       NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
              __________________________

                  PRIVACASH, INC.,
                   Plaintiff-Appellant,

                           v.
 AMERICAN EXPRESS COMPANY, AMERICAN
   EXPRESS TRAVEL RELATED SERVICES
  COMPANY, INC., AND AMERICAN EXPRESS
PREPAID CARD MANAGEMENT CORPORATION,
           Defendants-Appellees.
              __________________________

                      2011-1027
              __________________________

   Appeal from the United States District Court for the
Western District of Wisconsin in Case No. 09-CV-0391,
Magistrate Judge Stephen L. Crocker.
             ___________________________

               Decided: August 11, 2011
              ___________________________

     THOMAS A. LEWRY, Brooks Kushman P.C., of South-
field, Michigan, argued for plaintiff-appellant. With him
on the brief were JOHN M. HALAN and JOHN S. LEROY.
PRIVACASH   v. AMERICAN EXPRESS                           2


    PETER J. ARMENIO, Quinn, Emanuel, Urquhart & Sul-
livan, LLP, of New York, New York, argued for defedants-
appellees.    With him on the brief was JOHN C.
SPACCAROTELLA.
               __________________________

    Before LOURIE, BRYSON, and LINN, Circuit Judges.
BRYSON, Circuit Judge.

    Privacash, Inc., appeals from a decision of the United
States District Court for the Western District of Wiscon-
sin entering summary judgment that certain gift cards
sold by the American Express Company and its affiliates
do not infringe United States Patent No. 7,328,181 (“the
’181 patent”). The court held that the accused cards
lacked a “non-personalized cardholder name” and were
not “bearer instruments” as required by the asserted
claims. We conclude that the cards are not “bearer in-
struments,” and we therefore affirm. We do not address
whether the cards feature a “non-personalized cardholder
name.”

                             I

     The primary objective of the ’181 patent is to create
an anonymous and untraceable means for transacting
purchases over the internet. ’181 patent, col. 1, ll. 47-51.
The patent recognizes that most internet transactions
require a credit card, and therefore anonymous internet
purchases are almost impossible to make. Id. col. 1, ll. 19-
46. The patent’s solution to that problem is a prepaid
purchasing card similar to a prepaid phone card. Id. col.
2, l. 65. To enable purchases to be made anonymously,
the purchasing card is not personalized and is described
as being a “‘bearer card’ which means it is as good as
cash.” Id. col. 3, l. 59. A consumer can buy the purchas-
3                           PRIVACASH   v. AMERICAN EXPRESS


ing card using cash or a personal credit card, but the
“account number on the purchasing card . . . is not part of
the transaction, and thus is not linked to the consumer.”
Id. col. 3, ll. 56-58. After buying the card, the consumer
can activate the card by providing only the account num-
ber on the card. Id. col. 4, ll. 20-21.

    American Express distributes gift cards that can be
purchased in retail locations. The cards contain embossed
phrases such as “CELEBRATE,” “INDULGE,” or “A GIFT
FOR YOU” instead of the cardholder’s name. The gift
cards are inactive until someone purchases them. After
the card is purchased and activated, it can be used until
the value of the card is exhausted. If the card is reported
to American Express as lost or stolen, it will be deacti-
vated. In that event, the gift card can be replaced with a
new card that has a value equal to the remaining balance
on the card at the time it was reported lost or stolen. If
the card is not reported lost or stolen, it can be used by
anyone in possession of the card.

    Privacash filed suit against American Express assert-
ing that the American Express gift cards infringed the
’181 patent. Claim 1 was the only asserted independent
claim. That claim recites the following method:

    1. A method of transacting a purchase, compris-
    ing:

        distributing a plurality of unfunded purchase
    cards from a purchase card provider to a plurality
    of purchase card outlets, wherein each of the pur-
    chase cards is a bearer instrument having an as-
    sociated account number issued by a major
    branded credit card organization, an expiration
    date and a non-personalized cardholder name se-
PRIVACASH   v. AMERICAN EXPRESS                          4


   lected by the purchase card provider printed
   thereon, wherein the purchase card does not in-
   clude information identifying the specific perspec-
   tive cardholder, wherein information associated
   with each of the purchase card accounts is main-
   tained in a software implemented application op-
   erated by the purchase card provider;

       issuing a purchase card to a cardholder at the
   a purchase card outlet;

      contacting the purchase card provider to fund
   and activate the purchase card account of specific
   purchase card issued with a software imple-
   mented application or via the telephone; and

       transacting a cardholder purchase at any one
   of a number of retailers not associated with the
   purchase card outlet which accepts credit cards of
   the major branded credit card organization,
   wherein the cardholder presents the purchase
   card and the retailer contacts the purchase card
   provider over a network connection to interface
   with the software implemented application
   transmitting the purchase amount and the pur-
   chase card account number without requiring the
   retailer to collect and transmit personalized card-
   holder identifying information, to verify using the
   software implemented retail application that the
   purchase card is unexpired and that the purchase
   amount does not exceed the cardholder's funding
   limit, whereupon the purchase card account in-
   formation will be debited by the amount of the
   purchase and the account of the retailer will be
   electronically credited completing the purchase
   transaction.
5                            PRIVACASH   v. AMERICAN EXPRESS


    American Express moved for summary judgment of
noninfringement on various grounds, including that its
gift cards were not “bearer instruments” because they
could be canceled or deactivated. Privacash argued that
the proper construction of “bearer instrument” is a card
that “may be used up to the limit available on the card by
anyone in possession of it while the card’s account is
funded and activated.”

