Patent Watch: ePlus, Inc. v. Lawson Software, Inc.

by BakerHostetler
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To assess whether a claim is indefinite, [we] do not "look to the knowledge of one skilled in the art apart from and unconnected to the disclosure of the patent." We rather "look at the disclosure of the patent and determine if one of skill in the art would have understood that disclosure to encompass [the required structure]."

On November 21, 2012, in ePlus, Inc. v. Lawson Software, Inc., the U.S. Court of Appeals for the Federal Circuit (Dyk, Prost,* O'Malley) reversed-in-part, vacated-in-part, affirmed-in-part, and remanded, inter alia, the district court's denial of Lawson's motion for judgment as a matter of law notwithstanding the jury verdict that Lawson infringed U.S. Patents No. 6,023,683 and No. 6,505,172, which related to electronic sourcing to divide a single requisition (or shopping list) into multiple purchase orders. The Federal Circuit also addressed Lawson's assertion that the '683 and '172 patent claims were invalid for indefiniteness, stating:

Lawson has not waived its indefiniteness argument regarding the means for processing limitation. Prior to trial, Lawson moved for summary judgment, arguing that the specification does not adequately disclose a structure for the "means for processing" limitation. The district court rejected Lawson's argument, and Lawson did not raise the issue again at trial. Nor did Lawson raise the issue in its first (pre-verdict) JMOL motion. At the hearing relating to that motion, however, Lawson's attorney informed the district court that it sought a ruling that the system claims are indefinite. The district court responded that in its view, Lawson could not seek a JMOL based on indefiniteness because the issue was not raised during trial. After the jury verdict was delivered, Lawson again sought a JMOL. This time, Lawson argued (in writing) that the system claims are invalid for indefiniteness, yet it did not mention any particular limitation. ePlus argues that because Lawson did not raise the issue of indefiniteness at trial, and because the JMOL motions were not sufficiently specific, Lawson has waived its right to appeal indefiniteness altogether. We disagree.

It is generally true that "[a] party may preserve an issue for appeal by renewing the issue at trial or by including it in memoranda of law or proposed conclusions of law." But that rule does not present an obstacle to Lawson's indefiniteness argument. To begin with, indefiniteness is a question of law and in effect part of claim construction. Thus, in a case like this, when the arguments with respect to indefiniteness are not being raised for the first time on appeal, we do not readily find a waiver. Moreover, the district court and ePlus were made aware of Lawson's indefiniteness argument regarding the "means for processing" limitation -- not just at the summary judgment stage, but also at the JMOL stage. And, it is abundantly clear from the record that the district court did not intend to revisit the indefiniteness issue once it denied summary judgment. Given that indefiniteness is an issue of law, the district court regarded its ruling on summary judgment to be the last word on the matter until appeal. Indeed, at the hearing relating to Lawson's first motion for JMOL, the district court stated to Lawson's counsel that the indefiniteness argument was mature for appeal. In light of the specific facts of this case, Lawson was not required to ignore the writing on the wall and press the issue over and over again to preserve it for appeal. In sum, we reject ePlus's waiver argument.

Turning to the merits, we note that there is no dispute that the system claims are drafted as means plus function claims under 35 U.S.C. § 112. "A patent applicant who employs means-plus-function language 'must set forth in the specification an adequate disclosure showing what is meant by that language.'" "[I]n a means-plus-function claim 'in which the disclosed structure is a computer . . . programmed to carry out an algorithm, the disclosed structure is not the general purpose computer, but rather the special purpose computer programmed to perform the disclosed algorithm.'"

We agree with Lawson that the specification does not disclose sufficient structure for the "means for processing" limitation. There is no dispute that the function claimed in this limitation is generating one or more purchase orders based on a requisition list. The district court determined that the specification discloses "a purchase order generation module." But there is no mention of such structure in the specification. Nor is there anything else that describes what structure specifically corresponds to the means for processing limitation.

ePlus argues that it is not required to disclose a structure that corresponds to the overall function of generating purchase orders because implementing that functionality was already known prior to the '683 patent. According to ePlus, the specification need only disclose those aspects of the claimed invention that do not exist in the prior art -- i.e., using a single requisition to generate multiple purchase orders. The suggestion is that by combining the teachings of the prior art and the '683 patent, one of ordinary skill in the art would know how to implement the claimed invention. We disagree. The indefiniteness inquiry is concerned with whether the bounds of the invention are sufficiently demarcated, not with whether one of ordinary skill in the art may find a way to practice the invention. To assess whether a claim is indefinite, therefore, we do not "look to the knowledge of one skilled in the art apart from and unconnected to the disclosure of the patent." We rather "look at the disclosure of the patent and determine if one of skill in the art would have understood that disclosure to encompass [the required structure]." Here, the specification does not disclose any structure that is responsible for generating purchase orders. There is no instruction for using a particular piece of hardware, employing a specific source code, or following a particular algorithm. There is therefore nothing in the specification to help cabin the scope of the functional language in the means for processing element: The patentee has in effect claimed everything that generates purchase orders under the sun. The system claims are therefore indefinite.

If you have questions about the material presented above, please contact Dr. Lawrence M. Sung ( lsung@bakerlaw.com or 202.861.1537) or any member of our Intellectual Property Team.

See information regarding BakerHostetler's Patent Litigation and IP Prosecution and Portfolio Management practices.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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