In Re Keisuke Ayoma et al (CAFC 2010-1522) precedential; Judges Gajarsa, Linn (author), Newman (dissenting)

Mitsui Bussan Logistics, Inc. ("Mitsui") is the assignee of U.S. Patent Application No. 10/798,505 titled "System and Method for Distribution Chain Management" and appeals the affirmance by the Board of Patent Appeals and Interferences ("Board") of the examiner's rejection of claims 11 and 21 as anticipated by U.S. Patent Application Pub. 2001/0034673 to Yang et al. ("Yang"). Because the Board erred in construing the means-plusfunction limitation of claims 11 and 21 and because there is no permissible construction, this court affirms the rejection of claims 11 and 21 on the alternative ground of failure to satisfy the definiteness requirement of 35 U.S.C. § 112 ¶ 2 and remands with instructions to afford Mitsui the same protections under 37 C.F.R. § 41.50(b) as it would have enjoyed had the Board made the proper rejection in the first instance.

Independent claims 11 and 21 are pending and on appeal. Claim 11 recites (disputed limitation emphasized):

11. A system for supply chain management comprising: an order controller system including reverse logistics means for generating transfer data; and a warehouse system receiving the transfer data and generating shipping data.

Claim 21 similarly contains the "reverse logistics means for . . . generating transfer data" limitation of claim 11.

The examiner construed the "reverse logistics means for generating transfer data" limitation as a means-plusfunction limitation. The examiner concluded that "[t]he structure corresponding to the reverse logistics means for transferring is a computer implemented with software." Based on this construction, the examiner rejected claims 11 and 21 based upon the disclosure in Yang because Yang discloses "any working computer."

On appeal to the Board, Mitsui challenged the examiner's anticipation rejection by attacking the examiner's construction of "reverse logistics means." In particular, Mitsui contended that Figure 8, shown below, and the accompanying description in paragraphs [0088]-[0093] disclose the corresponding structure for the means-plus-function limitation.

The patent board demonstrated illiteracy, not to mention ignoring the law (as contrasted to ignorance of it).

The Board disagreed. It analyzed Figure 8 and the accompanying description and instead found "[t]here is no structure or algorithm for generating transfer data disclosed in the discussion of Figure 8 at Specification paragraphs[] 0088-93." Ex parte Aoyama, No. 2009-6755, slip op. at 12 (B.P.A.I. Nov. 17, 2009) ("Initial Decision"). Unable to find structure in Figure 8 and the accompanying description, the Board scoured the specification for any implied structure that could even arguably generate transfer data. Id. The Board, in giving "generating transfer data" a broad construction, focused on the application's disclosure of generating shipping data. The Board therefore concluded that the structure for generating transfer data was "open ended" and could be generated by order controller systems, warehouse systems, and distribution systems based upon order data, order allocation data to warehouses, inventory data, and other suitable data. Id. Under this construction, the Board affirmed the examiner's rejection of claims 11 and 21 over Yang because "[o]ne of ordinary skill knew that any inventory management system that tracked parts at various locations had to document transfers or shipments among locations." Id. at 15-16.

On to appeal.

Claim Construction

Determining whether claims are anticipated involves a two-step analysis. The first step involves construction of the claims of the patent at issue. Claim construction is a question of law reviewed de novo. In re Bigio, 381 F.3d 1320, 1324 (Fed. Cir. 2004) (citing Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1454 (Fed. Cir. 1998) (en banc)). Similarly, "[d]etermining the claimed function and the corresponding structure for a claim limitation written in means-plus-function format are both matters of claim construction . . . . present[ing] issues of law that we review de novo." WMS Gaming Inc. v. Int'l Game Tech., 184 F.3d 1339, 1347 (Fed. Cir. 1999) (citation omitted). The second step involves comparing the claims to the prior art. Anticipation is a question of fact reviewed for substantial evidence. In re Hyatt, 211 F.3d 1367, 1371-72 (Fed. Cir. 2000).

Mitsui argues that the Board erred in construing the means-plus-function limitation "reverse logistics means for generating transfer data." According to Mitsui, the specification and the prosecution history clearly link the function of the reverse logistics means for generating transfer data of claims 11 and 21 to the flowchart algorithm of Figure 8. Appellant's Br. 17. Mitsui contends that by giving the terms of the means-plus-function limitation the "broadest reasonable interpretation" and ignoring the structure disclosed in Figure 8, the Board's construction failed to comply with this court's guidance in In re Donaldson Co., 16 F.3d 1189 (Fed. Cir. 1994), and WMS Gaming.

The United States Patent and Trademark Office ("Office") responds that the Board properly gave the means-plus-function limitation its broadest reasonable construction, consistent with Donaldson. 16 F.3d at 1194. The Office contends that because "transfer data" was not defined in the specification, the Board properly construed it in a manner consistent with its plain meaning. This definition, according to the Board, encompassed "shipping data," which is disclosed in the specification. The Office concludes that the Board properly identified the only implied structure disclosed in the specification that performs the function of generating shipping data. This structure is "a system for supply chain management that includes order controller, warehouse and distributions systems." Ex parte Aoyama, No. 2009-6755, slip op. at 5 (B.P.A.I. June 16, 2010) ("Decision on Rehearing").

