Jessica M. Karmasek May 15, 2015, 12:00pm



WASHINGTON (Legal Newsline) - The U.S. Court of Appeals for the Federal Circuit cracked down on a vague software patent in a ruling last week.




 




The Federal Circuit, which hears all U.S. patent appeals, affirmed a decision by the U.S. District Court for the District of Delaware in two cases brought by EON Corp. IP Holdings LLC.




 




At issue is EON’s U.S. Patent No. 5,663,757. The patent, which was issued to EON in 1997, is directed to software embodied in a “local subscriber data processing station” that operates in tandem with a television to interconnect various interactive features of the television.




 




The software allows actions such as “impulse purchase transactions with immediate payment,” audience participation voting and sorting programs by theme.




The company -- for which a website or contact information could not be found -- believes the modern iteration of the ‘757 patent’s local subscriber data processing station is a “smartphone with certain capabilities.”




 




So, in September 2010, it filed a lawsuit against 17 different defendants, including smartphone manufacturers, cellular network providers and smartphone content providers. Among them: FLO TV Inc., Sprint Nextel Corp. and HTC America Inc.




 




Then, nine months later, in June 2011, EON sued several more defendants in a separate action, including AT&T Mobility Inc.




 




The two cases eventually were consolidated through claim construction.




 




At the same time, the ‘757 patent went through two reexaminations. The claims were amended in the first reexamination, and all claims as amended were confirmed in the second reexamination.




 




As a result, in November 2013, defendants in the FLO TV action moved for summary judgment of invalidity for indefiniteness. To resolve the motion, the district court held a claim construction hearing and a summary judgment hearing in January 2014, and a hearing to receive expert testimony a month later.




 




Soon after the hearings, the district court granted summary judgment to the FLO TV defendants, finding that all claims of the ’757 patent were invalid as indefinite.




 




Following its summary judgment order, the district court entered final judgment of invalidity in the FLO TV case.




 




The parties in the AT&T case then entered into a joint stipulation to final judgment of invalidity, which the district court granted.




 




EON appealed to the Federal Circuit.




 




A three-judge panel of the Federal Circuit -- Chief Judge Sharon Prost and judges Pauline Newman and William Curtis Bryson -- agreed with the district court that the specification failed to disclose an algorithm to provide structure for various computer-implemented means-plus-function elements.




 




“Resolution of this case is straightforward,” Prost wrote in the May 6 opinion. “The district court made explicit factual findings, based on expert testimony, that each of the eight claim terms at issue recited complicated, customized computer software.




 




“We see no clear error in any of the district court’s factual findings, nor any error in the district court’s ultimate conclusion of indefiniteness.”




 




Prost noted that EON does not contend on appeal that the terms at issue recite functions that are coextensive with a microprocessor.




 




EON also does not differentiate between any of the claim terms in its argument, the chief judge said.




 




“In fact, EON cites to testimony from its expert that a person skilled in the art would need to consult algorithms outside the specification to implement the claimed functions,” she wrote in the 14-page ruling. “Similarly, based on expert testimony, the district court found that ‘special code would have to be written in order to accomplish the claimed functionality.’




 




“This finding proves more than is necessary, as the defendants must only show by clear and convincing evidence that the terms at issue do not recite basic functions of a microprocessor.”




 




The ruling comes nearly a year after the U.S. Supreme Court overruled the Federal Circuit in Nautilus Inc. v. Biosig Instruments Inc., rejecting the court’s test for determining whether a patent claim is sufficiently “definite.”




 




The nation’s high court, in its June 2, 2014 opinion, said patent claims must be clear.




 




In particular, the court said the Federal Circuit’s standard was wrong, in that it would create “powerful incentives to inject ambiguity” into claims.




 




“In place of the ‘insolubly ambiguous’ standard, we hold that a patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecu­tion history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention,” Justice Ruth Bader Ginsburg wrote in the unanimous ruling.




 




From Legal Newsline: Reach Jessica Karmasek by email at patents@legalnewsline.com.


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