Federal Circuit Review - March 2021

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Corresponding Structure Snafu: Lack of Algorithm Renders Claims Indefinite

In Rain Computing, Inc. v. Samsung Electronics Co. Ltd., Appeal No. 20-1646, the Federal Circuit held that the structure for performing a function of a means-plus-function term may not be a general purpose computer without an algorithm for performing the function.

In 2018, Rain Computing, Inc. (“Rain”) filed suit against Samsung Electronics Co. Ltd., Samsung Electronics America, Inc., and Samsung Research America, Inc. (collectively “Samsung”) for patent infringement based on Samsung’s provision of software applications through an app store. Specifically, the claims of the patent are directed to delivering software application packages to a client terminal. In February of 2020, the district court issued an order construing various terms including an “executing” term and a “user identification module” term. The district court further determined that the term “user identification module” was a means-plus-function term and was not indefinite. Following that order, the district court entered judgment, based on the parties’ joint stipulation, that the asserted claims were neither infringed nor invalid for indefiniteness. Rain appealed and Samsung cross-appealed.

On appeal, Rain challenged the district court’s construction of the “executing” term and Samsung challenged the district court’s construction of the “user identification module” term. Specifically, Samsung challenged the court’s determination that the “user identification module” term does not render the claims indefinite. Samsung argued that the “user identification module” term lacked specific structure to render the term definite. The Federal Circuit agreed with Samsung’s arguments. First, the Federal Circuit concluded that the term “user identification module” was a means-plus-function term, noting that “module” is a well-known nonce word that can substitute for “means,” that the term was not commonly understood to connote a particular structure, and that the specification did not impart any structural significance to the term. Having determined that the term was a means-plus-function term, the Federal Circuit next identified the function “to control access to one or more software application packages to which the user has a subscription.” The function was undisputed by both parties. Finally, the Federal Circuit determined that the specification failed to disclose adequate corresponding structure for executing the function of the “user identification module.” The Federal Circuit explained that, where the corresponding structure is a general computer that is not capable of performing the controlling access function without specialized software, the specification must disclose the algorithm the computer performs to accomplish that function. Because the Federal Circuit concluded that nothing in the claim language or the written description provided an algorithm to execute the function of the “user identification module,” the term “user identification module” lacked sufficient structure, rendering the asserted claims indefinite. Accordingly, the Federal Circuit reversed the district court’s judgment that the claims were not invalid as indefinite and dismissed Rain’s appeal as moot.

Federal Circuit Throws Out Diaper Genie Decision

In Edgewell Pers. Care Brands, LLC v. Munchkin, Inc., Appeal No. 20-1203, the Federal Circuit held that apparatus claims’ non-functional terms should be construed to cover all of the apparatus’s uses; vitiation cannot be used to shortcut the doctrine of equivalents analysis.

Edgewell Personal Care Brands, LLC and International Refills Company, Ltd. sued Munchkin, Inc. for infringement of U.S. Patent Nos. 8,899,420 and 6,974,029. The patents covered a specialized garbage can, which includes a pail and a cassette that dispenses a plastic wrapper for used diapers. The ’420 patent’s claims were directed to a cassette with a “clearance” in the portion of the pail that holds the cassette. The ’029 patent’s claims were directed to a cassette with an “annular cover” with a “tear-off section.” After construing the patents’ claims, the district court granted summary judgment of no literal of the ’420 patent and no infringement under the doctrine of equivalents of the ’029 patent.

On appeal, the Federal Circuit vacated summary judgment for the ’420 patent, reversed summary judgment for the ’029 patent, and remanded. With respect to the ’420 patent, the Federal Circuit held the district court erred in its construction of “clearance” by adding a requirement that a space remain between the cassette and pail after installation of the cassette. The Federal Circuit explained: “it is usually improper to construe non-functional claim terms in apparatus claims in a way that makes infringement . . . turn on the way an apparatus is later put to use.” Because of this error in claim construction, the Federal Circuit vacated summary judgment of non-infringement of the ’420 patent. With respect to the ’029 patent, the Federal Circuit affirmed the district court’s claim construction, but nevertheless reversed the summary judgment of no infringement under the doctrine of equivalents because the district court incorrectly applied a claim vitiation analysis. The Federal Circuit explained vitiation applies only if the theory of infringement renders a claim element “inconsequential or ineffective.” The Federal Circuit cautioned that courts should not “shortcut [the doctrine of equivalents] inquiry by identifying a ‘binary’ choice in which an element is either present or ‘not present.’” Instead, a court must evaluate the evidence and determine whether a reasonable juror could find that the accused products perform substantially the same function, in substantially the same way, achieving substantially the same result as the claims. In view of testimony from Edgewell’s expert, the Federal Circuit held there was a genuine issue of material fact sufficient to preclude summary judgment, and reversed.

Reviewability of PTAB Estoppel Decisions

In Uniloc 2017 LLC v. Facebook Inc., Appeal No. 19-1688, the Federal Circuit held that 35 U.S.C. § 314(d) does not preclude Federal Circuit review of the Patent Trial and Appeal Board’s post-institution application of § 315(e)(1) estoppel.

