPORT E-DATA’S CLAIM INTERPRETATION The March 1999 Stipulated Order and Judgment dismissing E-Data’s claims of infringement was based on the District Court’s claim construction of the following elements and limitations: (i) point of sale location; (ii) material object; (iii) information manufacturing machine (“IMM”); (iv) authorization code; and (v) that information be stored at the IMM before receipt of the request reproduction in code and the authorization code. A02246. As further detailed below, the District Court’s claim construction with respect to these claim elements or limitations is subject to de novo review and is legally erroneous because it rests on reading particular embodiments and examples appearing in the specification into the claims. See Comark Communications, 156 F.3d at 1187. A chart summarizing the District Court’s and E-Data’s respective constructions of these claims is contained in Part 1 of the Addendum. I. STANDARD OF REVIEW: THE DISTRICT COURT’S DECISION IS SUBJECT TO DE NOVO REVIEW Because E-Data’s patent infringement claims were dismissed based upon the District Court’s claim construction, only that claim construction is at issue on the present appeal. Claim construction is an issue of law which is reviewed de novo on appeal and without deference to the district court. Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1448, 1456, 46 U.S.P.Q.2d 1169, 1173 (Fed.Cir. 1998); Signtech USA, Ltd. v. Vutek, Inc., 50 U.S.P.Q.2d 1372, 1374, 1999 WL 194740, *3 (Fed.Cir., Apr. 8, 1999); Digital Biometrics, Inc. v. Identix, Inc., 149 F.3d 1335, 1344, 47 U.S.P.Q.2d 1418, 1424 (Fed.Cir. 1998). Any “allegedly fact-based questions relating to claim construction” are also given plenary review. Cybor, 138 F.3d at 1456. II. “POINT OF SALE LOCATION”, AS USED IN THE CLAIMS, ENCOMPASSES CONSUMERS’ HOMES AND OFFICES A. None of The Limitations Imposed By The District Court On The Phrase “Point Of Sale Location” Appear In Claims 1 and 29, And The Meaning Of That Term As Used In The Claims Is Clear The District Court held that the “point of sale location”, as the term is used in Claims 1-56 of the Freeny patent, must, at a minimum, have each and every one of the following limitations: a. It must have at least one IMM and therefore at least one device for reproducing information in material objects (a reproduction unit), and at least two blank material objects upon which preselected information stored at the IMM can be reproduced; b. It must have available for sale to consumers, separate from the IMM, blank material objects wherein preselected information can be reproduced; and c. It must be a location to which a consumer goes or travels for the purpose of purchasing material objects onto which preselected information can be reproduced. A consumer’s home is not a point of sale location within the meaning of the Freeny patent. [A00057-A00058 (emphasis added)]. These limitations simply do not appear in the claims. The term “point of sale location” appears once in Claim 1: A method for reproducing information in material objects utilizing information manufacturing machines located at point of sale locations, comprising the steps of . . . providing from a source remotely located with respect to the information manufacturing machine the information to be reproduced . . . [A00090 at col. 28 lns. 22-28 (emphasis added)]. In construing a claim, the “starting point is . . . always with the language of the asserted claim itself.” Comark Communications, 156 F.3d at 1186. The only requirements for a point of sale location in the claim are that (i) it be located remotely from the source of the information and (ii) that an IMM be located there. [FOOTNOTE 2]There is no language in the claim that excludes a consumer’s home from being a point of sale location, that requires that blank material objects be separately available for sale to consumers at that location, or that a consumer must “travel” to the point of sale location. Furthermore, where, as here, a term in a claim has a clear meaning, recourse to the specification is not necessary. Comark Communications, 156 F.3d at 1187. The term “point of sale location” as used in the claims has a clear meaning; it is simply the location at which the consumer makes or effects a purchase. [FOOTNOTE 3]Therefore, on this basis alone, this term should not be construed to exclude consumers’ homes. B. The District Court’s Construction Is Erroneous Because, Inter Alia, It Relies On A Preferred Embodiment And Wrongly Discounts Or Overlooks References In The Specification To A Consumer’s Home As A Point Of Sale Location In arriving at its construction of the term “point of sale location”, the District Court (i) relied on a preferred embodiment, (ii) misconstrued a statement in the specification to the effect that a consumer “goes” to such a location as indicating “travels”; and (iii) erroneously discounted a specific reference in the specification to consumers’ homes as a point of sale location and overlooked another such reference. 