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GAJARSA, Circuit Judge.

This is a patent infringement case. Thomson Corporation and I-Deal, LLC (collectively “Thomson”) appeal from a final judgment, after a jury trial, that the asserted claims of U.S. Patent No. 6,161,099 (“the ’099 patent”) are not obvious, that Thomson willfully infringed the asserted claims of the ’099 patent, that Muniauction, Inc. is entitled to approximately $77 million for lost profits damages enhanced for Thomson’s willful infringement, and that Thomson is permanently enjoined from continued infringement of the ’099 patent. Muniauction, Inc. v. Thomson Corp., 502 F. Supp. 2d 477 (W.D. Pa. 2007). Because claims 1, 9, 14, 31, 36, and 56 of the ’099 patent are obvious as a matter of law, the judgment of nonobviousness is reversed as to these claims.
Similarly, because Thomson does not infringe the remaining asserted claims as a matter of law, the judgment of infringement is reversed, and the remainder of the final judgment is vacated.


The ’099 patent is directed to electronic methods for conducting “original issuer auctions of financial instruments.” ’099 patent col.2 ll.49–50. Specifically, the ’099 patent is directed to original issuer municipal bond auctions over an electronic network, e.g., the Internet, using a web browser. Id. at col.1 ll.13–15. In this type of auction, the municipality (“issuer”) offers its bonds to underwriters (“bidders”), who typically bid on and purchase the entire bond offering, i.e., all-or-none bidding, and thereafter resell individual bonds to the public. Id. at col.6 ll.11–13. A bond offering may be a package of debt instruments consisting of bonds having different principle amounts and having different maturity dates. Id. at col.6 ll.19–22. A bidder submits a price and a related interest rate represented by a coupon for each of the bonds differentiated by a respective maturity date. Accordingly, the best bid is determined according to the true interest cost (“TIC”) to the issuer based on the blended rates for each package of the aggregated submissions made by the bidder. Id. at col.6 ll.20–26, col.9 ll.4–55. In addition to all-or-none bidding, the ’099 patent discloses maturity-by-maturity bidding by which a bidder may bid on less than the entire debt offering. Id. at col.5 ll.23–65, col.13 ll.31–33.

The ’099 patent discusses many prior art electronic auction and trading systems, yet criticizes those systems as inapplicable to original issuer auctions of financial instruments. Id. at col.2 ll.49–60. The ’099 patent also discusses the Parity® electronic bid submission system, developed by 21st Century Municipals, Inc. for use in municipal bond auctions. “The PARITY bid submission system allows bidders who have previously obtained and installed appropriate software to electronically submit bids in an auction over a computer network.” Id. at col.3 ll.4–7.

The ’099 patent criticizes the Parity® system for three reasons. First, the prior art system requires bidders to obtain and install the Parity® software prior to participating in an auction over the computer network; second, the system “is designed to be used together with fax and other bid submission methods during an auction”; and third, the system operates as a sealed bid system in which the received bids are not evaluated and no feedback is provided to the bidders until the auction closes. Id. at col.3 ll.4–12.

Accordingly, the invention of the ’099 patent provides an “integrated system on a single server” that allows issuers to run the auction and bidders to prepare and submit bids using a conventional web browser, without the use of other separate software. Id. at col.5 ll.13–28. The system of the ’099 patent also allows issuers to monitor the progress of the auction and allows bidders to monitor their bid vis-à-vis the current best bid. Id. at col.12 l.60 to col.13 l.60. Claim 1 states:

In an electronic auction system including an issuer’s computer having a display and at least one bidder’s computer having an input device and a display, said bidder’s computer being located remotely from said issuer’s computer, said computers being coupled to at least one electronic network for communicating data messages between said computers, an electronic auctioning process for auctioning fixed income financial instruments comprising:

inputting data associated with at least one bid for at least one fixed income financial instrument into said bidder’s computer via said input device;

automatically computing at least one interest cost value based at least in part on said inputted data, said automatically computed interest cost value specifying a rate representing borrowing cost associated with said at least one fixed income financial instrument;

submitting said bid by transmitting at least some of said inputted data from said bidder’s computer over said at least one electronic network; and

communicating at least one message associated with said submitted bid to said issuer’s computer over said at least one electronic network and displaying, on said issuer’s computer display, information associated with said bid including said computed interest cost value,

wherein at least one of the inputting step, the automatically computing step, the submitting step, the communicating step and the displaying step is performed using a web browser. Next Page ->

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