Intellectual Property Report: March 2012

03/02/2012 / Intellectual Property Group

More Guidance From The Federal Circuit On How Claim Limitations Involving Computers Apply In The § 101 Analysis
By Glenna L. Gilbert

In Fort Properties, Inc. v. American Master Lease LLC, 2009-1242,the Federal Circuit recently considered whether otherwise patent-ineligible claims are patentable under § 101 because they contain a limitation requiring a computer to perform a certain step.

The patent at issue (“the ’788 patent”) describes an investment tool designed to enable property owners to buy and sell properties without incurring tax liability. All claims in the ’788 patent are method claims. Claim 1 discloses:

A method of creating a real estate investment instrument adapted for performing tax-deferred exchanges comprising:

aggregating real property to form a real estate portfolio;  

encumbering the property in the real estate portfolio with a master agreement; and

creating a plurality of deedshares by dividing title in the real estate portfolio into a plurality of tenant-in-common deeds of at least one predetermined denomination, each of the plurality of deedshares subject to a provision in the master agreement for reaggregating the plurality of tenant-in-common deeds after a specified interval.

Claim 32 is nearly identical to claim 1, but also contains a limitation requiring a computer to “generate a plurality of deedshares.”

As to the non-computer limitations of the claims, the Court held that the ties to deeds, contracts, and real property were insufficient to render the claims patentable under § 101. The claims of the ’788 patent disclose an investment tool designed to enable tax-free exchanges of property. According to the Court, this is an abstract idea. And under Bilski, this abstract idea cannot be transformed into patentable subject matter merely by connecting to the physical world through deeds, contracts, and real property.

Claim 32, with its computer limitation, did not save the patent either. At claim construction, the defendant agreed that “using a computer” meant merely “operating an electronic device that features a central processing unit.” In the Court’s view, such a broad and general limitation does not “‘impose meaningful limits on the claim’s scope.’” That is, the computer limitation in the ’788 patent claims is simply insignificant post-solution activity that does not render the otherwise patent-ineligible claims patentable under § 101.

In reaching its decision, the Federal Circuit drew upon its own recent precedent on how claim limitations involving computers apply in the § 101 analysis. The Court looked to its Cybersource Corp. v. Retail Decisions Inc. decision in which the Court explained that a process claim drawn to an abstract idea is not changed by claiming the process’s performance by computers, or by claiming the process embodied in program instructions on a computer-readable medium. The use of the machine must impose meaningful limits on the claim’s scope.

As an example of meaningful limits, in Ultramercial, LLC v. Hulu, LLC, the claimed invention “‘require[d] intricate and complex computer programming’” and “‘specific application to the Internet and a cybermarket environment.’” According to the Ultramercial Court, the addition of the computer to the claims was not merely insignificant post-solution activity; rather, the invention itself involved advances in computer technology. 

Conversely, in Dealertrack, Inc. v. Huber, the Federal Circuit held that claims to a method of applying for credit did not satisfy § 101 even though the claims contained a limitation requiring the method to be “computer aided.” The Dealertrack claims were silent as to how, or to what extent, the computer aided the method, or the significance of a computer to the performance of the method.

In essence, the Dealertrack claims recited only that the method was “computer aided,” and like the ’788 patent claims, did not specify any level of involvement or detail. According to the Court, the computer limitations of the ’788 patent, like the computer limitation in Dealertrack, does not play a significant part in permitting the claimed method to be performed.

For more information on the subject of this article, contact the author of this article, or the Larkin Hoffman attorney who customarily handles your matters. Larkin Hoffman Daly & Lindgren Ltd. has proudly served the legal and business counseling needs of clients since 1958. The firm includes over 70 attorneys serving clients’ legal needs throughout the state, the country and around the globe. As a full-service law firm, it provides counsel and legal guidance in more than 20 areas of law to clients ranging from individuals to emerging companies and Fortune 500 corporations.