     The district court held that the proper construction of
“bearer instrument” excludes cards that can be canceled
or deactivated. The court observed that the bearer cards
in the patent were described as being as good as cash, and
that the primary objective of those cards was to facilitate
anonymous transactions. That objective would be com-
promised, the district court explained, if the purchaser
could cancel the card by identifying himself as the owner
of the card and requesting that it be canceled. The dis-
trict court further noted that the specification provided
that the cards claimed in the patent “may be used up to
the limit available on the card by anyone in possession of
the card,” ’181 patent, col. 3, ll. 61-62, and that possession
of the American Express gift cards did not enable such
use because those cards could be canceled at the owner’s
request.

    Privacash appealed to this court.

                              II

    We agree with the district court’s claim construction.
As the term is used in the patent, a “bearer instrument”
or “bearer card” 1 is “as good as cash” and “may be used up

    1  As Privacash acknowledges, the patent uses the
terms “bearer card” and “bearer instrument” inter-
changeably.
PRIVACASH   v. AMERICAN EXPRESS                               6


to the limit available on the card by anyone in possession
of the card.” ’181 patent, col. 3, ll. 56-64. The purpose of
that requirement is to ensure that the account number on
the bearer card “is not linked to the consumer” so that the
card “provides a means for preserving the anonymity of
the purchaser in future purchases.” Id. In order to
activate the bearer card, the consumer need only provide
the card account number to a purchasing intermediary
and “[n]o further information is requested of the con-
sumer.” Id. col. 4, ll. 18-21. After activation, the con-
sumer can make anonymous purchases with the bearer
card, as can anyone in possession of the card. Those
purchases, the patent explains, “should be ‘untraceable’
simulating a ‘cash’ transaction which typically occurs in a
typical ‘bricks and mortar’ retail setting.” Id. col. 1, ll. 49-
51.

    The patent’s use of the term “bearer instrument” is
consistent with the usual meaning given to “bearer bonds”
or “bearer securities” by financial dictionaries. Proof of
ownership for a “bearer security” is “possession of the
security certificate.” Oxford University Press, A Diction-
ary of Finance and Banking 42 (Jonathan Law ed., 4th ed.
2008). That feature “enables such bonds to be transferred
from one person to another without registration” and
allows owners to “preserve their anonymity.” Id. In the
case of “bearer bonds” or “coupon bonds,” possession
denotes ownership, “so whoever presents the coupon is
entitled to the interest.” John Downes & Jordan Elliot
Goodman, Dictionary of Finance and Investment Terms
58, 149 (7th ed. 2006).

    Based on the intrinsic and extrinsic evidence, we con-
clude that “bearer cards” are those that cannot be can-
celed or deactivated. If the lawful owner of a bearer card
can contact the issuing institution and deactivate the
7                            PRIVACASH   v. AMERICAN EXPRESS


card, then the card would cease to be a bearer card be-
cause it could not “be used up to the limit available on the
card by anyone in possession of the card.” ’181 patent,
col. 3, ll. 61-62. While legal title to a “bearer instrument”
may not always transfer with possession, the possessor of
a “bearer instrument” effectively owns the instrument due
to the lack of ownership registration. That characteristic
is vital to the primary advantage of the invention—
anonymity.

     Privacash argues that the bearer cards of its patent
can be deactivated “through expiration.” But there is a
critical difference between expiration and deactivation
prior to a previously designated expiration date. The
expiration date of the bearer card in the patent is set
when the card is activated, and card expiration will affect
lawful owners and unlawful possessors equally. By
contrast, deactivation allows lawful owners to nullify any
value the card has to a possessor and to retrieve the
remaining monetary value on the card. As such, simple
possession of an American Express gift card does not
constitute effective ownership of the card.

     Privacash argues that the same is true of a check
made out to bearer or cash because the Uniform Commer-
cial Code (“UCC”) states that customers have a right to
stop payment of “any item drawn on the customer’s
account.” U.C.C. § 4-403 (2002). Irrespective of any
special rights that a customer may have to stop payment
for items drawn on his account, a check that can be nulli-
fied is not a “bearer instrument” because the check cannot
“be used . . . by anyone in possession of the [check].” ’181
patent, col. 3, ll. 61-62. Indeed, nowhere in the UCC is
such a check described as a “bearer instrument.” More-
over, a personal check made out to cash does not achieve
PRIVACASH   v. AMERICAN EXPRESS                          8


the anonymity that is a principal purpose of the patented
invention.

    By contrast to a personal check made out to cash, a
cashier’s check payable to “cash” or “bearer” is a bearer
instrument. The UCC explains that a customer does not
have the right to stop payment on a cashier’s check that
has been debited from the customer’s account. U.C.C. § 4-
403 cmt. 4 (2002). That does not mean that the issuing
bank must pay the possessor of such a cashier’s check if
the bank “has a reasonable doubt whether the person
demanding payment is the person entitled to enforce the
instrument.” U.C.C. § 3-411(c)(iii). But absent evidence
creating a reasonable doubt as to title, possession of such
a cashier’s check would be proof of ownership.

     American Express proffered evidence demonstrating
that it is able to deactivate its gift cards in response to
requests from rightful card owners. Upon contacting
American Express, the owner is required to provide the
gift card account number and other identifying informa-
tion to establish that he is the card’s true owner. Priva-
cash has failed to submit any evidence indicating that
American Express is able to achieve that functionality
without compromising anonymity. Thus, the available
evidence indicates that American Express does not treat
possession of the gift card as proof of ownership. We
therefore conclude that the district court properly entered
summary judgment of noninfringement.

                       AFFIRMED
