Amazon.com, Inc. v. Barnesandnoble.com

Amazon.com v. Barnesandnoble.com, Inc., No. C99-1695P.

United States District Court, W.D. Washington.

December 1, 1999

This is a patent infringement suit brought by Amazon.com, Inc. against barnesandnoble.com. The patent in question is United States Patent No. 5,960,411 (the ‘411 patent), which was issued on September 28, 1999.

The ‘411 patent describes a Method and System for Placing a Purchase Order via a Communications Network and includes 26 claims. The ‘411 patent, in essence, describes a method and system in which a consumer can complete a purchase order for an item via the Internet using only a single action (such as a single click of a computer mouse button) once information identifying the item is displayed to the consumer.

Amazon.com alleges that the Defendants’ “Express Lane” ordering feature infringes various claims of the ‘411 patent. Concurrently with its complaint, Amazon.com filed a motion for a preliminary injunction to enjoin Barnesandnoble.com from infringing the ‘411 patent.

Defendants raised a number of defenses in their pleadings and during the hearing:

  • Defendants placed particular emphasis on arguments that the ‘411 patent is invalid on obviousness and anticipation grounds and that the Express Lane feature does not infringe any claims in the ‘411 patent.
  • The Defendants also suggested that the ‘411 patent is unenforceable.
  • Defendants argued that Amazon.com could not demonstrate irreparable harm, that the balance of hardships did not tip in Amazon.com’s favor, and that the public interest would not be served by the issuance of a preliminary injunction.

 

Case Facts

  • Plaintiff Amazon.com, Inc. (“Amazon.com”) is a Delaware corporation with its principal place of business at Seattle, Washington. Through its website, www.amazon.com, the company enables customers to find and purchase books, music, videos, consumer electronics, games, toys, gifts, electronic greeting cards, and other items online.
  • Defendant Barnesandnoble.com LLC is a Delaware limited liability company with its principal place of business at New York, New York. Barnesandnoble.com LLC operates a website through which it distributes books, software, music, and other items.
  • Defendant Barnesandnoble.com Inc. is a Delaware corporation with its principal place of business in New York, New York. Barnesandnoble.com Inc. is a holding company whose sole asset is a 20% share in Barnesandnoble.com LLC, and whose business is acting as the sole manager of Barnesandnoble.com LLC.
  • Com Inc. controls all major business decisions of Barnesandnoble.com LLC. Collectively, these two defendants are referred to herein as “Barnesandnoble.com.”

 

Timeline of Events

Sometime before May 1997, Amazon.com CEO Jeffrey Bezos conceived an idea to enable Amazon.com customers to purchase items with a single-click of a computer mouse button. This idea was commercially implemented by Amazon.com in September of 1997.

On September 28, 1999, United States Patent No. 5,960,411 (the “‘411 patent”), entitled “Method and System for Placing a Purchase Order via a Communications Network,” was issued. The patent was assigned to and is owned by Amazon.com.

 

Case Details and Arguments

Barnesandnoble.com offers customers two purchasing options. One is called Shopping Cart and the other is called Express Lane. The two methods are separate and cannot be combined (Express Lane and the Shopping Cart are two different ways to place your order. You can’t combine them). The Barnesandnoble.com Shopping Cart option includes the steps of a standard shopping cart model, including adding items to a virtual shopping cart and “checking out” to complete the purchase.

Throughout its web site, Barnesandnoble.com consistently describes Express Lane as a one-click ordering method:

  • In its May 1999 prospectus, Barnesandnoble.com consistently described Express Lane as making one-click ordering possible.
  • In its November 1999 10-Q Report to shareholders, Barnesandnoble.com describes Express Lane as a one-click ordering system.

It does not appear that Barnesandnoble.com has ever described the Express Lane ordering process as requiring more than one action, other than in the course of this litigation.

The strong similarities between the Amazon.com 1-click feature and the Express Lane feature subsequently adopted by Barnesandnoble.com suggest that Barnesandnoble.com copied Amazon.com’s feature.

Barnesandnoble.com presented evidence that a number of other e-commerce retailers have offered single-action ordering to customers.

The invention described in the ‘411 patent is of significant commercial value, as evidenced by the large number of customers who make use of single-action ordering available on the websites of both Amazon.com and Barnesandnoble.com.

The harm Amazon.com would suffer if denied the benefit of using its invention to distinguish itself from its competitor Barnesandnoble.com could not easily be measured in dollars.