Uniloc’s patent, U.S. Patent No. 9,995,433 (’433 patent), was the subject of multiple petitions for inter partes review (“IPR”), including two petitions filed by Facebook and one petition filed by Apple. While Facebook’s petitions were pending, the Board instituted Apple’s IPR. Facebook then filed a follow-on petition substantively identical to Apple’s instituted petition and moved to join Apple’s IPR. The Board instituted Facebook’s follow-on petition and granted the motion. In the meantime, yet another challenger, LG Electronics, filed two petitions substantively identical to the two original Facebook petitions. The Board eventually instituted Facebook’s original petitions, LG’s follow-on petitions, and granted LG’s motion to join the Facebook IPRs.

Two months after instituting LG’s follow-on IPRs, the Board issued a final written decision in the Apple IPR upholding patentability of all challenged claims. This triggered the estoppel provision of §315(e)(1) as to Facebook, and the Board estopped Facebook from maintaining its challenge for any claim upheld in the Apple IPR. §315(e)(1) estoppel prevents a petitioner in an IPR with a final written decision from later raising “any ground that the petitioner raised or reasonably could have raised during that inter partes review” in a subsequent USPTO action, civil action or ITC proceeding. The Board, however, held that Facebook’s estoppel did not extend to LG. The Board eventually issued a final written decision in the Facebook/LG IPRs holding all challenged claims unpatentable.

Uniloc appealed, arguing that LG was a real party in interest or privy of Facebook, and therefore should have been subject to estoppel. Before reaching Uniloc’s argument, the Federal Circuit first considered whether §314(d), which makes the Board’s institution decision nonappealable, also precludes judicial review of the Board’s post-institution application of estoppel. The Federal Circuit reasoned that because any estoppel in this case only arose post-institution, it was separate from the Board’s earlier institution decision. Thus, because estoppel could not have applied at the time of institution, the Federal Circuit held §314(d) likewise does not bar appellate review of the Board’s post-institution estoppel decision. Turning to the Uniloc’s underlying challenge, the Federal Circuit affirmed the Board’s conclusion that LG was not a real party in interest or privy of Facebook.

Innovative Data Processing Is an Ineligible Algorithm

In In Re The Board Of Trustees, Appeal No. 20-1012, the Federal Circuit held that a claim directed to an innovative mathematical process to generate data was a patent-ineligible algorithm that lacked any improvement of a technological process under the two-step Alice inquiry.

The Board of Trustees of the Leland Stanford Junior University (“Stanford”) filed an application directed to an improved method of processing data about a person’s genetic makeup in order to identify the parent from whom a gene was inherited. The Examiner rejected the claims for being directed to patent-ineligible abstract mathematical algorithms, and the Board affirmed under the two-step Alice inquiry.

The Federal Circuit led with the long-established principle that “mathematical algorithms for performing calculations, without more, are patent ineligible.” The court then characterized Stanford’s innovation as being mathematical analysis and noted that the claim recited generic computer hardware and required no concrete application for using the data. In an effort to rebut the Board’s Alice findings, Stanford argued that the claim was a novel, specific application that provided more information than previous methods and therefore was not an abstract idea. The Federal Circuit rejected this argument, holding that even if this was an improved data-generating process, it was still directed to an abstract mathematical calculation that failed to improve a technological process under the Alice inquiry. Stanford then argued that the Board failed to assess the elements of the claim as an ordered combination. Again, the Federal Circuit rejected this argument, reasoning that Standard failed to explain how the ordered combination of data processing elements moved the claimed subject matter from an abstract idea to a practical application. As the claims were drawn to patent ineligible subject matter, the court affirmed the Board’s decision.

Stanford’s Computer Models – Inventive for Parents, but not for Patents

In In Re: Board of Trustees of the Leland Stanford Junior University, Appeal No. 20-1288, the Federal Circuit held that the specific combination of purely mathematical steps in a claim is not inventive enough to make mathematical algorithms and mental processes patent eligible.

Stanford University filed a patent for a computerized statistical model for determining Haplotype phases, which can help predict which parent gave a child a certain gene. The examiner rejected the claims on the grounds that they involve patent ineligible subject matter. Stanford appealed to the Patent Trial and Appeal Board (“PTAB”), arguing that their use of a particular statistical tool as well as the specific ordered combination of steps in the claims, improved on existing statistical models. Stanford argued these improvements transformed the claim into patent-eligible material. The PTAB disagreed and found that the claims consisted entirely of patent-ineligible mathematical algorithms and mental processes under an Alice analysis. The PTAB also held that the claims did not introduce additional limitations that provided an inventive concept under Alice, and affirmed the rejection of the claim.

The Federal Circuit affirmed the Board’s decision. The Federal Circuit considered Stanford’s argument that the ordered combination of the steps was important to the improved efficiency and accuracy of the model, but found that the claims were merely abstract mental processes that did not require computer functionality. Thus, because the claims were directed entirely to mathematical concepts, and the ordered combination did not introduce additional limitations, all claims were patent ineligible under Alice.

Other Available Languages:
March 2021 Federal Circuit Newsletter (Japanese)
March 2021 Federal Circuit Newsletter (Chinese)

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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