The cases concern the E-Pass smart card, which was conceived over ten years ago when, according to the company web site:
"the inventor of E-Pass, Hartmut Hennige, found himself standing in the Zurich airport with a handful of credit and prepaid cards, none of which was suitable to use in a public telephone. He realised that a future generation of smart cards could be created which would allow multiple issuers to be represented on a single operating multi-functional smart card."
The E-Pass was born, and a patent granted in 1994.
On 28th February 2000, E-Pass lodged a court action against 3Com, the then owners of PDA maker Palm, alleging that the company's Palm Pilots infringed on its patent. 3Com denied the allegations and E-Pass went on to lodge similar actions against Microsoft and Compaq.
In December 2001 the district court issued an order setting out its interpretation of the description contained in the patent - in particular, the meaning of the phrase "electronic multi-function card".
The district court said that this description meant a card the same shape and size as a credit card. The court then ruled that, as the Palm Pilots were bigger and thicker than a credit card, there had been no patent infringement. E-Pass appealed.
The Court of Appeals issued an opinion last Wednesday reversing the district court opinion. The court said, "the ordinary meaning of the word 'card' here, as used in the phrase 'electronic multi-function card,' is the proper construction".
The court added, "We note that under the correct construction of 'card' in this context - a flat rectangular piece of stiff material - it may be or may not be that the accused Palm Pilot devices literally infringe."
Accordingly the case has now been sent back to the district court to determine whether the devices do actually infringe the E-Pass patent.
In a statement E-Pass confirmed that the Microsoft and Compaq litigations, which had been on hold until the appeal had been decided, are likely to resume within the next four to six weeks.
The company added:
"E-pass is currently undergoing a thorough evaluation of all products and processes that might be covered by its patent, now that the patent has been vindicated by the Federal Circuit in Washington. It is expected that E-pass will be filing additional patent infringement actions in the not-too-distant future."