1. The District Court’s Construction Improperly Relies On A Preferred Embodiment E-Data contends that when a personal computer is used by a consumer to reproduce information from a remotely located source, and the consumer effects the purchase of such information from his or her home or office, that the home or office constitutes a point of sale location within the meaning of the claims. The District Court disagreed, holding that a point of sale is a location to which a “consumer travels in order to purchase material objects embodying preselected information” “such as a retail outlet.” A00042. In support of this conclusion, the District Court states: When first used in the text of the specification, the term “point of sale location” explicitly refers to “retail outlets.” Freeny Patent, Col. 1 Lns. 17-18. The specification then continues to refer to a point of sale location as a “retail outlet” or “retailer,” see, e.g., id. Col. 1 Lns 37-38; Col. 2 Ln. 13; Col. 2 Ln. 63; Col. 2 Ln. 67, and defines “retailers” as “owners of point of sale locations.” Id. Col. 3 Lns. 41-42. [A00041]. * * * Moreover, a point of sale location must be a location at which blank material objects are available for sale to consumers. There is no indication in the patent that the material objects on which the IMM is to reproduce information are stored in the IMM. Rather, the patent indicates that blank material objects are sold to consumers, separate and apart from the IMM, at the point of sale location. As the Freeny patent indicates, “[e]ach point of sale location has at least one information manufacturing machine, at least one reproduction unit and a plurality of blank material objects.” Id. Col. 12 lns. 66-68. The patent further indicates that the owners of point of sale locations are the ones that sell to consumers the blank material objects that are to be used with the IMM, such as 8-track or cassette tapes, and that this sales transaction is separate from any sale that results from the IMM reproducing information onto this material object. See id. Col. 13 lns. 39-44.[A00042]. This reasoning is faulty on several grounds. To begin with, as further discussed below, retail outlets are not the only sites that the specification refers to as point of sale locations; the specification also refers to consumers’ homes and kiosks or machines as point of sale locations. Furthermore, the portion of the specification to which the District Court points as requiring that blank material objects be available for sale at point of sale locations (i.e., A00083 at col. 13, lns. 39-44) concerns an extremely narrow, particularized embodiment or example. Thus, the two sentences that precede this portion (i.e., A00083 at col. 13, lns. 31-39) make clear that this instance of the owner of the point of sale location being paid for a blank material object is in the context of the particular scenario in which a “consumer desired to pay cash” rather than place the purchase on his or her credit card. [FOOTNOTE 4](A00083 at col. 13, lns. 31-32, emphasis added). That the Court relies on this particularized example (as well as on the preferred embodiments or examples involving retail outlets) to import highly narrowing limitations into the claims vividly illustrates the fundamental flaw in the District Court’s interpretative analysis. As this Court stated in Comark Communications: “It is precisely against this type of claim construction that our prior case law counsels.” Comark Communications, 156 F.3d at 1187. “[L]imitations from the specification are not to be read into the claims.” Id. at 1186, (citing cases where: “This court has cautioned against limiting the claimed invention to preferred embodiments or specific examples in the specification.”) See also Stiftung v. Renishaw PLC, 945 F.2d 1173, 1178, 20 U.S.P.Q.2d 1094, 1098 (Fed.Cir. 1991) (although the specification referred repeatedly to a certain means of carrying out an aspect of the invention, this fact did not create a limitation on the claim language). Thus, the District Court’s imposition of limitations on the scope of the term “point of sale location” do not appear in the claims, but were instead read in from preferred embodiments and specific examples in the specification. Accordingly, all of these limitations, including the exclusion of consumers’ homes from the scope of that term and the requirement that material objects be available for sale at all point of sale locations were wrongly imposed as a matter of law for this reason alone. See Comark Communications, 156 F.3d, and cases cited therein at 1186-87. See also Electro Medical Systems, S.A. v. Cooper Life Sciences, Inc., 34 F.3d 1048, 1054, 32 U.S.P.Q.2d 1017, 1021 (Fed.Cir. 1994) (“particular embodiments appearing in a specification will not be read into the claims when the claim language is broader than such embodiments”.) 2. The District Court’s Holding That A Consumer Must “Travel” To A Point Of Sale Location Is Erroneous In construing the term point of sale location, the District Court found: [T]he specification indicates that “[t]he point of sale location is a location where a consumer goes to purchase material objects embodying predetermined or preselected information.” Freeny Patent, Col. 5 Lns. 47-50. Clearly, this language, and particularly the word “goes,” indicates that a point of sale location is a place, such as a retail outlet, to which a consumer travels in order to purchase material objects embodying preselected information. [A00041-A00042] However, neither the claims nor the statement in the specification relied on by the District Court require the consumer to “travel” to the point of sale location. The ordinary meaning of the phrase is that a consumer “goes” to wherever the IMM (such as personal computer) is located and where the consumer can effect a purchase of the desired information, whether that is to a store, to a neighbor’s house, or to a particular room in the consumer’s house. 