AMEX Gift Cards Not Infringing

Privacash, Inc. v. Am. Express Co., No. 2011-1027 (Aug. 11, 2011) [PDF].

Privacash sued AMEX alleging that AMEX gift cards infringed U.S. Patent 7,328,181. The ‘181 provides a system with the objective of providing an anonymous and untraceable means for transacting purchases over the internet.

AMEX cards are activated when purchased and a usable until the value of the card is exhausted. AMEX will deactivate a card if it is reported lost or stolen. If reported stolen, a replacement gift card will be issued with the value remaining on the deactivated card.

Claim 1 of the ‘181 patent provides :

1. A method of transacting a purchase, comprising:

distributing a plurality of unfunded purchase cards from a purchase card provider to a plurality of purchase card outlets, wherein each of the purchase cards is a bearer instrument having an associated account number issued by a major branded credit card organization, an expiration date and a non-personalized cardholder name selected by the purchase card provider printed thereon, wherein the purchase card does not include information identifying the specific perspective cardholder, wherein information associated with each of the purchase card accounts is maintained in a software implemented application operated 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 implemented 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 purchase 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 information will be debited by the amount of the purchase and the account of the retailer will be electronically credited completing the purchase transaction.

A cancelable card is not a bearer instrument. The Federal Circuit  agreed with the district court that the AMEX card was not a bearer instrument or bearer card because it was capable of being cancelled or deactivated. Therefore the AMEX card was not  “as good as cash” and may not be  “used up to the limit available on the card by anyone in possession of the card” as provided in the ‘181 patent description.

The court noted that the purpose of the card in the ‘181 patent was to ensure anonymity of a purchase. However because the AMEX card allowed the true owner of the AMEX card to deactivate the card and get a replacement for the value remaining, the AMEX card did not provide anonymity, which was the purpose of the system of the ‘181 patent.

Claims on Manipulating Tools on Toolbar are Obvious

Odom v. Microsoft, 2011-1160 (Fed. Cir. May 4, 2011) [PDF].

Inventor Odom sued Microsoft alleging that Microsoft infringed Odom’s U.S. Patent 7,363,592 directed to a method for manipulating groups of tools in toolbars in a computer software application. The district court found certain claims the of ‘592 patent invalid as obvious in view of U.S. Patent 6,057,836, stating that Odom had simply “cobbled together various pieces of what was already out there in a manner . . . that would have been obvious to anyone skilled in the art at the time of the invention.”  On appeal the Federal Circuit affirmed.

Claim 8 is a representative claim of the ‘592 patent:

8. A computer-implemented method comprising:

displaying a toolbar comprising at least one first tool group,

wherein said first tool group comprises at least one user-selectable tool,

wherein visibly designating said first tool group by at least one user-manipulatable divider located near at least one end of said first tool group,

wherein said first tool group divider is visually distinct from a said tool and from any visible means for directly manipulating said toolbar in its entirety, and

wherein said tool group divider is user-manipulatable for altering the condition of said tool group;

selecting said first tool group;

interactively tracking user indication of move-ment related to said first tool group until receiv-ing user indication to cease tracking; and

altering the condition of at least one tool group on said toolbar based upon said tracked user indica-tions.

Prior Art. The prior art ‘836 patent discloses “customizing a composite toolbar via direct on-screen manipulation by resizing the composite toolbar and by rearranging sections within a composite toolbar.” The ‘836 patent discloses toolbars that include “groups of command buttons. ” The toolbars can be modified by adding or deleting buttons or customizing buttons according to user preferences. The prior art patent further teaches that a toolbar can be collapsed or expended to allow the user to view as many or as few buttons as the user desires.

Manipulation on a Single Toolbar is Not New. The Federal Circuit found that the concepts claimed in the ‘592 patent were the same as those the ‘836 patent except that in the ‘529 patent the groups of tools were on a single toolbar. The court found that this was an insignificant advance over the  prior art ‘836 patent. The court noted that the prior art ‘826 patent explained, in the words of the court, “that although its invention has been described in the context of a web browser, employing collections of buttons and toolbars that are relevant to that application, a person of skill in the art would appreciate that the invention can be adopted to other application where a different arrangement or combination of tools may be desired.” Further the court found that it was only a trivial change for a person skilled in the art to add an indicator that could indicate any altered condition of the tool group, as was claimed in the ‘592 patent.

