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December 8, 2009

Actually Factual

Source Search Technologies (SST) sued LendingTree over 5,758,328, which claims an online vending system employing request for quote (RFQ) posting to select potential vendors, to which the vendors respond. "The '328 patent claims to solve the "too much" or "too little" information problem commonly associated with running searches over a network or system." The asserted claims were found infringed but obvious, thus invalid, in summary judgment. The appeal, narrowed to a single claim (14), let the CAFC panel reiterate its caution to district courts: be not hasty in granting summary judgment if the scent of "genuine issues of material fact" is in the air.

Source Search Technologies v. LendingTree (CAFC 2008-1505) precedential

Obviousness

Obviousness is a question of law based on underlying findings of fact. The factual determinations for obviousness include: (1) the scope and content of the prior art, (2) the characteristics and understanding of an individual of ordinary skill in the relevant field of art at the time of invention, (3) the differences between the claimed invention and the prior art, and (4) the evidence of secondary factors, also known as objective indicia of non-obviousness. Graham v. John Deere Co., 383 U.S. 1, 17-18 (1966). In reviewing a district court's summary judgment of non-obviousness, this court also recognizes the movant's burden to prove invalidity by clear and convincing evidence. See Monarch Knitting Mach. Corp. v. Sulzer Morat GmbH, 139 F.3d 877, 881 (Fed. Cir. 1998).

The district court's grant of summary judgment of obviousness was based on two sets of prior art references: the "e-commerce" prior art and the "bricks and mortar" prior art. The former refers to early e-commerce systems employing the internet for access and distribution. The latter refers to pre-internet referral services, such as home contractor networks or social services networks, used by consumers to help locate a suitable service provider for a particular project.

The appeals court walked through, by characterization, the nature of the prior art that the district court relied upon.

Turning to the ultimate question at hand, this court finds that the district court erred in its finding of obviousness. Genuine issues of material fact bar entry of summary judgment.

In simple terms, none of the prior art discloses a qualifying "quote" that is directly forwarded to a client... The record shows that the prior art lacked any meaningful filtering process in all of the e-commerce prior art. Indeed, the claimed invention places great emphasis on addressing this problem. A person of ordinary skill in this art may not have even recognized the problem addressed by the filtering feature of the claimed invention in 1996, at the dawn of the internet era. And even if the problem was apparent to one of ordinary skill, a solution may not have been a straightforward step.

Infringement

LendingTree was found infringing based upon claim construction.

SST argued that LendingTree was collaterally estopped from arguing a position based upon a previous unrelated patent litigation. The district court didn't buy it, and the CAFC let that stand.

Turning to the merits, this court again perceives that a material issue of fact bars summary judgment that LendingTree's website meets the "request for quote" limitation.

As this court has repeatedly instructed in the past, "[i]t is axiomatic that claims are construed the same way for both invalidity and infringement." Amgen Inc. v. Hoechst Marion Roussel, Inc., 314 F.3d 1313, 1330 (Fed. Cir. 2003); see also Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1351 (Fed. Cir. 2001) ("Because the claims of a patent measure the invention at issue, the claims must be interpreted and given the same meaning for purposes of both validity and infringement analyses."); C.R. Bard, Inc. v. M3 Sys., Inc., 157 F.3d 1340, 1363 (Fed. Cir. 1998) ("Claims must be interpreted the same way for determining infringement as was done to sustain their validity."); Southwall Techs., Inc. v. Cardinal IG Co., 54 F.3d 1570, 1576 (Fed. Cir. 1995) ("Claims may not be construed one way in order to obtain their allowance and in a different way against accused infringers."); Beachcombers, Int'l, Inc. v. WildeWood Creative Prods., Inc., 31 F.3d 1154, 1163 (Fed. Cir. 1994) ("We have already interpreted the claims for purposes of assessing their validity. The same claim interpretation of course applies to the infringement analysis."). In that connection, this court has found that a material issue of fact precludes summary judgment on obviousness because the prior art does not contain a "request for a quotation" feature. The same analysis applies to infringement. Under the district court's construction, a "quote" effectively means a "price and other terms of a particular transaction in sufficient detail to constitute an offer capable of acceptance." This record shows factual issues regarding the "quotes," if any, forwarded to buyers by LendingTree's website. Without the presence of undisputed facts showing that LendingTree site provides "quotes" as in claim 14, this court must vacate the district court's summary judgment on this point.

