Federal Circuit IP

AlexSam, Inc. v. Aetna, Inc.

By John Schmitz Published November 20, 2024

Case No. 22-2036, Precedential, (Fed. Cir. Oct. 8, 2024)

Lourie, Bryson, Stark

Facts/Background:

  • AlexSam sued Aetna for infringement of the ’608 patent. Alleged that Aetna marketed Mastercard and VISA products which infringed the ’608 relating to debit/credit card technology.
  • AlexSam and Mastercard had previously entered into a licensing agreement for that patent authorizing Mastercard to process, and enable others to process, “Licensed Transactions” which were defined as “each process of activating or adding value” to an account.
  • The district court granted Aetna’s motion to dismiss. The district court held that (1) Aetna had an express license via the licensing agreement to market the Mastercard products, and (2) AlexSam failed to plausibly allege infringement based on the VISA products.

Issue:  Did the Mastercard license amount to an express license for the Mastercard products?  Were the allegations regarding the VISA products conclusory?

Holding:  The scope of the license to Mastercard was narrower than the scope of the asserted patent claim.  The district court disagreed with the district court that the allegations in AlexSam’s complaint were conclusory.

Analysis: 

  • The license granted by the License Agreement extended only to transactions involving activation of, or adding value to, an account. AlexSam’s asserted patent claims were not limited to transactions involving activation or adding value.  Therefore, it was possible that transactions involving Aetna’s Mastercard products could fall within the scope of AlexSam’s patent claims yet remain outside the scope of the license.
  • Federal Circuit held for the first time that de novo review applies to a trial court’s determination whether an allegation in a patent-infringement claim is conclusory and need not be presumed to be true. Applying this standard of review to the VISA-related allegations, the Federal Circuit disagreed with the district court that the allegations in AlexSam’s complaint were conclusory and did not need to be taken as true.  Accordingly, the Federal Circuit vacated and remanded for further proceedings with regard to the VISA products.

Takeaways: 

  • Licensees: think through definitions; do not inadvertently give up scope through nested definitions (beware the crafty licensor)
  • Licensors: control drafting; try to limit scope of use
  • Both: read the fine print!