Positive for Comp.Sci. & Business Methods Pats: Federal Circuit Takes Broad Approach to Patentable Subject Matter

Classen Immunotherapies, Inc. v. BioGen IDEC, No. 2006-1634 (Fed Cir. Aug 31, 2011) [PDF].

In this case the court considered the scope of patentable subject matter under 35 USC 101. While the patents-in-suit are directed toward methods of medical treatment, the scope of patent able subject matter under section 101 is often considered in computer science and business method related patents. This case raises the issue of what constitutes a purely mental process and further what constitutes a insignificant post-solution activity.

Classen sued BioGen, GlaxoSmithKline, Merck, and Kaiser Permanente for infringement of US Patent Nos. 6,638,739, 6,420,139, and 5,723,283 (“Classen Patents”) each titled, “Method and Composition for an Early Vaccine to Protect Against Both Common Infectious Diseases and Chronic Immune Mediated Disorders or their Sequelae.” On remand from the Supreme Court, in view of Bilski v. Kappos, 130 S. Ct. 3218 (2010), the Federal Circuit considered whether the claims of the Classen Patents were in valid under 35 USC 101 as being directed to an abstract idea. The Federal Circuit found that the claimed subject matter two ( the ‘139 and ‘739 patents) of the three Classen Patents were within the scope of section 101.

The court summarized that the Classen patents state “Dr. Classen’s thesis that the schedule of infant immunization for infectious diseases can affect the later occurrence of chronic immune-mediated disorders such as diabetes, asthma, hay fever, cancer, multiple sclerosis, and schizophrenia, and that immunization should be conducted on the schedule that presents the lowest risk with respect to such disorders. ”

Patents-in-Suit. Claim 1 of the ‘739 patent, representative of the ‘139 and ‘739 patents, provides:

1. A method of immunizing a mammalian subject which comprises:

(I) screening a plurality of immunization schedules, by

(a) identifying a first group of mammals and at least a second group of mammals, said mammals being of the same species, the first group of mammals having been immunized with one or more doses of one or more infectious disease-causing organism-associated immunogens according to a first screened immunization schedule, and the second group of mammals having been immunized with one or more doses of one or more infectious disease-causing organism-associated immunogens according to a second screened immunization schedule, each group of mammals having been immunized according to a different immunization schedule, and

(b) comparing the effectiveness of said first and second screened immunization schedules in protecting against or inducing a chronic immune-mediated disorder in said first and second groups, as a result of which one of said screened immunization schedules may be identified as a lower risk screened immunization schedule and the other of said screened schedules as a higher risk screened immunization schedule with regard to the risk of developing said chronic immune mediated disorder(s),

(II) immunizing said subject according to a subject immunization schedule, according to which at least one of said infectious disease-causing organism-associated immunogens of said lower risk schedule is administered in accordance with said lower risk screened immunization schedule, which administration is associated with a lower risk of development of said chronic immune-mediated disorder(s) than when said immunogen was administered according to said higher risk screened immunization schedule.

Claim 1 of the ‘283 patent provides: A method of determining whether an immunization schedule affects the incidence or severity of a chronic immune-mediated disorder in a treatment  group of mammals, relative to a control group of mammals, which comprises immunizing mammals in the treatment group of mammals with one or more doses of one or more immunogens, according to said immunization schedule, and comparing the incidence, prevalence, frequency or severity of said chronic immune-mediated disorder or the level of a marker of such a disorder, in the treatment group, with that in the control group.

Majority. The majority noted, quoting Diamond v. Diehr, 450 U.S. 175, 187 (1981), that “[i]t is now common place that an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.” The court found that the ‘139 and ‘739 patents included a physical step of immunization, and therefore was not a purely mental method. The court found with the immunization step the claims were directed to a specific tangible application under Bilski v. Kappos.  In upholding the validity of the claims of the ‘139 and ‘739 patents, the court did not find that the immunization step was an “insignificant postsolution activity” under Diehr.

However, the court characterized claim 1 of the ‘283 patent as covering the idea of collecting and comparing known information.  The court characterized the “immunizing” in the ‘283 patent as referring to the gathering of published data and therefore not a further act to set apart the claims from the abstract principle that a variation in immunization schedules may have consequences for certain diseases. As a result, the court found the claims of the ‘283 patent were invalid under section 101 as being directed to an abstract idea.