3. The District Court Improperly Discounted One Reference In The Specification To A Consumer’s Home As A Point Of Sale Location And Overlooked Another As set forth above, the “Background of the Invention” section of the specification states in part: In some of these systems, the television type information only was delivered to the consumer at the consumer’s home (point of sale location) in response to the consumer requesting such information and paying an appropriate amount to the owner of such information. [A00078 at col. 3 lns. 64-col. 4 ln. 1 (emphasis added)]. The District Court recognized this specific reference to consumers’ homes as point of sale locations, but wholly discounted it, stating: [this passage] is not describing the Freeny invention, but rather a prior art cable television distribution system wherein a particular cable program would be delivered to a consumer’s home . . . . the Freeny patent criticizes this system for being unable to perform certain functions of the Freeny invention . . . . . Nowhere else in the patent is the term point of sale location used to refer to a consumer’s home. [A00043]. To begin with, as noted above, the District Court is mistaken in saying that this is the only instance in the specification where consumers’ homes are referred to as point of sale locations. Much later in the specification, as part of the lengthy section headed “Description of the Preferred Embodiment,” there is the following passage: Referring to the example of information embodied in recordings, high quality music requires a bandwidth of 20KHz and, when digitized, the necessary communication bandwidth would be 160 KHz. . . . Cable tv channels (6 megahertz bandwidth) could reduce the data transmission time from 4,000 minutes down to 0.8 minutes; but since 10,000 outlets (point of sale locations) may be trying to get the information at the same time, even such a method would still be impractical on a production line basis if the information to be reproduced had to be transmitted each time. Cable tv communication links would be a good method for delivering master files on a one time basis. [A00088 at col. 24 lns. 8-32 (emphasis added)]. The term “10,000 outlets (point of sale locations)” which may be “trying to get the information at the same time” plainly refers to the cable TV consumers and the point of sale location being referred to is their homes. The District Court’s reasoning in giving no weight to the reference to consumer’s homes as a point of sale location in the “Background of the Invention” section is incorrect. This passage shows that the patentee specifically recognized that a consumer’s home is a point of sale location. It is irrelevant that the Patent criticizes deficiencies in the prior art cable television systems. Prior art retail stores are also criticized (see, e.g., A00077 at col. 2 lns. 13-24), yet the District Court held that these were within the scope of the claims. A00041. Moreover, the Patent distinguishes the Freeny invention from cable television systems on the basis that the cable system could only deliver information to the consumer in a “transitory” form, as opposed to the Freeny invention which allows the consumer to obtain the desired information in a fixed, material object. There is nothing in the passage or in the prosecution history that suggests the patentee was drawing any distinction between the prior art cable system and the method of the Freeny invention on the basis of the site of the point of sale location, much less any suggestion that the patentee intended to exclude the home from the meaning of that phrase. Of course, an example need not be described several times in order to avoid having a limitation read into the claims. It is the claims, and not the specification, which measures the invention. SRI Int’l v. Matsushita Electric Corp., 775 F.2d 1107, 1121, 227 U.S.P.Q.2d 577, 583 (Fed.Cir. 1985). C. The Vending Machine Example In The Specification Also Supports E-Data’s Construction Of The Term “Point Of Sale Location” The specification discusses an embodiment of the invention “adapted to function in the nature of machines commonly referred to as vending machines.” A00089 at col. 26 lns. 33-34. Such a vending machine version of the invention could obviously be located anywhere, including public areas and offices. These examples provide further evidence that the patentee did not intend to limit the claims merely to retail or wholesale outlets. D. The Prosecution History Supports E-Data’s Construction Of The Term “Point Of Sale Location” To Include The Consumer’s Home None of the claims were rejected during prosecution and at no time during prosecution did the applicant exclude a consumer’s home from the scope of the term point of sale location. For this reason (coupled with the lack of any such limitation in the claims), the claims should be given the broadest reading. Moreover, certain statements in the information disclosure statement provide further support for E-Data’s claim interpretation. For example, the information disclosure statement contains a list of, among other things, systems of data transmission known in the art. A02399-A02403. These systems, including cable television and vending machines, which could be adopted for use in connection with the Freeny invention, involve a consumer’s home or the location of the vending machine as a point of sale location. * * * For all of these reasons, the limitations imposed by the District Court on the term “point of sale location” are legally incorrect. As used in the claims, the term simply means a location at which a consumer effects the purchase of the desired information and requires a location remote from the source of the information and at which there is an IMM (i.e., a machine capable of reproducing the information in a material object). III. THE DISTRICT COURT ERRED BY EXCLUDING REAL-TIME DELIVERY OF INFORMATION FROM THE SCOPE OF CLAIMS 1 AND 29 A. The District Court Held That Information Must Be Predelivered To Or Stored In The IMM, And Therefore That Real-Time Delivery Was Excluded From The Claims The District Court held that: Claims 1-56 of the Freeny patent are confined to a method, system or apparatus whereby a consumer uses an “information manufacturing machine” (“IMM”) (as defined below) to reproduce in a material object (as defined