Indefiniteness

The CAFC panel replayed its low bar standard of indefiniteness, staring with a hoary case law quote that indicates the contrary: that definiteness is required, not that finding indefiniteness requires gobbledygook ("insolubly ambiguous") claim language, as is the current appeals court standard.

The last question presented is one of indefiniteness. "The statutory requirement of particularity and distinctness in claims is met only when [the claims] clearly distinguish what is claimed from what went before in the art and clearly circumscribe what is foreclosed from future enterprise." United Carbon Co. v. Binney & Smith Co., 317 U.S. 228, 236 (1942). A claim term pinned solely on the "unrestrained, subjective opinion of a particular individual purportedly practicing the invention" will not suffice. Datamize, LLC v. Plumtree Software, Inc., 417 F.3d 1342, 1350 (Fed. Cir. 2005). Absolute clarity, however, is not necessary. "If the meaning of the claim is discernible, even though the task may be formidable and the conclusion may be one over which reasonable persons will disagree, we have held the claim sufficiently clear to avoid invalidity on indefiniteness grounds." Exxon Research & Eng'g Co. v. United States, 265 F.3d 1371, 1375 (Fed. Cir. 2001). Only claims "not amenable to construction" or "insolubly ambiguous" are indefinite. Id.

Here, the purported problem is a catch-all term that LendingTree wanted to bugger. The CAFC waved that off.

LendingTree asserts that the district court's construction of "goods or services" introduces a subjective element into claim 14 that renders it indefinite. More specifically, LendingTree argues that a person practicing the claimed invention would not be able to differentiate between "standard" and "non-standard" "goods or services." Beyond its conclusory statements and bald assertions, LendingTree offers no support for this position. Of course a person wishing to practice the invention will not know the exact terms of the "good or service" until the specific market or network is chosen. Upon that choice, however, the "good or service" comes into clear focus. To hold otherwise would require the patent to list every possible good or service. This court does not load the indefiniteness requirement with this unreasonable baggage. Although at times difficult to determine the bounds of a "standard" product or service, a person having ordinary skill in the art will possess an understanding of the system that will supply an objective definition to the various markets and applications of the system. See Shatterproof Glass Corp. v. Libbey-Owens Ford Co., 758 F.2d 613, 624 (Fed. Cir. 1985) ("If the claims, read in light of the specification, reasonably apprise those skilled in the art both of the utilization and scope of the invention, and if the language is as precise as the subject matter permits, the courts can demand no more." (quoting Georgia-Pacific Corp. v. United States Plywood Corp., 258 F.2d 124, 136 (2d Cir. 1958))).'

This court does not judge indefiniteness according to the subjective impressions of any particular user of the system, as LendingTree urges. Instead, this court measures indefiniteness according to an objective measure that recognizes artisans of ordinary skill are not mindless "automatons." KSR, 550 U.S. at 421 ("A person of ordinary skill is also a person of ordinary creativity, not an automaton."). From that vantage point, a skilled artisan will understand the markets and the system enough to determine what is a "standard" item. This court therefore does not accept LendingTree's contentions.

Back to district court, for trial on validity and infringement, for definite claims.

Posted by Patent Hawk at December 8, 2009 5:26 PM | Infringement

Comments

"This court does not judge indefiniteness according to the subjective impressions of any particular user of the system, as LendingTree urges"

Kind of like patent hawk urged a certain court to do in a certain amicus brief not long ago?

Posted by: 6000 at December 8, 2009 6:27 PM