Additional View of Chief Judge Rader. Judge Rader wrote separately to comment on “significant unintended implications” of the patent eligibility doctrine under section 101. One implication is that creative claim drafting can be employed to avoid subject matter exclusions under section 101, such as the Beauregard claim for “computer programs embodied in a tangible medium” rather than computer programs themselves to avoid being rejected as a mathematical algorithm. Another implication was that subject matter limitations increase the expense and difficulty in obtaining a patent and may frustrate innovation and drive research funding to other “more hospitable locations” (countries). Judge Rader seems to encourage litigants to focus on novelty and adequate disclosure rather than whether the subject matter should be excluded under section 101 from patentability.

Dissent. The dissent would have held all the claims in question invalid as an unpatentable abstract idea. The dissent asserted that there was no difference, for section 101 purposes, between the claims of th2 ‘283 patent and the claims of the ‘139 and ‘739 patents, all of which require two steps according to the dissent: “(1) compare the incidence of chronic immune mediated disease in two groups of mammals who were immunized according to different schedules and then (2) immunize a mammal according to the lower risk schedule.” The dissent stated that the ‘283 patent claims “the scientific method as applied to the field of immunization.” The dissent said the ” claims do nothing  more than suggest that two immunized groups be compared to determine which one is better” and therefore are “exactly the type of ‘abstract intellectual concepts that ‘are the basic tools of scientific and technological work.’  (citing Gottschalk v. Benson, 409 U.S. 63, 67 (1972)). The dissent provides one absurd example of liability under the patents-in-suit,  “[a] patient might be liable for joint infringement  by receiving an immunization, and then wondering why their friend got sick when he got the same immunization.”

Conclusion. This case is favorable for clients seeking patent coverage in computer science, business methods, and related fields as it takes broad view of patentable  subject matter.

Aritcles on Chess-Like Computer Game Analogous Prior Art for Patent on Physical Chess-Like Board Game

Innovention Toys, LLC v. MGA Entm’t, Inc., Dkt. No. 2010-1290 (Fed. Cir. March 21, 2011) [PDF].

Innovation sued MGA, Wal-Mart, and Toys “R” Us (collectively, MGA) for infringement of Innovation’s U.S. Patent No. 7,264,242. The ‘242 patent is directed to a light-reflecting physical board game. MGA’s accused game is Laser Battle, a physical board game for playing a chess-like strategy game. One issue on appeal was whether certain prior art articles regarding chess-like computer games were analogous art for determining whether the claims directed to a physical board game of the ‘242 patent were invalid as obvious. The district court found the articles were non-analogous art. The appeals court disagreed and vacated with remand.

The ‘242 Patent. The ‘242 patent discloses a game that includes “a chess-styled playing surface, laser sources positioned to project light beams over the playing surface when ‘fired,’ mirrored and non-mirrored playing pieces used to direct the lasers’ beams, and non-mirrored ‘key playing pieces’ equivalent to the king pieces in chess.” Slip op at 2.  Representative claim 31 of the patent provides:

A board game for two opposing players or teams of players comprising:

a game board, movable playing pieces having at least one mirrored surface, movable key playing pieces having no mirrored surfaces, and a laser source,

wherein alternate turns are taken to move playing pieces for the purpose of deflecting laser beams, so as to illuminate the key playing piece of the opponent.

Prior Art At Issue. The prior art at issue included articles on Laser Chess and Advanced Laser Chess published in Compute! Both articles disclosed “chess-like computer games with virtual lasers and mirrored and non-mirrored pieces which are moved or rotted by players during alternating turns on a virtual, chess-like playing board.” Slip Op. at 4.

Analogous Art and Non-Analogous Art. A reference is prior art for the purposes of determining whether an invention is obvious if it is analogous to the claimed invention. Slip op at 12. The appeals court stated, “Two separate tests define the scope of analogous art:  (1) whether the art is from the  same field of endeavor, regardless of the problem addressed, and (2) if the reference is not within the field of the inventor’s endeavor, whether the reference still is reasonably pertinent to the particular problem with which the inventor is involved.” Id. at 12-13. It further provided, “A reference is reasonably pertinent if . . . it is one which, because of the matter with which it deals, logically would have commended itself to an inventor’s attention in considering his problem.” Id. at 13.

