Cases & Deals

Visa summary judgment win affirmed on appeal

Clients Visa Inc.; Visa USA Inc.; and Visa International Service

On behalf of Visa Inc., Jones Day successfully argued an appeal before the United States Court of Appeals for the Federal Circuit, which affirmed a grant of summary judgment from the U.S. District Court for the Central District of California that Visa does not infringe the patent claims asserted by SmartMetric, Inc. Plaintiff had sought $13.9 billion in damages from both defendants. This is the second time Jones Day successfully argued to the Federal Circuit Court of Appeals that claims asserted by SmartMetric against Visa should be dismissed. In the first case, the Federal Circuit affirmed judgment in favor of Visa that transactions originating from contactless payment cards do not infringe U.S. Patent No. 6,792,464.

In the recent case, SmartMetric alleged that Visa was infringing upon the claims of U.S. Patent No. 6,792,464 directed to facilitating network access for a user who is traveling by enabling the selection of local numbers to access a network access provider. SmartMetric claimed that payments using Visa-branded contact chip cards in the United States infringed the claims of the 464 patent. As part of its litigation strategy, Jones Day sought an early claim construction hearing in the District Court and received constructions that highlighted the importance of the user’s geographic location in the claims of the '464 patent. Jones Day then sought summary judgment of non-infringement on the grounds that the geographic location of the cardholder initiating a Visa-branded payment transaction in the United States is not a factor in determining the routing of the authorization request for that transaction. Jones Day also sought summary judgment on additional grounds including that SmartMetric’s infringement theory required certain elements of the claims be performed by persons other than Visa and that Visa could not be held responsible for those actions.

Following a hearing where Jones Day again presented the non-infringement positions of Visa and argued that the declarations proffered by SmartMetric were too speculative and conclusory to create a genuine issue of fact, the District Court granted Visa summary judgment of non-infringement (and denied SmartMetric’s request for summary judgment that the '464 patent was valid and infringed). The Court adopted Jones Day’s non-infringement theories and agreed that the proffered SmartMetric declarations did not create a triable issue of fact that would preclude summary judgment in favor of Visa.

SmartMetric appealed both the claim construction ruling and the summary judgment. Only five days after oral argument, the Federal Circuit summarily affirmed the District Court’s grant of summary judgment in favor of Visa.

The Jones Day team was led by Joseph Melnik from the Firm’s Silicon Valley office, assisted by Jason McDonell, An Doan, and Matthew Silveira.

SmartMetric, Inc. v. MasterCard International Incorporated, and Visa Inc., Appeal No. 2014-1037 (Fed. Cir.)

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