E-Pass allowed to re-open Microsoft, HP patent lawsuits

Sueing Visa, too

By Tony Smith, 12th November 2003

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Intellectual property company E-Pass has been allowed to re-commence its litigation against Microsoft and HP.

The company began legal action against the software giant and Compaq early last year. E-Pass claimed that both companies infringe a patent it administers, number 5,276,311 which describes "a multifunction, credit card-sized computer that allows users to securely store a multitude of account numbers, PIN codes, access information and other data from multiple credit cards, check cards, identification cards and similar personal documents".

E-Pass claims that Windows Mobile-based Pocket PCs are in violation of its patent as they can deliver those functions.

Having already sued Palm - or, rather, Palm's erstwhile owner, 3Com - for the same alleged infringement, the MS-Compaq case was put on hold pending the outcome of the earlier case. Initially, Palm won the day, but in August E-Pass prevailed in its appeal against the judgement.

Palm won the case when the presiding judge, Judge D Lowell Jensen, ruled that its handhelds could not be called 'credit card-sized' and thus were not in violation of a patent that specified such a form-factor. However, the appeal judge, Judge Dyk, essentially ruled that his colleague had made an error of law in hinging his decision on the precise nature of the form factor, and sent the case back to the Federal Court to be reappraised.

That re-opened the Palm/3Com case, and now, by extension, E-Pass has been allowed to re-open the MS-HP/Compaq fight.

In the Palm action, the PDA company has to once again show that its device does not infringe E-Pass' patent. The appeals court ruling will make this more difficult because it eliminated Palm's main argument - that its devices and the one described in the patent are of differing form factors.

But, conversely, it makes it much easier for Palm to show Prior Art and thus request for the patent to be invalidated, IP attorney John Ferrell of San Diego-based law firm Carr Ferrell told The Register recently. By dismissing the form factor argument, the appeals court allows the patent to be compared to a wide range of mobile devices, many of which were available before the patent was filed, in 1994. Ferrell believes the case could go either way.

Now, however, Microsoft and HP will be watching the outcome with particular interest.

So will Visa, the credit-card giant, which has now been sued too, for allegedly infringing the same patent. E-Pass claims Visa met the company in 2000. After the meeting, it never heard from Visa again, until it spotted Visa's then VP for Product Development, Susan Gordon-Lathrop, appear with then Palm CEO Carl Yankowski to demo a Palm storing secure credit card details. ®