Argument. Innovation argued that Compute! articles were non-analogous art because the invention dealt with a non-virtual, 3-D, laser-based board game. Innovation argued the invention involved mechanical engineering and not computer programming.

Court’s ruling. The appeals court rejected this view finding the the district court erred in holding the Compute! articles on a electronic, laser based strategy game were non-analogous because even if the Compute! articles were not in the same field of endeavor, they were reasonably pertinent to the problem facing the inventors of a new physical laser based strategy game. The court said that, “the ’242 patent and the Laser Chess references are directed to the same purpose: detailing the specific game elements comprising a chess-like, laser-based strategy game.” As a result, the case was remanded to the district court to consider the Compute! articles in addressing MGA’s claim that the patent was invalid as obvious.

Shredding Parties to Destroy Evidence Could Cost Rambus $350+ Mil

Hynix Semiconductor v. Rambus, 2009-1299 (Fed. Cir. May 13, 2011) [PDF] and Micron Technology v. Rambus, 2009-1263 (Fed. Cir. May 13, 2011) [PDF].

In both of the above cited cases Rambus sued makers of SDRAM and DDR SDRAM alleging infringement of a number of Rambus owned patents.  A key issue addressed by the Federal Circuit was whether Rambus engaged in spoliation of evidence by destroying certain evidence.

In Hynix Semiconductor v. Rambus, the district court found Rambus did not spoil evidence, found for Rambus on several of Rambus’ infringement claims, and entered a 350 million dollar judgement in favor of Rambus. The district court in Micron Technology v. Rambus, found–on substantially the same facts as in Hynix— that Rambus did spoil evidence and as a sanction dismissed Rambus’ case with prejudice.  The Federal Circuit affirmed the spoliation ruling of the district court in Micron Technology and reversed the district court in Hynix Semiconductor finding the Hynix court applied too narrow an interpretation of whether the litigation was reasonably foreseeable.

Facts. Rambus’ primary business is licensing its intellectual property to DRAM Manufacturers. Rambus first attempted to license its rights in several patents covering RDRAM memory to manufacturers. It had modest success until in 1999 manufactures failed to deliver the promised manufacturing capacity and Intel began to back away from using RDRAM technology. At some point at or after Rambus began licensing RDRAM it under took a strategy for preparing to seek licensing revenue and litigation damages from manufactures adopting SDRAM. The following events occurred:

  1. At a Feb. 2, 1998 meeting between Rambus and its attorneys regarding licensing to infringing  SDRAM manufacturers, Rambus proposed a royalty rate that was so high that Rambus’ attorneys said “you’re not going to have a licensing program, you’re going to hav a lawsuit on your hands. Rambus representative’s said they didn’t to be “Battle Ready” for litigation. Rambus attorney’s recommended a document retention policy.
  2. Meeting notes for a November 1998 meeting showed that Rambus planned to assert its patents against SDRAM manufacturers.
  3. In December 1998, Joel Karp, Rambus VP of IP drafted a memo describing a “nuclear winter” scenario if Intel moved away from RDRAM and outlined plans to sue Intel ad SDRAM manufacturers. The memo also noted that infringement charts for Micron Devices were complete.
  4. A July 22, 1998, Rambus Document retention policy stated that destruction of relevant and discoverable evidence did not need to stop until the commencement of litigation.
  5. Karp told employees to look fora helpful document to keep, including documents that would help establish conception and prove that Rambus has IP.
  6. On March 16, 1998, a Rambus email discussed the growing worry that email backup tapes were discoverable information.
  7. On May 14, 1998, Rambus implemented a new policy of keeping email backup tapes for only 3 months.
  8. In July 1998, Rambus erased all but 1 of the 1,269 tapes storing email backups for the past several years. The one tape saved had documents the helped establish a priority date for one of its inventions.
  9. On September 3, 1998, Rambus held its first “shred day” to implement its newly adopted document retention policy.
  10. In April 1999, Karp instructed Rambus’ outside patent prosecution counsel to implement the document retention policy and discard material from its patent prosecution files, including draft patent applications, claims, amendments, attorney notes, and correspondence with Rambus.
  11. On August 26, 1999, Rambus held a shredding party (second shred day) as a part of its IP litigation readiness goals and destroyed between 9,000 and 18,000 pounds of documents in 300 boxes.
  12. In November 1999, negotiations with on SDRAM manufacturer, Hitachi broke down.
  13. In December 1999, Rambus instituted a litigation hold to preserve evidence.
  14. In January 2000, Rambus sued Hitachi. The case settled in June 2000.
  15. Rambus negotiated SDRAM licenses with SDRAM Manufacturers Toshiba, Oki, and NEC.
  16. Rambus sued Infineon in August 2000
  17. On August 18, 2000, Rambus approached Mircon about licensing.
  18. On August 28, 2000, Mircon sued Rambus for declaratory judgment of invalidity, non-infringement, and unenforceability of Rambus patents .
  19. On August 29, 2000, Hynix Semiconductor filed a similar declaratory judgment suit against Rambus in a different court.

