Holding that material facts precluded summary judgment, the U.S. Court of Appeals for the Federal Circuit recently remanded a district court’s grant of summary judgment of infringement and obviousness. Source Search Technologies, LLC v. LendingTree, LLC et al., Case Nos. 08-1505, -1524 (Fed. Cir., Dec. 7, 2009) (Rader, J.).

On summary judgment, the district court held that the asserted claims of a patent directed to a “computerized procurement service for matching potential buyers with potential vendors over a network” were infringed but invalid on obviousness grounds. The patented method allows the buyer, the seller and the network itself to filter or prioritize results based on qualifications or pre-selected criteria and returns to the buyer a “quotation” for “goods and services.” Based on the district court’s claim construction, the Federal Circuit held that a “quote” required a “price and other terms of a particular transaction in sufficient detail to constitute an offer capable of acceptance.”

In its obviousness analysis, the Federal Circuit held that none of the asserted prior art taught returning such a “quote.” The e-commerce prior art references provided only “non-binding, inventory availability responses, not contractual offers” (emphasis in original) and the brick and mortar references “involved non-fungible, non-commodity services that could not be quantified or quoted immediately over the phone.” Thus, none of the prior art “disclose[d] a qualifying ‘quote’ that is directly forwarded to a client.” In addition, the e-commerce prior art lacked any meaningful filtering process as required by the claimed invention and, while some filtering may be done by human judgment in a brick and mortar system, applying such filtering to an e-commerce system “may not have been a straightforward step.” Since neither the e-commerce prior art references nor the brick and mortar references clearly taught the filtering and quotation limitations, the Court vacated the district court’s grant of summary judgment on obviousness.

Regarding infringement, LendingTree argued that summary judgment was improper because its service lacked the “request for quotation” and “goods and services” limitations. Relying on an analysis similar to its obviousness analysis, the Court held that there were insufficient facts to support the district court’s conclusion that the LendingTree’s website returns an “offer capable of acceptance” to its users. Without the presence of such undisputed facts “showing that [the] LendingTree site provides ‘quotes’” the Court vacated the lower court’s grant of summary judgment. The Court went on, however, to sustain the district court’s ruling that the loans provided by LendingTree met the “goods and services” limitation since a loan is a “standardized” financial operation in which the borrower and lender have a “shared understanding of the promises made and the financial services offered.”

Finally, the Court rejected LendingTree’s arguments that the phrase “goods and services” was indefinite. The Court reasoned that once a specific market is chosen, the “goods and services” at issue become clear. According to the Court, to hold otherwise would unnecessarily burden a patentee by requiring them to “list every possible good or service.”