While the information provided in this publication is believed to be accurate, it is general in nature and should not be construed as legal advice. You should consult an attorney for advice regarding your individual situation. 
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Federal Circuit Reaffirms Rules of Claim Construction in Thorner v. Sony Computer Entertainment
By John Kvinge

In Thorner v. Sony Computer Entertainment, 2011-1114 (Fed. Cir. 2012), the Federal Circuit recently reaffirmed some of the rules of claim construction described in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005)(en banc). The patent in Sony described a tactile feedback system for video game controllers. The patent claimed vibrations created by a series of actuators that were “attached” to a flexible pad. 

Sony argued that the term “attached” could only mean “affixed to the outer surface” of an object. Sony pointed to the fact that the patent used the term “embedded” elsewhere in the claim to describe actuators attached inside other objects. The patentee claimed that “attached” could mean affixing an item to either an interior or exterior surface, and argued that “embedded” is just a narrower term that covers only an attachment to an interior surface. Thus, in the patentee’s view, something that was embedded was also attached, but something that was attached was not necessarily embedded. 

The district court concluded that the term “attached” was implicitly redefined by the way the term was used in the embodiments in the specification. The district court agreed with Sony that only external attachments were included within the term “attached.” Based on this definition of “attached,” the parties stipulated to non-infringement, but preserved the ability to challenge the court’s claim construction on appeal.

The Federal Circuit provides specific guidance to district courts engaged in claim construction. In construing patent claims, courts are required to give words their ordinary and customary meaning as understood by a person of ordinary skill in the art when read in the context of the specification and prosecution history. There are only two exceptions to this rule. First, when a patentee provides a specific definition for a term, the Court will use the patentee’s definition even if it is different than the term’s plain and ordinary meaning. The second exception allows a patentee to specifically disavow the full scope of the claim in the patent specification or during prosecution.

The Federal Circuit noted in Sony that to fall under the first exception, “[i]t is not enough for a patentee to simply disclose a single embodiment or use a word in the same manner in all embodiments, the patentee must clearly express an intent to redefine the term.” The second exception is likewise very narrow, requiring “expressions of manifest exclusion or restriction, representing a clear disavowal of claim scope.” Thus, limitations in an embodiment disclosed in the patent specification (or even a limitation present in all of the embodiments) cannot be implicitly transferred into the claims to redefine words, unless the patentee makes “a clear and unmistakable disclaimer” in the form of a “clear and explicit statement.” 

Applying these rules of construction to the question at hand, the Federal Circuit held that “attached” was to be given its “plain and ordinary meaning which encompasses either internal or external attachments.” Therefore, the district court erred when it decided that “attached” meant “affixed to the outer surface,” and limiting the claim was improper because the patentee had not clearly redefined “attached” or disavowed internal attachments.

For more information on the subject of this article, contact the author of this article, or the Larkin Hoffman attorney who customarily handles your matters. Larkin Hoffman Daly & Lindgren Ltd. has proudly served the legal and business counseling needs of clients since 1958. The firm includes over 70 attorneys serving clients’ legal needs throughout the state, the country and around the globe. As a full-service law firm, it provides counsel and legal guidance in more than 20 areas of law to clients ranging from individuals to emerging companies and Fortune 500 corporations.

While the information provided in this publication is believed to be accurate, it is general in nature and should not be construed as legal advice. You should consult an attorney for advice regarding your individual situation.
 
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Contact Our Intellectual Property Group:

Thomas J. Oppold, Department Chair | 952-896-3397 | toppold@larkinhoffman.com
John A. Cotter | 952-896-3340 | jcotter@larkinhoffman.com
Molly T. Eichten | 952-896-1545 | meichten@larkinhoffman.com
Glenna L. Gilbert | 952-896-3283 | ggilbert@larkinhoffman.com
Jose W. Jimenez | 952-896-3203 | jjimenez@larkinhoffman.com
John A. Kvinge | 952-896-1554 | jkivinge@larkinhoffman.com
Craig J. Lervick | 952-896-3245 | clervick@larkinhoffman.com
Jerry S. Podkopacz | 952-896-3262 | jpodkopacz@larkinhoffman.com
James P. Quinn | 952-896-3309 | jquinn@larkinhoffman.com
Ryan C. Smith | 952-896-6703 | rsmith@larkinhoffman.com