Law on Spoliation of evidence. The court noted that “[d]ocument retention policies, which are created in part to keep certain information from getting into the hands of others, including the Government, are common in business. “  It also noted that “It is, of  course, not wrongful for a manager to instruct his employees to comply with a valid document retention policy under ordinary circumstances.” A party can only be sanctioned for the destruction of evidence when it has a duty to preserve it. Therefore “spoliation refers to the destruction or material alteration of evidence or to the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation.” The mere existence of a potential claim or distant possibility of litigation is not enough to trigger the duty to preserve. However, the standard does not require litigation to be imminent or probable with out significant contingencies.

Findings. The Federal Circuit found the district court’s finding of spoliation in Micron was not in error for the following reasons.

  1. The reason for the existence of Rambus’ document retention (or destruction) policy “was to further Rambus’s litigation strategy by frustrating the fact-finding efforts of parties adverse to Rambus.”
  2. “Rambus was on notice of likely infringing activities by particular manufacturers.”
  3. “Rambus took several steps in furtherance of litigation prior to its second shredding party on August 26, 1999.”
  4. As the plaintiff-patentee, Rambus could more likely foresee the litigation commencing because whether litigation occurred was largely dependent on Rambus’ own decision to litigate.
  5. “In general, when parties have a business relationship that is mutually beneficial and that ultimately turns sour, sparking litigation, the litigation will generally be less foreseeable than would litigation resulting from a relationship that is not mutually beneficial or is naturally adversarial.” However, the Rambus’ relationship with the RDRAM manufacturers did nothing to make litigation significantly less likely, and “Rambus and the manufacturers did not have a longstanding and mutually beneficial relationship regarding SDRAM.”

When to Preserve. Therefore, materials should be preserved at least when:

  1. The reason for the destruction of materials is or can be understood as being to frustrate fact-finding efforts of adverse parties;
  2. A patent owner/potential plaintiff is on notice of likely infringing activities; or
  3. Steps have been taken in the furtherance of litigation.

Claim Against Yahoo! Messager Requires Logic Operations on Same Message(s)

Creative Internet Adver. Corp. v. Yahoo!, Inc., 2010-1215 (Fed Cir. April 22, 2011) [PDF].

Creative sued Yahoo! claiming Yahoo!’s instant messaging product, Yahoo! Messenger infringed U.S. Patent No. 6,205,432. The ‘432 patent is directed to a system where references to advertisements are inserted between end users of an instant messaging software.

The claim at issue on appeal was claim 45, which provides:

45. A computer program embodied on a computer-readable medium for inserting a background reference to a stored advertisement into an end user
communication message, said computer program comprising:

logic configured to receive an end user communication message from a first site;

logic configured to insert a background reference to a stored advertisement into said end user communication message, wherein said logic configured to insert the background reference is further configured to insert said background reference responsive to an overwrite authorization; and

logic configured to transmit said end user communication message with the background reference
to a second site.

Yahoo asserted that each logic elements of the claim must operate on the same message, e.g. one message being received, inserted into, and transmitted.  Creative argued that all three logic elements did not need to operate on the same message.

Majority: Claim requires each logic step to act on same message(s). The majority agreed with Yahoo, at least in part.  Generally the use of “an” or “a” in a claim means one or more. So the phrase “an end user communication message”, means one or more end user communication messages. The majority noted that “The subsequent use of  definite articles “the” or “said” in a claim to refer back to  the same claim term does not change the general plural rule [of “an”], but simply reinvokes that non-singular meaning.” The majority concluded that to infringe claim 45 the system must contain logic configured to insert a background reference into the same messages that are received and transmitted by other logic elements in the program. But, the insertion logic need not act on the message after it is received, it could act an other time. The court concluded that the trial court erred in failing to instruct the jury on this point.

