Federal Circuit No. 2014-1392

EON asserted U.S. Patent No. 5,663,757 (the ‘757 patent) against numerous defendants in two separate actions. The District Court granted motion for summary judgment, holding all claims of '757 patent invalid as indefinite under 35 U.S.C. §102(b), because specification failed to disclose an algorithm to provide structure for eight separate computer-implemented means-plus-function elements. The Federal Circuit affirmed.

The ‘757 patent 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, e.g., "impulse purchase transactions with immediate payment," audience participation voting, and sorting television programs by theme. The claim terms at issue include: 

  1. "means under control of said replaceable software means for indicating acknowledging shipment of an order from a remote station" (claim 7)
  2. "means controlled by replaceable software means operable with said operation control system for . . . reconfiguring the operating modes by adding or changing features and introducing new menus" (claims 1-6, 8-10)
  3. "means responsive to said self contained software for establishing a mode of operations for selection of one of a plurality of authorized television programs" (claim 8)
  4. "means establishing a first menu directed to different interactively selectable program theme subsets available from said authorized television program channels" (claim 8)
  5. "means for causing selected themes to automatically display a second menu" (claim 8)
  6. "means controlled by replaceable software means operable with said operation control system for establishing and controlling a mode of operation that records historical operating data of the local subscriber's data processing station" (claim 9)
  7. "means controlled by replaceable software means operable with said operat[ion] control system for establishing and controlling fiscal transactions with a further local station" (claim 10)
  8. "means for establishing an accounting mode of operation for maintaining and reporting fiscal transactions incurred in the operation of the local subscriber's data processing station" (claim 10)

It was undisputed that all claim terms at issue are means-plus-function terms governed by 35 U.S.C. §112 ¶6, and that the functions claimed in the terms at issue are performed by computer software. In its analysis, the Federal Circuit indicated that the corresponding structure for a function performed by a software algorithm is the algorithm itself – see WMS Gaming, Inc. v. Int'l Game Tech., 184 F.3d 1339, 1348-49 (Fed. Cir. 1999).

EON did not dispute that specification of '757 patent discloses no algorithms, and that the only disclosed structure is a microprocessor. Instead, EON relied on an exception to algorithm rule created in In re Katz Interactive Call Processing Patent Litigation, 639 F.3d 1303 (Fed. Cir. 2011). In that case, the court held that a standard microprocessor can serve as sufficient structure for "functions [that] can be achieved by any general purpose computer without special programming." Katz at 1316. In particular, the court determined that basic "processing," "receiving," and "storing" functions are not indefinite, but other terms involving conditionally coupling calls were indefinite, because those functions required special programming and no algorithm was disclosed. Katz at 1315.

Based on Katz, EON argued that the functions claimed in the '757 patent are relatively simple to implement, and therefore, these functions fall within Katz exception as not involving "special programming"; and further, that a microprocessor can serve as sufficient structure for software function if a person of ordinary skill in the art could implement the software function.

However, the Federal Circuit disagreed, finding that a microprocessor can serve as structure for a computer-implemented function only where the claimed function is "coextensive" with a microprocessor itself, such as, for example, "receiving" data, "storing" data, and "processing" data. Further, the court held that "special programming" does not denote a level of complexity, but instead only whether functionality is coextensive with microprocessor or general purpose computer; and that the person of ordinary skill in the art "plays no role whatsoever in determining whether an algorithm must be disclosed as structure for a functional claim element," because that analysis relates to the enablement requirement of 35 U.S.C. §112, ¶1, not to the definiteness requirement of 35 U.S.C. §112, ¶2 and ¶6, which is the proper question in this case.

Based on the above, the court found that each of the eight claim terms recites "complicated, customized computer software," and that EON does not argue that claim terms recite functions that are "coextensive" with a microprocessor, and further, that "special code would have to be written in order to accomplish the claimed functionality." Therefore, in view of failure to disclose algorithms in specification, the claim terms are indefinite.