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A panel of the U.S. Court of Appeals for the Federal Circuit reconsidered its November opinion vacating judgment for tech companies sued over a 1985 point-of-sale method patent, but reiterated that a lower court misinterpreted certain patent claims and should reconsider its judgment of non-infringement. Interactive Gift Express v. Compuserve Inc., No. 099-1324, Fed. Cir. Interactive Gift Express (now E-Data) brought an action against Compuserve, Broderbund Software, Intuit and other online retailers, complaining that their method of allowing consumers to download products violated U.S. Patent No. 4,528,643 (the “Freeny patent”). The Freeny patent is for a method of producing software, books and other products at retail locations to assist manufacturers in weighing demand against supply. Consumers could order a product, the retail location would communicate with the manufacturer and then load the material directly to a CD-ROM, tape, or other blank material at the retail site. In 1999, Judge Barbara S. Jones of the Southern District of New York concluded that online sellers methods of fulfilling consumers’ requests by allowing direct download to personal computers did not infringe the Freeny patent. E-Data appealed and on Nov. 3 a Federal Circuit panel vacated Judge Jones’ decision and ordered the district court to reconsider, using the panel’s interpretation of patent claims. Defendants-appellees asked for reconsideration, arguing that E-Data improperly raised new issues on appeal regarding “point of sale location,” “material object” and “real time delivery.” The panel concluded, however, that E-Data was not foreclosed from offering arguments that were not inconsistent with their binding claims constructions. CLAIM CONSTRUCTION In its July 13 ruling, the panel reiterated that, on reconsideration, the district court should use these claim constructions: A point of sale location is where a consumer goes to purchase material objects embodying predetermined or preselected information. This construction permits a home to be a point of sale location. The location need not have more than one blank material object and it need not have any material objects separately for sale as blanks. A material object is 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. It must be offered for sale, and be purchasable, at point of sale locations where at least one “information manufacturing machine” is located. A material object must be separate and distinct from the IMM, removed from the IMM after purchase, and intended for use on a device separate from the IMM either at the point of sale location or elsewhere. “Material object” does not encompass the hard disk component of a home personal computer. A material object need not be offered for sale independently from the information that may be reproduced onto the material object, that is, as a blank. An information manufacturing machine must contain one or more components for performing at least the functions of: storing information to be reproduced; receiving a request reproduction code; transmitting a request reproduction code to a remote device; receiving an authorization code from the remote device; and reproducing the requested information in a material object in response to receiving the authorization code. An IMM need not contain the four separate and distinct components of the preferred embodiment. An authorization code must authorize copying but need not provide decoding information. The term “authorization code” is not to be construed to require that it include an IMM code or that it be transmitted electronically. An authorization code is separate and distinct from a request reproduction code. The claim for real-time transactions is not limited to embodiments that pre-store or pre-deliver the information to the IMM; it covers real-time transactions in which the requested item of information is transmitted to the IMM at or prior to the time it is requested by the consumer. Counsel for E-Data: Albert L. Jacobs Jr. of Graham & James in New York. Counsel for Internet Shopping Network: Walter E. Hanley Jr. of Kenyon & Kenyon of New York. Counsel for Softlock Services: Carl Oppedahl of Oppedahl & Larson of Dillon, Colo. Counsel for CompuServe: Timothy J. O’Hearn of Jones, Day, Reavis, & Pogue in Cleveland. Counsel for Waldenbooks: Robert Thomas Maldonado of Cooper & Dunham in New York. Counsel for The Library Corp.: George F. Pappas and James R. Burdett of Venable Baetjer Howard & Civiletti of Washington, D.C. Counsel for Broderbund Software and Intuit: Claude M. Stern of Fenwick & West in Palo Alto, Calif. Counsel for Ziff-Davis Publishing: Catherine M. McGrath of Brown Raysman in New York. Counsel for CDNow: Griffith G. deNoyelles Jr. of Chernofsky & deNoyelles in New York.

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