Dissent: Apparatus claim requires no operation order nor action on the same message(s). The dissent asserted that because claim 45 was an apparatus claim, an infringing program only needed to have logic for receiving, inserting, and transmission, but the execution of that logic could be in any order. Further, the dissent found that the use of the term “said” in the claim does not require that each logic limitation be executed on the same message. The dissent asserted that the majority was interpreting the apparatus claim 45 as a method claim. The dissent stated, “requiring a concerted execution of the claimed logic upon a single message is not the proper test for infringement of an apparatus claim.” The dissent continued, “Instead, the proper question for infringement is whether the accused computer program contains logic configured to meet each limitation, regardless of how or when the claimed logic is used.”

The majority said that the dissent’s interpretation would cover a program that that only receives a message, inserts a background reference into a different message, and then transmits a third message.  The majority asserted that this interpretation is contrary of the claim language because “it would render the word ‘said’ a nullity.”

The Difference One Word Makes: “Creating a Database ‘of’ Properties” Required a Prepopulated Database

Move, Inc. v. Real Estate Alliance, Dkt No. 2010-1236 (Fed. Cir. Mar. 22, 2011) [PDF].

Move sued Real Estate Alliance (Real) seeking declaratory judgment that Real’s U.S. Patent No. 4,870,576, and 5,032,989 (the ’989 patent) were invalid. Real appealed the district courts construction of claim 1 of the ‘989 patent.  Claim 1 provides:

A method using a computer for locating available real estate properties comprising the steps of:

a) creating a database of the available real estate properties;
b) displaying a map of a desired geographic area;
c) selecting a first area having boundaries within the geographic area;
d) zooming in on the first area of the displayed map to about the boundaries of the first area to display a higher level of detail than the displayed
map;
e) displaying the zoomed first area;
f) selecting a second area having boundaries within the zoomed first area;
g) displaying the second area and a plurality of points within the second area, each point repre-senting the appropriate geographic location of an
available real estate property; and
h) identifying available real estate properties within the database which are located within the second area.

Difference between use of “of” and “for.” The Federal Circuit addressed the construction of several terms and phrases of the claim, however this post will focus on the meaning of the phrase “creating a database of available read estate properties. “  The district court construed the claim to cover creating only the structure or schema of the database, i.e., creating an empty database with a defined structure. The district court noted that “the plain language of the claim, creating a database ‘of’ properties, rather than ‘for’ properties, implies that the database is populated with properties when its created.” However, the district court reasoned that “that database is not populated by the inventor, but rather by third-party users, who wish to sell a property.”

Federal Circuit. The federal circuit disagreed and found that the use of “of” in the claim requires that in order to infringe, the database must be populated with at least two properties upon creation.  In addition the court noted that the pre-existing properties are first mentioned in the preamble and they are displayed in step (g) and identified in step (h). In other words, an empty database would not infringe.

Claims Require “Root Bus Controller” be Highest Order Bus Controller in Parallel Computing System

Fifth Generation Computer Corp. v.  IBM, Dkt No. 2010-1201 (Fed. Cir. Jan 26, 2011) [PDF].

Fifth Generation sued IBM for alleged infringement of US patent 6,000,024, which is directed to binary tree parallel computing systems.  It  is well known that parallel computing systems attempt to increase processing speed by the use of multiple processors operating simultaneously.

The key issue in the case was how the term “root bus controller” in claims 1 and 7 should be interpreted. Claim 1 of the ‘024 patent provides:

A binary tree computer system for connection to and control by a host computer, comprising:

N bus controllers connected in a binary tree con-figuration in which each bus controller, except those at the extremes of the tree, are connected to left and right child bus controllers, where N is an integer greater than 2, one of said bus controllers being a root bus controller for connecting said binary tree connected bus controllers to said host computer;

N processing elements, one attached to each of said bus controllers;

N+1 leaf processing elements connected, two each, as right and left children to the bus controllers at the extremes of said bi-nary tree;

each of said processing elements including a microprocessor and a memory;

each of said bus controllers including, for each processing element connected thereto, a buffered interface connecting said processing element to said bus controller for transmitting instructions and data between the bus controller and the connected processing element, and means for writing information into the memory of the connected processing element without involving the microprocessor of said connected processing element.

