Section 112 Invalidity Of The ‘955 Patent Claims

A. Claim 9

Claim 9 of the ‘955 patent as approved by the PTO for issuance, reads as follows:

A method for performing contextual searches on an Internet Phone (IP) phone comprising the steps of:

• receiving a command to perform a contextual search;
• receiving search criteria from a user of said IP phone;
• submitting said search criteria to a server coupled to said IP phone; and
• receiving from said server a list of merchants matching said search criteria and information regarding each of said merchants in said list;
• wherein said user completes a transaction with at least one of said merchants listed without the need to generate a voice call;
• wherein said information received by said user comprises a variety of offers, wherein said user selected one of said variety of offers associated with said one of said merchants listed, wherein said selected offer is transmitted to said one of said merchants listed electronically;
• and wherein said user’s contact and payment information is not transmitted to said one of said merchants listed, wherein said user’s contact and payment information is available to said one of said merchants listed. (emphasis added)

However, as issued, Claim 9 omitted the method step set out in boldface type. Claim 9, uncorrected, fails to delineate the no-call feature as intended by Plaintiff and approved by the PTO. Therefore, the District Court reasoned, Claim 9 does not “adequately perform [its] function of notifying the public of the patentee’s right to exclude,” citing Solomon v. Kimberly-Clark Corp., 216 F.3d 1372, 1379 (Fed. Cir. 2000)); and Allen Engineering Corp. v. Bartell Industries, Inc., 299 F.3d 1336, 1349 (Fed. Cir. 2002) (holding that when the plain language of the claims are inconsistent with the specification, the claims are invalid for not properly claiming what the inventor regards as his invention).

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Procedural Background

We’re talking about H-W Technology, L.C. v. Overstock.com., Inc., 111 USPQ 2nd 1727 (Fed. Cir. July 11, 2014). Plaintiff H-W Technology (“H-W”) appealed from an order of the U.S. District Court for the Northern District of Texas granting summary judgment in favor of Defendant Overstock.com (“Overstock”). In its appeal, H-W challenged the District Court’s holding that claims 9 and 17 of its U.S. Patent No. 7,525,955 (“’955 patent”) are indefinite and therefore invalid under Section 112.

The ‘955 patent is directed to an app that enables a smartphone to receive offers from merchants and to complete transactions without having to generate a voice call. It contains 24 patent claims, consisting of three independent claims (Claims 1, 9, and 17) and 21 dependent claims.

In March 2012, Plaintiff filed this patent infringement action, and Defendant filed a counterclaim seeking a declaration that the ‘955 patent is invalid and unenforceable. In October 2012, Overstock notified H-W that claim 9, as issued, was missing a limitation. H-W obtained a certificate of correction from the PTO in May 2013 and subsequently submitted it to the District Court. In the meantime, the parties had completed their summary judgment and claim construction briefing. A few months later, the District Court construed the claims and granted summary judgment of invalidity, holding that claims 9 and 17 are indefinite. H-W Tech., LC v. Overstock.com. Inc., 973 F. Supp. 2d 689, 690 (N.D. Tex. 2013).

Indefiniteness Under Section 112

Under Section 112, paragraph 2 of the Patent Act, a claim must “particularly point out and distinctly claim the subject matter which the applicant regards as his invention,” or else, it’s indefinite and invalid. Halliburton Energy Servs., Inc. v. M-I LLC, 514 F.3d 1244, 1249 (Fed. Cir. 2008). The definiteness requirement of Section 112, paragraph 2 is intended to ensure that the claims “provide clear warning to others as to what constitutes infringement of the patent” Chisum on Patents, § 8.03, at 8-14 (2000).

A claim is presumed valid and is therefore only indefinite if it is “insolubly ambiguous, and no narrowing construction can properly be adopted.” Exxon Research & Eng’g v. U.S., 265 F.3d 1371, 1375 (Fed. Cir. 2001). Whether a claim is indefinite and therefore invalid is a question of law for the court. Amtel Corp. v. Info Storage Devices, Inc., 198 F.3d 1374, 1378 (Fed. Cir. 1999). However, “[t]o the extent there are any factual findings upon which a trial court’s indefiniteness conclusion depends, they must be proven by the challenger by clear and convincing evidence.” Technology Licensing Corp. v. Videotek, Inc., 545 F.3d 1316, 1338 (Fed. Cir. 2008).