below) an item of information from among a collection of catalogued information items, all of which were predelivered to and stored at the IMM. Claims 1-56 of the Freeny patent do not cover real-time transactions where the requested item of information is transmitted to the IMM at the time it is requested by the consumer. [A00056-57]. The District Court thus excluded real-time delivery from the scope of the claims. B. Claims 1 and 29 Do Not Exclude Real-Time Delivery Of Information As shown above, Claim 1 is a method claim wherein the information is provided from a source remotely located with respect to the IMM, the information to be reproduced by the IMM in a tangible form. Similarly, Claim 29 is a method claim wherein information is provided from an Information Control Machine remotely located with respect to the IMM, the information to be reproduced by the IMM in a tangible form. Nowhere are the words “stored” or “predelivered” used in Claims 1 or 29, nor is there any reference to information being stored at the IMM. Accordingly, neither of these claims excludes real-time delivery. C. By Contrast, Real-Time Delivery Of Information Is Excluded From The Scope Of Claim 37, And To Read This Limitation Into Claims 1 And 29 Violates The Doctrine Of Claim Differentiation Claim 37, an apparatus claim, is the only independent claim whose scope is limited to “information being stored in the information manufacturing machine.” Because this claim specifies that the information must be “stored”, it does not literally include real-time delivery of information, but refers instead to an embodiment in which the information is stored in the IMM prior to a consumer’s request for it. This limitation (i.e., neither the word “stored” nor any similar phrase), does not appear in independent Claims 1 and 29. [FOOTNOTE 5] Clearly the patentee knew what the term “stored” meant, and used it when he wanted to require that the information be stored. Pursuant to the doctrine of claim differentiation: “There is presumed to be a difference in meaning and scope when different words or phrases are used in separate claims.” Tandon Corp. v. United States Int’l Trade Comm’n, 831 F.2d 1017, 1023, 4 U.S.P.Q.2d 1283, 1288 (Fed.Cir. 1987); see also, Uniroyal, Inc. v. Rudkin-Wiley Corp., 837 F.2d 1044, 1054-55, 5 U.S.P.Q.2d 1434, 1441-1442 (Fed.Cir.) cert denied, 488 U.S. 825 (1988); Comark Communications, 156 F.3d at 1187. Thus, under the doctrine of claim differentiation, Claims 1 and 29, which do not have the “stored” limitation that appears in Claim 37, should not be read as having the same meaning and scope as Claim 37. [FOOTNOTE 6] D. The Specification Specifically Refers To An Embodiment Which Utilizes Real-Time Delivery One of the embodiments described in the specification specifically illustrates real-time delivery of the information, as opposed to the information having been stored in the IMM prior to the consumer’s request for it. In one embodiment and in response to receiving a request reproduction code, the information control machine 12 can be programmed to encode the encoded information and communicate the encoded information over the communication link 18 for reception and reproduction by the information manufacturing machine 14 in a manner like that described before with respect to the catalog reproduce codes and the catalog transmit codes. In this manner, the information manufacturing machines 14 would not have any encoded information stored therein and could only function to reproduce information in material objects in response to receiving an authorization code which would include the encoded information. However, considering the communication link 18 to be a telephone line or an airway transmission type of link, the real time required to transmit the actual encoded information would not render this last mentioned embodiment economical from a time or expense viewpoint, except for transmitting encoded information to update the encoded information in the information manufacturing machines 14. For this reason, the preferred embodiment has been described as transmitting only programs over the communication link 18 in response to receiving request reproduction codes, which transmission time would be relatively small. [A00088 at col. 24 lns. 33-58 (emphasis added)]. While real-time delivery of the desired information is not the preferred embodiment, this passage makes plain that utilizing real-time delivery is one embodiment. Moreover, it is also evident from this passage that a preferred embodiment includes the real-time delivery of programs, and could include the real-time delivery of the information itself, depending on transmission times. [FOOTNOTE 7] The District Court recognized that this passage concerns an embodiment involving real-time delivery of information, but discounted it as “teach[ing] away” from real-time delivery. A00035. However, while it is true that real-time delivery of the information is not a preferred embodiment, it is an embodiment (which, the specification implicitly indicates, could be a preferred embodiment with faster communication links). Claims should not be construed so as to exclude embodiments. See SmithKline Diagnostics, Inc. v. Helena Laboratories Corp., 859 F.2d 878, 883, 8 U.S.P.Q.2d 1468, 1472 (Fed.Cir. 1988) (where the specification disclosed the use of hemoglobin but stated that hemin should be preferably used instead, this Court held that the use of hemoglobin should not be excluded from the scope of the claims); Vitronics Corp., 90 F.3d at 1583 (“Such an interpretation [which excludes a preferred embodiment] is rarely, if ever, correct and would require highly persuasive evidentiary support . . . .”) Accordingly, the District Court erred in imposing a limitation on Claims 1 and 29 