Claims require “root bus controller” to have no parent bus controller. The court noted that patent claims function to delineate the scope of the claimed invention and give notice to the public of the patentee right, however this notice function would be undermined, the court said, if claims were construed so as to render “characteristics specifically described in those claims as superfluous.” The appellate court agreed with the trial court that root bus controller is necessarily the link between the binary tree of bus controllers and the host computer. Therefore the root bus controller is the “the bus controller at the highest order position of the binary tree computer system that connects the binary tree to the host computer and which has no parent bus controller.”

Fifth-generation argued that the root bus controller is merely the highest level bus controller for a sub-tree that could possibly connect to a parent bus controller as a part of a larger tree.  The appellate court rejected this stating that if Fifth Generation’s arguments were to be adopted the language of claim one providing that the route bus controller is “for connecting said binary tree connected bus controllers to said host computer”  would lose its plain meaning. Further the court found that the claim language required “one of said bus controllers” to be the root bus controller, and if this generation’s interpretation were adopted this element of the claim would be rendered superfluous.

Subject matter of patents incorporated by reference not necessarily imported into the claims. The second issue in the case was whether patents, disclosing subtress, incorporated by reference in the ‘024 patent supported Fifth Generation’s interpretation of the claims. The the court found that a patent does not need to expressly recite concepts disclosed in patents incorporated by reference in order to incorporate them into the later patent specification.  Yet, this did not save Fifth Generation because the court stated that not every concept in prior art inventions necessarily are imported into every claim of the later patent through an incorporation by reference statement.

Judgment of Non-Infringement Affirmed.

Repeated References to “Still” Image Precludes Coverage of Video Dispite Alternative Embodiment Reference

St. Clair Intellectual Prop. Consultants v. Cannon, 2009-1052 (Fed. Cir. 2011) [PDF]

This case raised the issue of whether one or two references to an alternative embodiment (MPEG) in the specification can overcome the predominance and repeated reference to the first embodiment (still images). Two issues are explored here (1) whether all the claims were limited to an interpretation requiring the infringing devices to have formats corresponding to different computer architectures, and (2) whether the claim language of “plurality of different data formats” includes moving (movie) images or only still images. The district court found infringement, the appeals court disagreed and reversed, with one judge dissenting.

In St. Clair the plaintiff sued several digital camera manufacturers for infringing  United States Patent Nos. 5,138,459 (“‘459 patent”), 6,094,219 (“‘219 patent”), 6,233,010 (“‘010 patent”), and 6,323,899 (“‘899 patent”).  Claim 16 of the ‘459 patent provides: “A process for storing an electronically sensed video image comprising the steps of: . . . recording in selectable addressible memory means at least one of a plurality of different digital output data format codes where each of said plurality of out-put data format codes corresponds respectively to one of a like plurality of different data formats for different types of computer apparatus.”

The parties disputed whether the phrase “plurality of different data formats for different types of computer apparatus” language” was limited to formats related to different computer architectures (e.g., IBM or Apple PCs) or if it could also include formats related to different computer applications (e.g., software that can run GIFF or PICT). If the phase was limited to different computer architectures then Fuji, the appellant, would avoid infringement.

Majority: Claims Treated Similarly Requiring Different Computer Architectures. Reviewing the specification and the prosecution history, the majority found that the claim phrases should be limited to the  different computer architectures and not the broader interpretation of formats related to different computer applications. During the prosecution the inventors stated, as summarized by the court, that the invention ” ‘solve[d] a long felt need’ by allowing data format compatibility with a ‘plurality of types of personal computers manufactured by different [personal com-puter] companies, IBM PC, Apple, Sun Micro Systems, Digital Equipment, etc.’ ”

Dissent: Not All Claims Contain Architecture Language and Deserve Broader Interpretation. Some The dissent agreed with the majority regarding claims having the language of  “a plurality of different file formats for different types of computer apparatus” or “a plurality of different data formats for different types of information handling systems.”   However, the dissent asserted that the claims of the ‘010 and ‘899 patents did not contain the “for different types of computer apparatus” limitation. For example, claim 1 of the ‘010 patent provides “…a digital control unit for formatting said digital image signal in one of a plurality of computer formats.” The dissent asserted “Because the inventors omitted the ‘for different types of computer apparatus’ limitation, the plain language of those claims is broader.” Further the dissent found that  neither the specification nor the prosecution history supported importing such a limitation into those claims. The dissent would have affirmed the district courts finding of infringement.

