Failure to Satisfy Section 112: H-W Technology, L.C. v. Overstock.com, Section 112 Invalidity Of The ‘955 Patent Claims and Practice Takeaways (Parts 4 and 5)

April 10th, 2015 by Thomas J Germinario

Section 112 Invalidity Of The ‘955 Patent Claims

A. Claim 9

Claim 9 of the ‘955 patent as approved by the PTO for issuance, reads as follows:

A method for performing contextual searches on an Internet Phone (IP) phone comprising the steps of:

  • receiving a command to perform a contextual search;
  • receiving search criteria from a user of said IP phone;
  • submitting said search criteria to a server coupled to said IP phone; and
  • receiving from said server a list of merchants matching said search criteria and information regarding each of said merchants in said list;
  • wherein said user completes a transaction with at least one of said merchants listed without the need to generate a voice call;
  • wherein said information received by said user comprises a variety of offers, wherein said user selected one of said variety of offers associated with said one of said merchants listed, wherein said selected offer is transmitted to said one of said merchants listed electronically;
  • and wherein said user’s contact and payment information is not transmitted to said one of said merchants listed, wherein said user’s contact and payment information is available to said one of said merchants listed. (emphasis added)

However, as issued, Claim 9 omitted the method step set out in boldface type. Claim 9, uncorrected, fails to delineate the no-call feature as intended by Plaintiff and approved by the PTO. Therefore, the District Court reasoned, Claim 9 does not “adequately perform [its] function of notifying the public of the patentee’s right to exclude,” citing Solomon v. Kimberly-Clark Corp., 216 F.3d 1372, 1379 (Fed. Cir. 2000)); and Allen Engineering Corp. v. Bartell Industries, Inc., 299 F.3d 1336, 1349 (Fed. Cir. 2002) (holding that when the plain language of the claims are inconsistent with the specification, the claims are invalid for not properly claiming what the inventor regards as his invention).

Finding that the omitted claim limitation is material and that the absence of the missing language is impossible to detect by simply by reading the patent, the District Court ruled that it had no authority to correct the patent under these circumstances, citing CBT Flint Partners, LLC, 654 F.3d at 1358; and Novo Indus., L.P., 350 F.3d at 1357. Plaintiff’s allegation of infringement with respect to Claim 9 of the ‘955 patent was accordingly dismissed.

The Federal Circuit agreed with the District Court’s determination that the error in Claim 9 was not evident from the face of the patent, because the claim reads coherently without the missing limitation, and nothing in the surrounding claim language indicates that the limitation was missing. Although the missing limitation was recited in the patent specification, the Court viewed it as an optional feature of the invention and declined to read it into the claim. And while the error was clear from the prosecution history of the application, the Court said that alone did not provide sufficient grounds for the judicial correction, citing Grp. One, Ltd. v. Hallmark Cards, Inc., 407 F.3d 1297, 1303 (Fed. Cir. 2005).

The Federal Circuit also upheld the District Court on its refusal to consider the H-W’s certificate of correction, because neither party had argued that this suit involved causes of action arising after the certificate of correction issued. And on the question whether H-W should be permitted to assert claim 9 uncorrected, they ruled that where “a claim issues that omits a material limitation, and such omission is not evident on the face of the patent, the patentee cannot assert that claim until it has been corrected by the PTO.” To enforce the uncorrected claim, they stated, “would potentially permit patentees to assert claims that they never asked for nor rightly attained. Such a result would be inequitable and undermine the notice function of patents.”

B. Claim 17

Once stripped of its ability to assert its independent method Claim 9 by a PTO printing error, Plaintiff H-W sought to instead assert its independent apparatus Claim 17, which covered the same subject matter and did contain the claim limitation that was deleted from Claim 9. But here again, Plaintiff faced the issue of indefiniteness under Section 112, paragraph 2, this time because two of its claim limitations seemed to deal with actions of the app user rather than capabilities of the app itself.

Upholding the District Court’s invalidation of Claim 17, the Federal Circuit relied on its rulings in IPXL Holdings, L.L.C. v. Amazon.com, Inc., 430 F.3d 1377, 1384 (Fed. Cir. 2005), and In re Katz Interactive Call Processing Patent Litigation, 639 F.3d 1303, 1318 (Fed. Cir. 2011), in which they held claims indefinite for combining two classes of invention. In those cases, the Federal Circuit considered patent claims that recited both an apparatus and a method of using the apparatus indefinite and invalid because it was unclear when infringement would occur

Since the contested Claim 17 limitations recited “wherein said user completes a transaction” and “wherein said user selects” an offer, the Federal Circuit reasoned, this language “does not merely describe functional limitations of the apparatus as Plaintiff argues, but is instead directed toward user action.” They therefore held that Claim 17 “creates genuine confusion as to when infringement occurs, e.g., when one manufactures the IP phone described in Claim 17 or when the user uses the IP phone to complete a transaction using the no-call feature.” As a result, the Federal Circuit agreed with the District Court’s finding that Claim 17 was indefinite and invalid because it combines two statutory classes of invention in a single claim.

Practice Takeaways

Several of the commentators and bloggers on this case suggest that the lesson to be learned here is to read the issued claims of your patent carefully before initiating an enforcement action, so that, if a certificate of correction is needed, you can obtain it before filing suit. But that advice misreads the Federal Circuit’s holding, which limits the effectiveness of a certificate of correction to causes of action arising after the certificate is issued. Presumably, a plaintiff’s infringement cause of action arises before a lawsuit is even contemplated, so scrutinizing your issued patent claims for errors while you’re preparing to file your action does you no good whatsoever.

Instead, this case puts the onus on the patent attorney to detect material printing errors soon after issuance of a patent. Since even a careful reading of the issued patent is apt to miss a potentially invalidating misprint – even a comma in the wrong place can change the meaning – it’s advisable to run the entire issued patent through text comparison software, which comes bundled with most word processing programs. Printing errors in the specification can be equally dangerous if they cause its language to literally contradict what’s in the claims, because that can be the grounds for a finding of indefiniteness under Section 112 as well.

The secondary lesson of this case relates to mixing different classes of inventions in the same claim. The line between a functional limitation and a method of use in an apparatus claim is not always clear. And method claims nearly always require the recitation of an apparatus deployed in practicing the method. The lines distinguishing different classes of invention become even more blurred when dealing with software, which is still not considered patentable subject matter as such. The best solution to this problem would be to allow software to be claimed as software, without having to disguise it as a method or an apparatus. Because software inherently is a hybrid of process and machine, its continued exclusion from patentable subject matter is bound to engender Section 112 issues of the type we see in this case.

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