which would exclude an embodiment (real-time delivery) that is described in the specification. E. The District Court Erred In Concluding That Claim 1 Entails A Certain Step-Wise Sequence That Excludes Real-Time Delivery In concluding that Claim 1 excludes real-time delivery, the District Court found that Claim 1 requires a sequential four-step process: (i) an information delivery stage; (ii) a request reproduction code stage; (iii) an authorization code stage; and (iv) a reproduction of information in a material object stage. A00031. Based on this analysis, the District Court concluded that: Following the language of claim 1, it would be impossible for an IMM to reproduce the information-embodying material object if the information to be reproduced was not already stored within the IMM because step four does not provide for the transmission from the ICM to the IMM of the information sought to be reproduced . . . . Alternatively, if it was intended for the patent to cover the real-time downloading of information, the patent could have defined the term “authorization code” such that it included the requested information as part of that code.[] Nowhere in the patent, however, is the term “authorization code” defined in this manner. [A00032-A00033]. This analysis, however, is incorrect for several reasons. Neither Claim 1 nor Claim 29 require that the “steps” described therein must be done in a particular order, nor do these claims exclude the possibility of various steps being combined. Indeed, the portion of the specification that immediately precedes the claims shows that the applicant did not intend that the steps described in the claims be read as having a rigid sequence: Changes may be made in the construction and operation of the various elements described herein or in the steps or the sequence of steps of the methods described herein without departing from the spirit and the scope of the invention as defined in the following claims. [A00090 at col. 28 lns. 16-20]. Furthermore, the District Court is incorrect in stating that nowhere in the Patent is the term “authorization code” defined as including the requested information. As quoted above, the specification specifically contemplates an embodiment in which: the information manufacturing machines . . . could only function to reproduce information in material objects in response to receiving an authorization code which would include the encoded information. [A00088 at col. 24 lns. 41-46 (emphasis added)]. For these reasons, the District Court’s conclusion that Claim 1 should be read as requiring a step-wise process that excludes real-time delivery of information is erroneous. IV. THE DISTRICT COURT ERRED IN READING SIX LIMITATIONS INTO THE CLAIM ELEMENT “MATERIAL OBJECT” A. The District Court Imposed Six Limitations On The Term “Material Object” The District Court held that a “material object” as used in all the claims of the Patent means: a tangible medium or device in which information can be embodied, fixed, or stored, other than temporarily, and from which the information embodied therein can be perceived, reproduced, used or otherwise communicated, either directly or with the aid of another machine or device, that: a. Must be offered for sale, and be purchasable, at point of sale locations where at least one IMM is located; b. Must be offered for sale independently from the information that may be reproduced onto the material object; c. Must be physically separate and distinct from the IMM located at a point of sale location; d. Upon reproduction of the selected information, is removed by the consumer from the IMM located at a point of sale location; and e. Is intended for use by the consumer of the material object at a location other than the point of sale location. [A00058 (emphasis added)]. Thus, the District Court found that a “material object”, as that term is used in the claims, must be used for something other than “temporary” storage, must be available for sale at the point of sale location independently from the desired information, and must be removed from the IMM and used by the consumer elsewhere. B. The Limitations Imposed By The District Court On The Term “Material Object” Do Not Appear In The Claims And Are Not Required By The Specification Neither Claim 1 nor the other independent claims contain any of the limitations listed above that the District Court has read into the meaning of the term “material object.” A00090 at col. 28 lns. 22-47. The term “material object” has a clear meaning as used in the claims, namely, a tangible medium or device capable of storing information and from which the information can be reproduced or otherwise used. Accordingly, no recourse to the specification is necessary for purposes of construing this term, and the District Court’s construction is legally incorrect for this reason alone. However, in the event that recourse to the specification is made, it becomes that much more evident that the District Court’s construction is erroneous. This is so for two essential reasons: (1) the specification defines and uses the term “material object” in broad terms and (2) the District Court’s construction rests improperly on particular embodiments or examples. The term “material object” is defined in the specification as: a medium or device in which information can be embodied or fixed and from which the information embodied therein can be perceived, reproduced, used or otherwise communicated, either directly or with the aid of another machine or device. [A00078 at col. 4 lns. 36-41.] The specification goes on to list, illustratively, various types of such material objects, including “floppy disks.” A00078. at col. 4 lns. 46-50. Again, there is no limitation here except that the material object be a