Microsoft and Compaq had asked the court to dismiss the case, arguing that the feature being patented – an electronic multi-function card – was already in the public domain at the time of the patent application.
The case is part of a series of actions taken over the E-Pass smart card and its US patent, number 5,276,311, which describes a "method and device for simplifying the use of a plurality of credit cards, or the like" – allowing such things as credit cards, ID cards, customer cards, photos, keys and access information to be stored on one electronic device.
The matter first came to court in February 2000, when E-Pass sued 3Com, the then owners of PDA-maker Palm, alleging that the company's Palm Pilots infringed its patent.
3Com denied the allegations and E-Pass went on to lodge similar actions against Microsoft and Compaq in respect of their Pocket PC operating system and iPAQ respectively. In November last year, E-Pass then sued Visa International and Visa USA.
The Microsoft and Compaq cases were put on hold pending an appeal in the Palm case over the interpretation of the description contained in the patent. In August 2003 the Appeal Court ruled against Palm, and sent the case back to the lower court for a decision as to whether Palm Pilots actually infringe the patent.
E-Pass resumed the actions against Microsoft and Compaq late last year, and won a small victory in March when Judge Kenneth Hoyt ruled that all but one of the patent definitions put forward by E-Pass would be used by the court when the case comes to trial, rejecting Microsoft's arguments that the word "card" implied particular sizes, and that Pocket PCs don't come in those sizes.
Judge Hoyt again sided with E-Pass last week when he dismissed arguments by Microsoft and Compaq that Visa's patent number 4,701,601 had preceded the E-Pass patent.
The '601 patent covers a "transaction card with magnetic stripe emulator" – basically an electronic device that can hold the details of more than one credit cards, and uses a magnetic strip to interact with existing terminals.
The card itself – Visa's SuperSmart card – and a manual designed to accompany the card were also given as examples of prior art.
While the Judge accepted that the '601 patent preceded the E-Pass patent in time, he found that it "only contemplates storing and displaying data with respect to one type of card; namely, transaction cards. However, the ' 311 patent encompasses storing and displaying data from numerous data sources."
Accordingly the '601 patent, the card and manual did not anticipate the E-Pass patent, which remains valid, said the Judge.
The case will now proceed to trial on 7th March 2005.