United States: Claim Missing Material Limitation That Is Not Apparent On Its Face Cannot Be Asserted Until It Has Been Corrected By The PTO

In H-W Technology, L.C. v. Overstock.com, Inc., Nos. 14-1054, -1055 (Fed. Cir. July 11, 2014), the Federal Circuit affirmed the district court's determination that claim 17 of U.S. Patent No. 7,525,955 ("the '955 patent") was invalid and vacated the district court's determination that claim 9 of the '955 patent was invalid.

H-W Technology, L.C. ("H-W") owns the '955 patent, which relates to an apparatus and method for performing "contextual searches on an Internet Protocol (IP) Phone."  Slip op. at 2 (citation omitted). The '955 patent specification describes an "IP Phone" as "a telephone which can operate and execute voice communication in the same way as conventional telephones either via a Plain Old Telephone System (POTS) or an IP network."  Id. (citation omitted).

H-W sued Overstock.com, Inc. ("Overstock"), alleging infringement of the '955 patent.  A few months after H-W submitted its infringement contentions, Overstock notified H-W that the issued version of claim 9 was missing a limitation.  H-W eventually obtained a certificate of correction from the PTO and submitted it to the district court after the parties completed SJ and claim construction briefing.  The district court then construed the claims and granted SJ that claims 9 and 17 were indefinite.  H-W appealed.

"When, as here, a claim issues that omits a material limitation, and such omission is not evident on the face of the patent, the patentee cannot assert that claim until it has been corrected by the PTO.  To hold otherwise would potentially permit patentees to assert claims that they never asked for nor rightly attained."  Slip op. at 9.

On appeal, the Federal Circuit affirmed the district court's construction of the terms "user of said phone" and "said user" to mean "a consumer operating the IP Phone."  Id. at 3 (quoting H-W Tech., LC v. Overstock.com, Inc., No. 12-cv-0636, 2013 WL 5314355, at *1 (N.D. Tex. Sept. 23, 2013)).  The Court rejected H-W's argument that the "user of said phone" could be a "thing" and agreed with the district court that the "user" is limited to a human consumer based on the claim language, the specification, and the extrinsic evidence.  Id. at 4.  The Court noted that the claims refer to "said user's contact and payment information," which a "thing" would not be expected to possess.  Id. (citation omitted).  The Court also considered portions of the specification that referred to a user's finger, indicating that the user is a person, and that equated "user" with "consumer."  Id. (citation omitted).   The Court also considered extrinsic evidence from the inventors' testimony that referred to the user as a person and a dictionary definition of "user."  The Court then rejected H-W's proposed construction as being supported by only "a single, arguably marginally applicable, dictionary definition," and affirmed the district court's construction as supported by the claims, the specification, and the weight of extrinsic evidence.  Id. at 5.

The Court next considered whether it was proper for the district court to refuse to correct claim 9 to add the missing limitation without waiting for a certificate of correction.  The Court explained that a district court can correct a patent only if the error was evident from the face of the patent.  Although the parties agreed that the error was clear from the prosecution history, the Court determined that the error was not evident from the face of the patent because uncorrected claim 9 read coherently without the missing limitation and nothing in the surrounding claim language indicated the limitation was missing.  The Court also explained that language in the specification similar to the missing limitation was optional, negating H-W's argument that the language was impliedly necessary to the invention.  Thus, the Court held that the district court did not have authority to correct claim 9 and properly declined to do so.

The Court then considered whether the district court properly declined to consider the certificate of correction in deciding whether H-W could assert either the corrected or uncorrected versions of claim 9.  Relying on the plain language of the statute, the Court determined that a certificate of correction is only effective for causes of action arising after the certificate is issued.  The Court observed that H-W had not alleged any causes of action occurring after the certificate of correction was issued and had not amended its complaint to reflect the corrected version of claim 9.  Thus, the Court held that the district court was correct not to consider the certificate of correction when determining if H-W could assert claim 9.  

Next, the Court examined whether H-W could assert either the corrected version or uncorrected version of claim 9 in this action.  The Court held that when a claim issues that omits a material limitation and the omission was not evident from the face of the patent, the patentee cannot assert the claim until it has been corrected by the PTO.  Allowing H-W to assert the uncorrected version of the claim would, in the Court's opinion, "potentially permit patentees to assert claims that they never asked for nor rightly attained."  Id. at 9.  The Court held that the district court correctly concluded that H-W could not assert either the original or the corrected claim 9 in this lawsuit.  The Court, however, also struck the portion of the district court's judgment finding that corrected claim 9 was invalid because the corrected version of claim 9 had not yet been litigated, and therefore had not been held invalid.

Lastly, the Court considered and affirmed the district court's finding that claim 17 was invalid for indefiniteness.  The Court determined that claim 17 combined two statutory classes of invention because it is an apparatus claim that includes the method limitations "wherein said user completes a transaction" and "wherein said user selects one of said variety of offers."  Id. at 11 (citation omitted).  The Court explained that it had held apparatus claims with method steps indefinite because it is unclear when infringement occurs.  The Court observed that the language in claim 17 was "nearly identical" to limitations in IPXL Holdings, L.L.C. v. Amazon.com, Inc., 430 F.3d 1377 (Fed. Cir. 2005), and In re Katz Interactive Call Processing Patent Litigation, 639 F.3d 1303 (Fed. Cir. 2011), in which the Court determined that the claims were indefinite.  Slip op. at 13.  Thus, the Court affirmed the district court's finding that claim 17 was invalid.

Accordingly, the Court affirmed the district court's construction of the term "user," vacated the district court's finding that claim 9 was invalid, and affirmed the district court's finding that claim 17 was invalid for indefiniteness.

Judges:  Prost (author), O'Malley

[Appealed from N.D. Tex., Senior Judge Fish]

This article previously appeared in Last Month at the Federal Circuit, August, 2014.

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