tangible medium or device which can store information and from which information can be reproduced or used directly. [FOOTNOTE 8]The District Court’s extremely narrow reading of “material object” is contrary to, and refuted by, this broad definition. More particularly, the District Court’s limitation that the information be stored “other than temporarily” is unsupported and is contradicted by many of the examples of material objects cited in the specification which do not, or do not necessarily, store information permanently. For example, the following, each of which is listed in the specification as a material object, are often used to store information on a temporary basis: floppy disks, cassette tapes and reel-to-reel tapes. A00045. The other limitations that the District Court read into the term material object are essentially premised on the District Court’s erroneous finding, discussed above, that point of sale locations are not consumers’ homes, but rather are retail or wholesale outlets. In addition, the District Court also based certain limitations on particular examples or embodiments concerning retail outlets. It was based on these particular examples that the District Court concluded that material objects must be available for sale independently from the desired information, and must be removed by the consumer for use at another location. A00058. Thus, in support of this conclusion, the District Court stated: A material object must also be offered for sale at point of sale locations as an independent and stand-alone commodity. This requirement was touched upon previously when the Court noted that a point of sale location must be a location at which blank material objects are available for sale to consumers. [A00046]. However, as shown above, the District Court based this limitation not only on an embodiment were the point of sale location is a retail outlet, but on a narrow, particularized subset of that embodiment, namely, one where the consumer desires to pay cash to the owner of the point of sale location, rather than use a credit card. Reading such embodiments or examples into the claims as limitations, and a fortiori where the examples relied on are particularized subsets of a type of embodiment, is reversible error. Comark Communications, 156 F.3d at 1187. Similarly, once it is recognized that a point of sale location does not have to be a retail outlet, but can also be a consumer’s home, it is evident that the consumer need not use the material object at some site other than the point of sale location and that material objects need not be available for sale at all point of sale locations. Furthermore, the fact that many of the material objects exemplified in the specification are, as the District Court noted (A00046), removable from the IMM or from a device connected to the IMM does not require that they be taken from the point of sale location to some other location before being used by the consumer. The District Court’s finding that a material object must be “physically separate and distinct” from the IMM and cannot be a hard drive (A00046-A00048) is another limitation that does not appear in the claims and is not required by the specification. In reaching this conclusion, the District Court stated that it was “self-evident from the patent”, and that such must be the case because a hard drive “is not removable” and “would require the computer’s disassembly”, and because a material object must be “separate and distinct” from the IMM. A00047-A00048. To begin with, E-Data respectfully submits that this conclusion is not “self-evident” from the Patent; certainly, the claims contain no such limitation. Furthermore, the broad definition of “material object” provided in the specification (as quoted above) requires only a tangible medium or device capable of storing information and from which the information can be reproduced or otherwise used. A computer hard drive clearly falls within that definition. Indeed, that definition does not require that the material object be removable or necessarily distinct from the IMM. Thus, while the claims describe distinct functions for the IMM (which manufactures the information) and the material object (which stores or records the information), there is no requirement that the IMM and the material object be physically separate in order to perform distinct functions. [FOOTNOTE 9] In any event, the “removability” of a hard drive is dependent not on any language in the specification or restrictions in the claims, but on the state of the art of personal computer technology. Hard drives for personal computers have become increasingly easy to remove from computers, such that in “laptop” computers the task now may be achieved nearly as easily as removing a floppy disk. Moreover, the increasing use of high-capacity external removable drives is blurring the distinction between traditional floppy disks and hard drives. Given these facts, the unrestricted use of the term “material object” in the claims, the broad definition provided in the specification and the absence of any limitations imposed on this term during prosecution, E-Data respectfully submits that the term should be given its broadest reading and be held to encompass hard drives. * * * For all of these reasons, the District Court’s imposition of numerous limitations on the term “material object” based on particular examples or embodiments in the specification was in error; as used in the claims the term simply means a tangible medium or device capable of storing information and from which the information can be reproduced or otherwise used. V. THE DISTRICT COURT ERRED BY READING LIMITATIONS INTO THE CLAIM ELEMENT “AUTHORIZATION CODE” As to the claim element “authorization code,” the District