In Trading Technologies International, Inc. v. Open E Cry, LLC, No. 12-1583 (Fed. Cir. Aug. 30, 2013), the Federal Circuit reversed entry of SJ that (1) the asserted claims of Trading Technologies International, Inc.'s ("TT") U.S. Patent Nos. 7,676,411 ("the '411 patent"), 7,693,768 ("the '768 patent"), 7,904,374 ("the '374 patent"), and 7,685,055 ("the '055 patent") are invalid for failure to comply with the written description requirement of 35 U.S.C. § 112; and (2) prosecution history estoppel bars TT from asserting the '055 patent against software products. The district court premised both holdings on deference to the Federal Circuit's prior decision in Trading Technologies International, Inc. v. eSpeed, Inc., 595 F.3d 1340 (Fed. Cir. 2010) ("eSpeed"), which considered two related patents from TT's portfolio. Here, because the Federal Circuit concluded that eSpeed does not control, the Court reversed and remanded for further proceedings.
TT owns a number of related patents generally directed to software used for electronic trading on a commodities exchange, including the '411, '768, '374, and '055 patents. Those four patents are continuations of and claim priority from U.S. Patent No. 6,772,132 ("the '132 patent"). Accordingly, the '411, '768, and '374 patents share a common written description matching that of the '132 patent in all material respects. In contrast, the '055 patent traces its priority from the '132 patent as a continuation-in-part and contains new matter relative to the original written description of the '132 patent.
In eSpeed, the Federal Circuit considered, inter alia, the correct construction of certain claim terms used in the '132 patent and in another of its descendants, U.S. Patent No. 6,766,304 ("the '304 patent"). The '304 patent, like the '411, '768, and '374 patents, shares the written description of the parent '132 patent. In eSpeed, each of the asserted claims required a graphical user interface having a "static" display of market price information. The district court had construed that term to require "a display of prices comprising price levels that do not change positions unless a manual re-centering command is received," and the Federal Circuit adopted that construction on appeal. Slip op. at 7-8 (quoting eSpeed, 595 F.3d at 1352).
While the written descriptions of the '411, '768, and '374 patents match those of the earlier '132 and '304 patents, the '411, '768, and '374 patents claim trading methods and software without limitation to a "static" price column display. Moreover, during prosecution of the '055 patent, TT added new disclosures to the '132 patent's written description that were aimed at redefining the term "static" as used in the '055 patent. The claims of the '055 patent recite steps that include displaying "a static price axis" and "automatically repositioning the static price axis on the graphical user interface."
Open E Cry, LLC and other consolidated defendants submitted a SJ motion as to whether the claims of the '411 patent satisfied the written description requirement of 35 U.S.C. § 112(a) in light of eSpeed, and whether prosecution history estoppel barred TT from asserting infringement of the '055 patent under the DOE as to products with price columns that move automatically.
The district court concluded that eSpeed required holding the claims of the '411 patent invalid for lack of written description. In granting the motion for SJ, the district court expressly declined to evaluate the parties' evidence or make its own findings on the merits because the court determined "as a matter of law that the eSpeed Decision controls." Slip op. at 13 (quoting Trading Techs. Int'l, Inc. v. BCG Partners, Inc., 852 F. Supp. 2d 1027, 1038 n.9 (N.D. Ill. 2012) ("SJ Order")). In addition, the district court held that eSpeed's application of prosecution history estoppel to the '132 and '304 patents applied equally to the '055 patent as a matter of law. The district court noted that the '055 patent claims "include the limitation of 'common static price axis,' just like the '304 patent, and flow from . . . a similar specification." Id. (quoting SJ Order, 852 F. Supp. 2d at 1046-47). The grant of SJ rendered invalid most claims of TT's '411, '768, '374, and '055 patents for failing to satisfy the written description requirement of § 112.
"[O]ur decision in
eSpeed did not thereby determine
whether the same written description would also support different
claims drawn to a non-'static' display. In
particular, we did not make 'findings regarding the
specification . . . that are dispositive' as to the present
written description challenge." Slip op. at 18-19
(quoting SJ Order, 852
F. Supp. 2d at 1044).
On appeal, the Federal Circuit concluded that the district court placed undue reliance on eSpeed and thus erred when it held TT's claims invalid without considering the scope of the claims in light of the underlying disclosures. The Court concluded that the claims of the '411, '768, '374, and '055 patents are different from those at issue in eSpeed, and eSpeed's ruling on claim construction should not govern the written description inquiry.
Regarding the '411, '768, and '374 patents, the Federal Circuit asked whether the patents' common disclosure provides adequate support for claims not limited to displays with "static" price axes, i.e., claims broad enough to encompass some form of automatic recentering. The Federal Circuit distinguished the doctrines of claim construction and written description, which the Court described as "separate issues that serve distinct purposes." Id. at 17. In eSpeed, the Court had concluded that the disputed claim term should be limited to require a manual recentering command in the claims of the '132 and '304 patents. But the Federal Circuit did not thereby determine whether the same written description would also support different claims drawn to a non-"static" display.
In the present appeal, the Federal Circuit expressed no opinion as to whether or not the claims of the '411, '768, and '374 patents satisfy the written description requirement, but reversed and remanded for the district court to make that determination based on a review of the disclosures underlying those particular claims. The Court held only that eSpeed did not settle the issue.
The Federal Circuit found fault with the invalidity determination with regard to the '055 patent for the same reasons. In addition, because the '055 patent was filed as a continuation-in-part, which allowed TT to disclose and claim additional subject matter, the Court found that the '055 patent differed from the patents-at-issue in eSpeed, and its written description was never considered in that case. The Federal Circuit found unambiguous support in the '055 patent for claims requiring "automatically repositioning the static price axis," and ruled that the '055 patent's written description reasonably conveyed to those skilled in the art that the inventor had possession of the claimed subject matter as of its filing date. Accordingly, the Court concluded that TT was entitled to SJ that the claims of the '055 patent have not been proven invalid by clear and convincing evidence for lack of adequate written description. The Court reversed the district court's SJ of invalidity and its denial of TT's cross-motion regarding the '055 patent claims.
Turning to the issue of prosecution history estoppel, the Federal Circuit concluded that the intrinsic record specific to the '055 patent distinguishes eSpeed. The Court found that the subsequent disclosures in the '055 patent include disclosures that were not present in the '132 or '304 patents, and those directly contradict the prosecution-based surrenders of claim scope discussed in eSpeed. The Court noted, for example, that the '055 patent states that "static does not mean immovable," and describes "automatically repositioning the static price axis upon detecting a predetermined condition." Id. at 24-25 (citations omitted). Furthermore, the Court found that the claims of the '055 patent lack the "do not move" limitations that accompanied the term "static" in the '132 and '304 patents. Rather, the Court found that the claims of the '055 patent contain express language requiring automatic movement of the static price axis. Finally, in the Court's view, TT made clear during prosecution of the '055 patent that the "static" price axis described and claimed in the '055 patent was not limited to manual recentering. In sum, the Court concluded that, while it retains the "static price axis" claim language of its predecessors, the '055 patent thus differs from the '132 and '304 patents in both its claims and its relevant supporting disclosures on the issue of automatic recentering, and those differences render eSpeed's earlier prosecution-based restrictions inapplicable. Accordingly, the Court reversed the district court's decisions granting SJ that prosecution history estoppel applies to the '055 patent, and denying TT's cross-motion related to that issue.
Judges: Lourie (author), Plager, Benson (sitting by designation)
[Appealed from N.D. Ill., Judge Kendall]
This article previously appeared in Last Month at the Federal Circuit, September 2013
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