The dispute in claim construction in Harris v. Ericsson was whether a limitation covered a one- and two-step process, favored by Harris, the patent holder, or just a two-step process, favored by defendant Ericsson, as a basis for a non-infringement argument. The dispute on appeal was whether Ericsson was estopped from certain claim construction arguments because of its previous position before the district court.

Because waiver and estoppel are the only available grounds on which to affirm the district court’s construction, we first consider whether Ericsson waived, or is estopped from asserting, any of its claim construction arguments based on its actions before the district court. Waiver is a procedural issue, but if one views the issue more narrowly as “waiver of a claim construction argument,” rather than the more general “waiver of an appellate argument,” it seems indisputably unique to patent law. In our estimation, the narrower of these two views is more appropriate. This court does not appear to have addressed explicitly the choice of law issue presented here, but numerous Federal Circuit cases have discussed waiver of claim construction arguments, citing Federal Circuit law without so much as mentioning regional circuit law. See, e.g., Gaus v. Conair Corp., 363 F.3d 1284, 1287-88 (Fed. Cir. 2004); Interactive Gift Express, Inc. v. Compuserve Inc., 256 F.3d at 1346, 1344-47 (Fed. Cir. 2001); Key Pharms. v. Hercon Labs. Corp., 161 F.3d 709, 714-16 (Fed. Cir. 1998); Sage Prods., Inc. v. Devon Indus., 126 F.3d 1420, 1426 (Fed. Cir. 1997). Also, we have held that “waiver of claims and defenses in a settlement agreement,” where “the underlying substance of these arguments . . . is intimately related with the substance of enforcement of a patent right[,]” is a matter of Federal Circuit law. Flex-Foot, Inc. v. CRP, Inc., 238 F.3d 1362, 1365 (Fed. Cir. 2001). Because the ability to make claim construction arguments on appeal is intimately bound up with patent enforcement, we hold that Federal Circuit law controls waiver in the context of claim construction arguments.

Alas, both Harris and Ericsson got a bit weaselly in their positions; that is too disgustingly common.

The initial step in our waiver analysis is to compare Ericsson’s appellate and trial court arguments. Harris alleges that Ericsson never argued in front of the district court for the two-step claim construction it advances now. Ericsson argues that its positions before the district court were basically the same as the ones it maintains now. Neither side is entirely correct.

Thus, Ericsson’s claim construction theory on appeal is at least slightly different—in form if not in ultimate conclusion—from its position below.

The next question is whether the change in Ericsson’s argument is so insubstantial that it represents “the same concept” that Ericsson raised before the district court, in which case there would be no waiver.

It strains credulity for Harris to argue that Ericsson is raising a wholly new claim construction on appeal. Ericsson could not have stated any more clearly before the district court that it was advocating a two-step claim construction; the only difference between its district court and appellate arguments hinges on whether the two steps are found in the claimed functions or the corresponding structure. The slight change in claim scope that results from Ericsson’s alteration of the rationale for its claim construction does not affect our view in this case. Shifting from a “function” theory to a “structure” theory modifies the claim scope in one minor way: equivalent structure infringes literally (as long as the equivalent structure was a technology that was available prior to the issue date of the patent), whereas an equivalent function would infringe under the doctrine of equivalents. See Interactive Pictures Corp. v. Infinite Pictures, Inc., 274 F.3d 1371, 1382 (Fed. Cir. 2001); Al-Site Corp. v. VSI Int’l, Inc., 174 F.3d 1308, 1320 (Fed. Cir. 1999).

Because Ericsson is advocating the same concept as it did in the district court, we hold that Ericsson’s district court claim construction arguments do not preclude its WMS Gaming argument on appeal.

The precedent of WMS Gaming is that a computer-implemented means-plus-function claim limitation is limited to the algorithm disclosed in the specification

Turning to the substantive claim construction issue, WMS Gaming restricts computer-implemented means-plus-function terms to the algorithm disclosed in the specification. Construing the term “means for assigning a plurality of numbers representing said angular positions of said reel, said plurality of numbers exceeding said predetermined number of radial positions such that some rotational positions are represented by a plurality of numbers[,]” the court in WMS Gaming rejected the argument that the corresponding structure was merely “an algorithm executed by a computer,” holding instead that it was limited to the specific algorithm disclosed in the specification. WMS Gaming, 184 F.3d at 1348-49... The WMS Gaming court could have relied on the function to limit the claim, but explicitly based the claim construction portion of its ruling on structure instead. Id. at 1348-49. A computer-implemented means-plus-function term is limited to the corresponding structure disclosed in the specification and equivalents thereof, and the corresponding structure is the algorithm.

Ericsson is correct that WMS Gaming applies to the means-plus-function claims in this case.

CAFC ruled that a two-step algorithm, as disclosed in the specification, was appropriate, a decision favorable to Ericsson. Because of unexplored equivalence issues, however, the decision was not dispositive to the case.

This case and CAFC ruling are messy with details, including other specific claim construction issues, and damages, including willfulness.

There was a well-reasoned dissent by Judge Gajarsa:

First, the court allows Ericsson to submit its WMS Gaming claim construction argument, for the first time, on appeal. Contrary to the court’s analysis, the shift in claim construction is more than an “infinitesimal tweak in scope.” The facts belie that position. It is in fact a paradigm shift which should not be tolerated. Ericsson procedurally defaulted by not making the argument to the trial court, and the facts of this case weigh against excusing the waiver. The court’s approach misapplies our waiver jurisprudence and fails to understand the policies that regulate the proper relation of trial and appellate courts.

There is a lot of substance to this ruling, and this weblog entry just hits the highlights on one issue.