Court found that the purpose of the authorization code is to “‘authorize’ reproduction of the information-embodying material object.” A00039. However, the District Court stated that “although [this] explains what the authorization code does, it does not explain precisely how it does it”. A00039. Relying on a particular embodiment, the District Court concluded that: “the authorization code is comprised of several other codes, including an IMM code, encoded catalog code, encoded catalog decipher program, and an encoded catalog authorization select code.” (citing col. 9, lns. 58-61). A00039. First, no such limitation appears in Claims 1 and 29. The pertinent portion of Claim 1 is representative in this regard; it states: providing an authorization code at the information manufacturing machine authorizing the reproduction of the information identified by the catalog code included in the request reproduction codes . . . . [A00090 at col. 28 lns. 37-40]. Thus, as used in the claims, the “authorization code” plainly and simply authorizes the reproduction of the particular desired information in a material object. [FOOTNOTE 10] Second, the embodiment on which the District Court relies in reading such limitations into the term “authorization code” involves a preferred embodiment relating to an IMM that includes a particular “manufacturing control unit” where the IMM is located at the retail outlet and the information has been stored in the IMM prior to the consumer’s request for it. The District Court states that the authorization code must enable the IMM to decode previously stored information and that this feature is the “seminal component of the authorization code.” A00040. With respect to the particular example in the specification on which these statements are based, these limitations generally relate to decoding the previously stored information and storing the “authorization select code” “for use in deciphering the next received” set of codes. A00081 at col. 9 ln. 48 to col. 10 ln. 39. Such limitations would not be necessary, and indeed would make no sense, where the embodiment is, for example, one in which a personal computer is the IMM, the consumer’s home is the point of sale location and there is real-time delivery of the desired information. In such an embodiment (which is embraced by Claims 1 and 29 for the reasons set forth above), the IMM “would not have any encoded information stored therein” but could reproduce information in material objects upon receiving an authorization code, which would include the desired information. A00088 at col. 24 lns. 43-46. As is the case with the other claim elements discussed herein, the District Court erred by reading particular embodiments into the claims as limitations (Comark Communications, 156 F.3d at 1187); and, given the lack of any such limitations being specified during prosecution, this term, as well, should be given its broadest scope and meaning. VI. THE DISTRICT COURT ERRED IN READING LIMITATIONS INTO THE CLAIM ELEMENT “INFORMATION MANUFACTURING MACHINE” In construing the term “IMM”, the District Court held that: [a]s the specification and Figure 1 of the Freeny patent indicate, the IMM is comprised of four separate and distinct components: ‘a master file unit, a manufacturing control unit, information manufacturing unit, and the reproduction unit.’ [A00048]. The District Court also read a number of limitations into each of these four listed components. A00058-A00059. Here again, these limitations do not appear in Claims 1 and 29; nor do the claims implicitly require these functions to be “separate and distinct” and embodied in an IMM. In Claim 1, for example, the IMM is simply required to be located remotely from the source of the information, to receive an authorization code, and to reproduce the information in a material object. Accordingly, the District Court’s construction is in error, because none of these limitations were imposed during prosecution and because the District Court read these limitations into the claims based on certain of the figures and preferred embodiments. VII. THE DISTRICT COURT ERRED IN CONSTRUING THE CLAIMS SO AS TO EXCLUDE CD-ROMS The District Court also erred in limiting the scope of the claims so as to exclude the encrypted CD-ROMs sold by defendant Waldenbooks. As noted by the District Court, Waldenbooks distributes or distributed certain CD-ROM products. A00053. The CD-ROMs contain certain programs which are encrypted, or “locked”, and which may be unlocked by a password key provided by Waldenbooks. A00053-A00054. Certain claims of the Patent read upon this process of distribution of the CD-ROM, unlocking of the programs, and incorporation of the information in material objects. However, by reading a number of limitations into the claims, the District Court excluded such a CD-ROM process. Claim 1 may read upon the sale of encrypted CD-ROMs. One example of how this may occur follows: APPENDIX OMITTED. The above table merely shows one example of how one of the independent claims of the Patent could read upon the sale of an encrypted CD-ROM containing software, text, photographs, or other information. Other examples might be devised which would be encompassed by Claim 1 or other claims. The District Court, however, imposed several limitations that do not appear in Claim 1. For example, relying on a preferred embodiment, the District Court first held that “as described in the Freeny patent, the reproduction code and authorization code are separate and distinct and serve different functions”, but only one code is required for the CD-ROM. A00055. However, there is no limitation in Claim 1 requiring that the reproduction code and authorization code be distinct. See A00090 at col. 28 lns. 23-47. Further, accused methods