NetMoneyIN v. VeriSign: What Has Been the Impact?

In NetMoneyIN, Inc. v. VeriSign, Inc., 545 F.3d 1359 (Fed. Cir. 2008), the Federal Circuit addressed the question of what it means for a reference to anticipate a claim in a patent.  “Because the hallmark of anticipation is prior invention,” held the Court, “the prior art reference - in order to anticipate under 35 U.S.C. § 102 - must not only disclose all elements of the claim within the four corners of the document, but must also disclose those elements arranged as in the claim.”  NetMoneyIN. 545 F.3d at 1369.   At the time, the NetMoneyIn holding clearly appeared to raise the bar for a finding of anticipation, because most courts had focused only on whether all of the claim elements were taught in a single prior art reference.

On the other hand, NetMoneyIN did not necessarily make it more difficult to invalidate (or reject) patent claims because the Court specifically recognized that “differences between the prior art reference and a claimed invention, however slight, invoke the question of obviousness, not anticipation.”  Id., at 1371.  In other words, a reference reciting all of the claim elements, but not arranged “as in the claim,” could still render the claim obvious even though the reference would not anticipate the claim.  Thus, the NetMoneyIN opinion could be seen as being more about distinguishing anticipation from obviousness than about raising the bar on anticipation. 

What has been the impact of the NetMoneyIN decision?

Over the last year and a half, at least fifteen district court opinions have cited to the standard for anticipation set forth in NetMoneyIN, without further discussion.  Only three district courts have discussed the anticipation standard articulated in NetMoneyIN.  See Johnson & Johnson Vision Care, Inc. v. CIBA Vision Corp., 634 F. Supp.2d 1293, 1310 (M.D.Fla. 2008); Hypertherm, Inc. v. American Torch Tip Co., 2008 WL 5423835, *4 (D.N.H. 2008); Advanced Technology Incubator, Inc. v. Sharp Corp., 2009 WL 4723734, *3 (E.D.Tex. 2009).  Of these, only one court specifically cited NetMoneyIn as having heightened the standard for anticipation, noting: “In addition, reliance on a drawing would appear to be more difficult in light of the requirement that to be anticipatory, the prior art reference must disclose all elements of the claim arranged as in the claim.”  Hypertherm, 2008 WL at *4.  As expected, these cases reflect widespread acceptance of NetMoneyIN’s heightened standard for a finding of anticipation.

Under the circumstances, one might also expect to see cases where a court finds that a claim is not anticipated by a reference, but is nevertheless “obvious” in light of that same single reference.  In fact, there do not appear to be any cases since NetMoneyIN in which claims were held not anticipated, but obvious, under the same single reference. 

Thus, the NetMoneyIN decision has favored patent holders by articulating a heightened standard for anticipation.  Even so, those seeking to invalidate patents should continue to look for opportunities to argue that a single reference invalidates a claim as obvious, even if that same reference does not satisfy the NetMoneyIN standard for anticipation.