Majority: Use of “Still” and “Image” throughout Patents Excludes Video Coverage. The majority found the repeated use of the word  “still” in the title and the abstract of the ‘459 and ‘219 patents, and its use throughout the specification and summary of invention of all of the patents precluded the possibility that the “plurality of data formats” limitation in claim 16 included moving image formats. The majority noted that the word movie did not appear anywhere in the patents. A finding that this limitation covered movie formats would have resulting in infringement.

Dissent: Single Reference to MPEG and DVI is Sufficient to Broaden Claim to Cover Video. The disent noted that the specification expressly names MPEG and DVI compression as “an alternative embodiment of the present invention.” ‘459 patent col.10 ll.46-59. It is known that MPEG and DVI are video formats. The dissent found that the claim language of “plurality of different data formats” plainly included MPEG video and thereby video formats. Again the dissent’s interpretation would have resulted in affirmation of the district courts finding of infringement.

“Use” Infringment of a System Requires Control Sufficient to Put System in Service

Centrillion Data Systems LLC v. Quest Communications International, 2010-1110  (Fed. Cir.  Jan 20, 2010) [PDF]

This case addresses the issue of whether infringement may be found for a “use”–under 35 U.S.C. 271(a)– of a system claim, which includes elements in the possession of more than one actor, e.g., the service provider possesses some elements and the end user possesses other elements.

At issue in the case is Quest’s customer billing information systems. Centrilion asserts that Quest’s billing systems infringe U.S. Patent No. 5,287,270. Claim 1 of the ‘270 patent, at a high level, requires–as summarized by the court–a system for presenting information . . . to a user . . . comprising:  (1)  storage means for storing transaction records, (2) data processing means for generating summary reports as specified by a user from the transaction records, (3) transferring means for transferring the transaction records and summary reports to a user, and (4) personal computer data processing means adapted to perform additional processing on the transaction records. Centrillon acknowledged that the claim includes a a back-end system maintained by the service provider and a front end system maintained by an end user.

Quest’s billing system software has a back office system and a front-end client application that a user may install on a personal computer.  When the user sign’s up for the billing software, the software made available to the users electronic billing information on a monthly basis.

Control means ability to put system into service. The court held that to “use” of a system for purposes of infringement “a party must put the invention into service, i.e., control the system as a whole and obtain benefit from it.” However “control” is not to be interpreted too narrowly. Control includes, as in the case of NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282 (Fed. Cir. 2005), the ability to put the system as a whole into service. Therefore, a customer in NTP remotely “controlled” by simply transmitting a message (email)  and it did not matter that the use did not have physical control over the relays of the system.

Customer’s Use. In Quest’s case, the court rejected Quest’s argument that its customers did not use the system because they did not control the back-end processing. Quest’s system has two operations, an on-demand operation and a normal operation. Under the on-demand operation, the user’s request directly generated a query returning data to the user. Under the  normal, operation the system generated reports on a monthly basis that the user could retrieve. The court found that both the on-demand and standard operation of the billing information system was a “use” as a matter of law.  The on-demand operation was a use because the customer controlled the system on a one request to one response basis.  Under the normal operation, the court found that the user controlled the system by signing up initially with the service, which triggered the monthly reports to run. In both modes of operation, but for the customer’s actions, the entire system would never have been put into service.

Quest’s Use. The court determined as a matter of law that Quest did not “use” the patented invention. To “use” an invention, a party must “put the claimed invention into service, i.e., control the system and obtain benefit from it.” The court found that Quest never uses the entire claimed system because it never puts into service the :personal computer data processing means.” In other words, it does not use a front end system required by the claims. Further, “supplying software for the customer to use is not the same as using the system.”

Vicarious liability requires control or direction of actions of another. The court noted the only way to show that Quest used the patented system was if Quest is vicariously liable for the action of its customers so that the use by the cutmers may be attributed to Quest. The court stated that vicarious liability attaches when there is an agency relationship where one party controls or directs the action of another to perform one or more steps of a method claim. The court found Quest was not vicariously liable because Quest’s customer’s are not its agents and Quest did not direct its customers to perform.

“Making” requires combining all the elements of the claim. The court found that Quest did not “make” the invention–under section 271–because Quest manufactures only part of the claimed system and does not make the “personal computer data processing means.”