or devices may infringe under the doctrine of equivalents even though components or steps are combined in the accused device. See, e.g., Dolly, Inc. v. Spalding & Evenflo Companies, Inc., 16 F.3d 394, 398, 29 U.S.P.Q.2d 1767, 1769 (Fed.Cir. 1994). The District Court also found that the invention requires that an authorization code “be sent” from the ICM to the IMM, and that it be sent electronically. A00056. While Claim 1 does require that an authorization code be “provided” from a remote source, it does not require that the code be “sent”, or sent electronically. See A00090 at col. 28 lns. 23-47. The District Court erred by reading such limitations into the claims based on preferred embodiments. CONCLUSION AND STATEMENT OF RELIEF SOUGHT For all of the reasons stated above, E-Data requests that the Federal Circuit: (1) Vacate the District Court’s claim construction as set forth in the District Court’s Opinion & Order of May 13, 1998; (2) Adopt the claim construction proposed by E-Data in Part 1 of the Addendum; (3) Vacate the Stipulated Order and Judgment of dismissal of E-Data’s complaint alleging patent infringement, as entered March 12, 1999, since it was based on the District Court’s claim construction; (4) Remand the current matter to the District Court for further proceedings consistent with this Court’s decision herein; and (5) Provide such other and further relief as this Court deems proper. Dated: June 1, 1999 _______________________ GRAHAM & JAMES LLP Albert L. Jacobs, Jr. Daniel A. Ladow Philip M. Weiss David K. Bowles 885 Third Avenue, 21st Floor New York, NY 10022-4802 (212) 848-1000 Attorneys for Plaintiff-Appellant E-DATA, INC. ADDENDUM, PART 1 COMPARATIVE TABLE OF CLAIMS The Construction Of The Claims By The District Court In The May 1998 Order As Compared To E-Data’s Proposed ConstructionAPPENDIX OMITTED. ADDENDUM, PART 2 May 1998 Order (paginated identically to the Appendix) ADDENDUM, PART 3 The March 8, 1999 Stipulated Order and Judgment (paginated identically to the Appendix) ADDENDUM, PART 4 THE PATENT (paginated identically to the Appendix) [insert proof of service page] CERTIFICATE OF COMPLIANCE WITH FED.R.APP.P. 32 This certificate is included pursuant to Fed.R.App.P. 32(a)(7)(C). I, DANIEL A. LADOW, an attorney of record for E-DATA, the Plaintiff-Appellant, do hereby certify that the foregoing brief (including the Comparative Table of Claims, Addendum, Part 1) complies with the type-volume limitation as set forth in Fed.R.App.P. 32(a)(7). The total number of words in the foregoing brief is 11,722. _________________________ Daniel A. Ladow GRAHAM & JAMES, LLP ::::FOOTNOTES:::: FN1The only other reported opinion in this matter is Interactive Gift Exp., Inc. v. Compuserve Inc., 1996 WL 420193 (S.D.N.Y., July 25, 1996) (denying motion for default by defendant.) FN2The two other independent claims of the Patent (Claims 29 and 37), quoted at pp. 5-6 and 8-9 above) impose no further limitations on the meaning of the term “point of sale location” insofar as any particular location is concerned. FN3The concept of the home or office as the location of a point of sale is not new. Home shopping networks, pay-per-view cable television, and home Internet shopping all involve the home as a point of sale. See, e.g.., Independent Bankers Association of New York State, Inc., v. Marine Midland Bank, N.A., 757 F.2d 453, 460 (2d Cir. 1985) (the “wave of the future includes point-of-sale terminal systems (POS) and home computer banking . . . home banking by computer is already available”) cert. denied, 476 U.S. 1186 (1986); United States v. West, 56 F.3d 216, 218 (D.C. Cir. 1995) (defendant had a “point-of-sales terminal . . . installed in his home”, which was also an office). FN4This scenario contemplates that the consumer pays the owner of the point of sale location in cash for blank material objects while the owner of the point of sale location would charge the purchase of the information (from the owner of the information) on its own (the store owners, not the consumer’s) credit card. A00083 at col. 13, lns. 31-44. FN5Likewise, while dependent Claims 5, 6, 7, 9, 11, 12, 13, 16, 17, 18, 19, 20, 22, 31, 38, 40, 42, 44, 46, 47, 48, 51, 52 and 53 use the term “stored” or variations of the term; the other claims do not. FN6The District Court “limit[ed] its claim construction analysis to claim 1, but note[d] that its analysis is equally applicable to claims 29 and 37.” A00026. FN7Indeed, it is apparent that the only reason that real-time delivery of the information was not a preferred embodiment at the time of the filing of the application is that the then existing communication technology did not allow the rapid transmission of voluminous data that is afforded by present-day technology. A00088 at col. 24 lns. 8-58. FN8Thus, it is apparent, for example, that if information is downloaded to a personal computer and is then printed out on a sheet of paper, that sheet of paper embodying the information is a material object as that term is used in the claims. FN9Another example in the specification of distinct functions which are or can be physically merged is the merger of the authorization code and the requested information in a single body of digital information. A00088 at col. 24 lns. 33-46. FN10Furthermore, under the doctrine of claim differentiation, limitations which appear in certain of the dependent claims should not be read into independent Claims 1 and 29, and indeed highlight their absence from the latter: e.g., Claim 4 states that the “authorization code includes the IMM code” (A00091 at col. 29 lns. 15-23), and Claim 9 limits the authorization code to include “the determined catalog decipher program.” A00091 at col. 30 lns. 29-51.

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