The U.S. Court of Appeals for the Federal Circuit recently affirmed a district court’s decision, holding that (1) the district court did not have authority to correct an error in a patent claim that was not evident on the face of the patent, (2) the district court properly did not consider a certificate of correction because it issued after the litigation began, and (3) the patent holder could not assert either the original or corrected patent claim in that lawsuit. The error, which was made by the PTO, was only evident from review of the prosecution history and ultimately proved fatal to the plaintiff’s claim.

Any patent monetization effort typically starts with careful review of the patent at issue. But in many instances, problems with a patent may not be evident on the face of the patent itself. Rather, those problems may only become apparent upon careful review of the interactions between the patentee and the U.S. Patent and Trademark Office ("PTO"). Failure to identify potential problems ahead of time can ultimately prove fatal in litigation. For example, in H-W Tech, L.C. v. Overstock, Inc.,1 the United States Court of Appeals for the Federal Circuit affirmed judgment in Overstock's favor where H-W Tech asserted a patent claim containing an error in the as-issued language. Because the error was not evident on the face of the patent, the district court lacked authority to correct the error. Though H-W Tech ultimately corrected the error through the PTO by obtaining a certificate of correction, the district court could not consider it because it issued after the litigation began. Thus, H-W Tech could pursue neither the original claim nor the corrected claim in its lawsuit against Overstock.  


H-W Tech owns U.S. Patent No. 7,525,955, directed to an apparatus and method for performing contextual searches on an Internet Protocol (IP) Phone. When the '955 patent issued in April 2009, the PTO inadvertently omitted a limitation from claim 9. H-W Tech sued Overstock in March 2012, alleging that Overstock's smartphone application infringed claim 9. Overstock alerted H-W Tech to the missing limitation in October 2012, leading H-W Tech to obtain a certificate of correction from the PTO, which issued in May 2013. In the meantime, however, the parties completed summary-judgment and claim-construction briefing. The district court granted summary judgment in Overstock's favor, finding claim 9 invalid for indefiniteness. H-W Tech appealed.  

The Decision

On appeal, H-W Tech argued that the district court erred for two reasons: (1) it had authority to correct the error in claim 9, and (2) it failed to consider the certificate of correction in finding claim 9 invalid. The Federal Circuit rejected both points. 

Addressing the authority of the district court, the Federal Circuit noted that a district court has authority to correct an error in a patent only if the error is evident from the face of the patent. Because claim 9 read coherently despite the missing limitation and nothing in the surrounding claim language indicated missing language, the claim language did not reveal the error. Similarly, the specification—which disclosed the missing limitation as an optional feature of the invention—failed to indicate the error in claim 9. Both parties agreed the error was made plain by the prosecution history. Because, however, the error must be evident from the face of the patent itself for the district court to correct the error, the Federal Circuit held that the district court did not have authority to correct claim 9.

In response to H-W Tech's argument about the certificate of correction, the Federal Circuit cited statutory language and its holding in an earlier case that a certificate of correction is effective only for causes of action arising after the certificate issues. In this case, H-W Tech filed suit before the certificate issued. Further supporting the Federal Circuit's conclusion, H-W Tech never sought to amend the complaint after the certificate issued to reflect the correction of claim 9. Thus, the Federal Circuit held that the district court correctly disregarded the certificate.

Finally, the Federal Circuit noted that H-W Tech should not be permitted to assert the uncorrected claim 9. A contrary finding would result in inequity by permitting patent holders to assert claims they did not rightly obtain from the PTO, and it would undermine the notice function patents are meant to serve. H-W Tech thus could not assert either its original, uncorrected claim 9 or its corrected claim 9 in its lawsuit against Overstock. The Federal Circuit, therefore, affirmed the district court's judgment in favor of Overstock, but struck the invalidity judgment against claim 9, because the corrected claim 9 had not yet been litigated.  

Strategy and Conclusion

This decision illustrates how issues affecting patent enforcement sometimes cannot be addressed after filing a lawsuit and the value in being able to identify and address such issues in advance by extensively analyzing the patent and its prosecution history before filing suit.