A. Correction of Errors in Claims

“It is not [a court’s] function to rewrite claims to preserve their validity.” Allen Engineering, Corp., 299 F.3d 1336, 1349. While courts cannot “rewrite claims to correct material errors”, Energizer Holdings, Inc. v. Int’l Trade Comm’n, 435 F.3d 1366, 1370 (Fed. Cir. 2006), they do have the authority to correct “obvious minor typographical and clerical errors in patents.” Novo Indus., L.P. v. Micro Molds Corp., 350 F.3d 1348, 1357 (Fed. Cir. 2003). An error is correctable by a district court only where “the error is evident from the face of the patent.” Novo Indus., L.P., 350 F.3d at 1357. Even then, “[a] district court can correct a patent only if (1) the correction is not subject to reasonable debate based on consideration of the claim language and the specification and (2) the prosecution history does not suggest a different interpretation of the claims.” Id.

B. The Effect of a Certificate of Correction

Certificates of correction are governed by 35 U.S.C. § 254, which states:

Whenever a mistake in a patent, incurred through the fault of the Patent and Trademark Office, is clearly disclosed by the records of the Office, the Director may issue a certificate of correction… Every such patent, together with such certificate, shall have the same effect and operation in law on the trial of actions for causes thereafter arising as if the same had been originally issued in such corrected form. (Emphasis added)

Based on the plain language of the statute, Federal Circuit has specifically held that “the certificate of correction is only effective for causes of action arising after it was issued.” Sw. Software, Inc. v. Harlequin Inc., 226 F.3d 1280, 1294–95 (Fed. Cir. 2000).

Section 112 rejections are the bane of patent practitioners. We’re more comfortable, though by no means happy, with Section 102 and 103 rejections, because those involve judgment calls and interpretations, against which we can always make our counter-arguments. But a finding of failure to satisfy Section 112 amounts to an admonition that something essential is missing from our application – indeed, the most essential element – the disclosure of the invention itself.

Section 112 deficiencies are difficult enough to deal with when the fault is our own. But, as a reminder that things could always be worse, consider the following scenario. Your claims as written do satisfy Section 112, your patent is issued, and sometime later you file an enforcement action against an infringer. After a few months, your adversary informs you that one of the claims you are asserting against his client was misprinted by the Patent Office in issuing the patent, and that the misprint deleted a material claim limitation. That means your claim is invalid and unenforceable, your adversary argues.

Basic notions of fairness and equity would lead you to believe initially that your client should not be penalized for something that was totally not its fault or yours. After all, in this case the absence of the deleted language was not obvious from reading the claims, and the trial court should surely recognize the error and correct it. But the trial court, citing valid precedent, holds that it’s precisely the non-evident nature of the error that precludes judicial correction of the claim. It’s just one of those situations in which strict adherence to the logic of the law leads to an illogical outcome. So it turns out that the less likely it would have been for you to detect the printing error upon reviewing the issued patent, the more likely you will be denied relief to correct the error.

Nevertheless, you remain undaunted in the face of this bizarre turn of events and petition the Patent Office to issue a certificate of correction, which you duly submit to the court. But the court ignores it, ruling that your restored claim can only be asserted in a cause of action arising after the certificate was issued, and hence it has no effect in your pending lawsuit. Becoming desperate at this point, you reach out for one last lifeline and ask the court to enforce the claim as erroneously issued. Completing the Catch-22 script, the court then holds that, because the issued claim omits a material limitation and the omission is not evident on the face of the patent, the uncorrected claim fails to satisfy Section 112 and cannot be asserted.

And so, due to a printing error by the Patent Office – one that was not even evident on the face of the patent – you forfeit the right to enforce your claim against an infringer. Admittedly, the foregoing set of facts represents a “perfect storm” unlikely to recur too often. Yet this case raises a number of warning flags that all of us would do well to recognize.