Amazon.com would not be able to distinguish itself from a key competitor by offering single-action ordering and would likely lose market share and customers to Barnesandnoble.com. The Court finds that this loss would not be easily compensable in damages. Exclusive rights to the patented invention are important to Amazon.com’s ability to differentiate the customer experience available at its site from that of competitor sites such as Barnesandnoble.com.

 

Summary

In their initial opposition to Plaintiff’s motion for a preliminary injunction, Defendants argued that the ‘411 patent was unenforceable due to alleged inequitable conduct on the part of the one of the inventors, Shel Kaphan. The Court finds that Defendants’ arguments regarding unenforceability lack substantial merit.

Defendants have also argued that Plaintiff has not demonstrated that the “Express Lane” feature infringes any claims of the ‘411 patent.

Analysis of patent infringement involves two steps:

(1) A claim construction to determine what the claims cover, i.e., their scope, followed by

(2) Determination of whether the properly construed claims encompass the accused structure.”

The former is a question of law; the latter is a question of fact. The parties were in disagreement of the definition of terms involved. The Court adopts instead a definition which is consistent with the patent specification, preserves the validity of the claims, and allows the claims to be read on the preferred embodiment described in the patent specification.

In construing the claims, the Court, therefore, takes the term “shopping cart model” to mean a method for on-line ordering in which a user selects and accumulates items to be purchased while browsing a merchant’s site and then must proceed to one or more checkout or confirmation steps in order to complete the purchase.

 

BARNESANDNOBLE.COM INFRINGES ‘411 PATENT

Because the Court adopts the patent specification’s description of the term “shopping cart model,” the Court finds that Barnesandnoble.com infringes ‘411 patent claims, 1, 2, 3, 5, 11, 12, 14, 15, 16, 17, 21, 22, 23, 24.

The Court has also found that the terms “fulfill” and “order fulfillment component” in claims 6 and 9 do not include the retailer’s acts of physically locating, packaging, and shipping a tangible item after a purchase order is completed. The Court, therefore finds that Barnesandnoble.com also infringes claims 6-10 of the ‘411 patent.

 

CONCLUSION

  • The Court finds that Plaintiff has demonstrated a reasonable likelihood of success on the merits at trial.
  • The Court finds that Plaintiff has made a strong showing that the ‘411 patent is valid and that Defendants’ Express Lane feature infringes the patent. Plaintiff is therefore entitled to a presumption of irreparable harm.

Therefore, the Court hereby ORDERS that Defendants Barnesandnoble.com LLC and Barnesandnoble.com Inc., their offers, agents, servants, employees and attorneys and those in active concert or participation with them or Defendants ARE HEREBY RESTRAINED AND ENJOINED from continuing to infringe United States Patent No. 5,960,411, including by continuing to make or use within the United States Defendants’ Express Lane feature as currently configured or any other single-action ordering system that employs the methods or systems of the ‘411 patent, or by inducing others to make or use within the United States Defendants’ Express Lane feature as currently configured or any other single-action ordering system that employs the methods of systems of the ‘411 patent. Defendants may continue to offer an Express Lane feature if the feature is modified to avoid infringement of the ‘411 patent in a manner that is consistent with the findings of fact and conclusions of law set forth above.

 

Amazon.com, Inc. v. Barnesandnoble.com

Amazon.com v. Barnesandnoble.com, Inc. and Barnesandnoble.com LLC

United States Court of Appeals

February 14th, 2001

After careful review of the district court’s opinion, the record, and the arguments set forth by the parties, the Court of Appeals concludes that Barnes and Noble have maintained a legitimate challenge to the validity of the patent in question.

 

Arguments

The ‘411 patent has 26 claims, 4 of which are independent. Independent claims 1 and 11 are method claims directed to placing an order for an item, while independent claim 6 is an apparatus claim directed to a client system for ordering an item, and independent claim 9 is an apparatus claim directed to a server system for generating an order.

Amazon asserted claims 1-3, 5-12, 14-17, and 21-24 against BN. Although there are significant differences among the various independent and dependent claims in issue, for purposes of this appeal we may initially direct our primary focus on the “single action” limitation that is included in each claim. This focus is appropriate because Barnes and Noble, Inc. appeals attack the injunction on the grounds that either its accused method does not infringe the “single action” limitation present in all of the claims, that the “single action” feature of the patent is invalid, or both.

 

Summary and Conclusion

Amazon is not entitled to preliminary injunctive relief under these circumstances. The Court of Appeals vacates the order of the district court that set the preliminary injunction in place. As a result, they remanded the case for further proceedings.

On April 7, 2016   /   Law Library