United States: Automated Teller Machines: Commission Affirms Summary Determination Of Invalidity Based On Indefiniteness

On May 16, 2016, in an investigation involving automated teller machines (Inv. No. 958), the Commission affirmed the ALJ's summary determination of invalidity based on the finding that the claim term "processor" was indefinite under 35 U.S.C. § 112.  Similarly, on May 12, 2016, the Commission affirmed summary determination of invalidity based on indefiniteness in Inv. No. 943 involving wireless headsets.

Summary determinations of invalidity based on indefiniteness are not common at the ITC. In the last four years, respondents have brought eleven motions for summary determination of invalidity based on indefiniteness, with only four ultimately granted (including the ones in the 958 and 943 investigations).  Summary determinations of indefiniteness have not increased in frequency following the Supreme Court's decision in Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120 (2014), which tightened the definiteness standard under § 112, ¶ 2, potentially making it easier to invalidate claims under that section.

Automated Teller Machines

In Certain Automated Teller Machines and Point of Sale Devices and Associated Software Thereof, Inv. No. 337-TA-958, complainant Everi Payments, Inc. ("Everi") accused respondents NRT Technologies Corp. and NRT Technologies, Inc. (collectively, "NRT") of infringing U.S. Patent No. 6,081,792 (the "'792 patent") through their importation and sale of ATMs and point of sale devices to gaming and entertainment establishments.  Everi also accused NRT of false advertising under the Lanham Act for making alleged false representations that the '792 patent was invalid.

On December 22, 2015, Chief Judge Bullock issued his Markman order construing certain terms of the asserted claims of the '792 patent.  See Automated Teller Machines, Order No. 15.  The term "processor" in independent claims 1 and 9 was the focus of the Order (emphasis added):

A method of providing money or an item of value to an account-holder, the method comprising: identifying an account to a terminal; entering a personal identification number into the terminal; requesting money or an item of value based upon the account via a first type of transaction; forwarding the first type of transaction to a processor....

NRT asserted that the term "processor" was indefinite because the specification provided no guidance as to which type of processor – payment processor or computer processor – was claimed.  Chief Judge Bullock agreed, and held that he need not construe any of the other disputed terms, stayed the investigation, and "encouraged the parties to . . . fil[e] a motion for summary determination or a motion to terminate the Investigation."  Order No. 15 at 14 n.3.  NRT subsequently moved for summary determination of invalidity, which was granted.  See Order No. 17 (Mar. 22, 2016).

On May 16, 2016, the Commission issued a notice affirming the ALJ's finding of invalidity.  The Commission concluded that "the claim language, when read in light of the specification and prosecution history, fails to inform, with reasonable certainty, those skilled in the art about the scope of the invention.  In particular, as discussed on pages 10-12 of Order No. 15, the patent is ambiguous as to whether the claimed 'processor' is a payment processor (using the meaning of the term in connection with financial transactions) or a computer processor (as Everi contends), or both."  The Commission also rejected allegations made in Everi's petition for review that there were procedural irregularities in Order Nos. 15 and 17; specifically, that finding a patent invalid in a Markman order was procedurally improper.

Wireless Headsets

In Certain Wireless Headsets, Inv. No. 337-TA-943, complainant One-E-Way, Inc. accused 13 wireless headset manufacturers ("respondents"), including Sony, Beats Electronics, and Jawbone, of infringing U.S. Patents 7,865,258 and 8,131,391 through their importation and sale within the U.S. of certain wireless headsets.

On September 21, 2015, Judge Pender granted summary determination that all of the asserted claims of both patents were invalid as indefinite.  See Wireless Headsets, Order No. 17.  Judge Pender determined that the term "virtually free from interference" with respect to a wireless audio transmission was indefinite, because the term was "(1) not defined; (2) has no specific meaning to a PHOSITA; (3) cannot mean 'free from interference'; and (4) requires metes and bounds – which are conspicuously missing."  Id. at 7.    

On May 12, 2016, the Commission issued a notice affirming the ALJ's determination of invalidity based on the indefiniteness of the term "virtually free from interference."

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

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