"The first step in construing a means-plus-function claim limitation is to define the particular function of the claim limitation." Golight, Inc. v. Wal-Mart Stores, Inc., 355 F.3d 1327, 1333 (Fed. Cir. 2004) (citation omitted). "The court must construe the function of a means-plusfunction limitation to include the limitations contained in the claim language, and only those limitations." Cardiac Pacemakers, Inc. v. St. Jude Med., Inc., 296 F.3d 1106, 1113 (Fed. Cir. 2002). Here, both parties agree that the identified function of the limitation of claims 11 and 21 at issue is "generating transfer data."

"The next step in construing a means-plus-function claim limitation is to look to the specification and identify the corresponding structure for that function." Golight, 355 F.3d at 1334. "Under this second step, structure disclosed in the specification is corresponding structure only if the specification or prosecution history clearly links or associates that structure to the function recited in the claim." Med. Instrumentation & Diagnostics Corp. v. Elekta AB, 344 F.3d 1205, 1210 (Fed. Cir. 2003) (internal citation and quotation omitted).

While claims are still to be given their "broadest reasonable interpretation" during prosecution, "the broadest reasonable interpretation that an examiner may give means-plus-function language is that statutorily mandated in paragraph six." Donaldson, 16 F.3d at 1194-95. In Donaldson, this court explained that "the [Office] may not disregard the structure disclosed in the specification corresponding to such language when rendering a patentability determination." Id. at 1195. Moreover, when the disclosed structure is a computer programmed to carry out an algorithm, "the disclosed structure is not the general purpose computer, but rather the special purpose computer programmed to perform the disclosed algorithm." WMS Gaming, 184 F.3d at 1349 (citing In re Alappat, 33 F.3d 1526, 1545 (Fed. Cir. 1994) (en banc)).

This court agrees with Mitsui that the specification and the prosecution history clearly link the function of the "reverse logistics means for generating transfer data" of claims 11 and 21 to the flowchart of Figure 8. The Board also recognized some link between the means-plusfunction limitation and Figure 8. However, after analyzing Figure 8 and finding insufficient structure disclosed, the Office first expanded its construction of "transfer data" to include "shipping data" and then identified the structure that generates "shipping data." Initial Decision at 6, 15-16. This was improper. The Board erred by identifying structure that was not clearly linked or associated by the specification or prosecution history with the function actually recited in the claim, i.e., "generating transfer data." See Med. Instrumentation, 344 F.3d at 1210. The only portion of the specification linked to that function, and the only portion of the specification that Mitsui contends describes the corresponding structure, is the flowchart of Figure 8 and the description thereof in the specification.

Indefiniteness

After concluding that the spec disclosed the claimed means, the CAFC majority concluded just the opposite.

This court agrees with the Board's conclusion that Figure 8 "fails to describe, even at a high level, how a computer could be programmed to produce the structure that provides the results described in the boxes." Id. at 4- 5. Moreover, the Board's finding is consistent with the Examiner's finding. The Examiner recited that "[t]he proper test for meeting the definiteness requirement is that the corresponding structure . . . of a [mean-plusfunction] limitation must be disclosed in the specification itself in a way that one skilled in the art will understand what structure . . . will perform the recited function." Examiner's Answer of April 23, 2007, at 10-11.

Judge Newman found otherwise: "The specification includes a lengthy description of Figure 8."

The mode of describing computer-implemented methods in patent specifications is standardized, and the presentation herein is in routine accordance with established protocols. The court has remarked that the requisite detail does not set "a lofty standard." Finisar Corp. v. DirecTV Group, Inc., 523 F.3d 1323, 1340-41 (Fed. Cir. 2008) ("minimal disclosure" of the programmatic detail of computerimplemented methods). "[T]he sufficiency of the disclosure of algorithmic structure must be judged in light of what one of ordinary skill in the art would understand the disclosure to impart." Aristocrat Techs. Australia Pty Ltd. v. Int'l Game Tech., 521 F.3d 1328, 1337 (Fed. Cir. 2008).

In AllVoice Computing PLC v. Nuance Communications, Inc., 504 F.3d 1236 (Fed. Cir. 2007) the court explained that a flow chart can provide the structure for a means-plus-function claim. My colleagues indeed find that "[t]he only portion of the specification linked to [the claimed] function, and the only portion of the specification that Mitsui contends describes the corresponding structure, is the flowchart of Figure 8 and the description thereof in the specification," Maj. Op. at 7, but also curiously find that "the particular flowchart of Figure 8 and its accompanying description fail to provide any structure or algorithm whatsoever." Maj. Op. at 8-9.

The majority opinion does not address whether a person of ordinary skill in computer programming would understand Figure 8 and the descriptive text as a structural algorithm that could be routinely programmed to perform the function of generating transfer data. See Aristocrat, 521 F.3d at 1337 ("[T]he proper inquiry for purposes of section 112 paragraph 6 analysis is to look at the disclosure of the patent and determine if one of skill in the art would have understood that disclosure to encompass software to perform the function and been able to implement such a program." (internal quotation marks omitted)); see also Med. Instrumentation & Diagnostics Corp. v. Elekta AB, 344 F.3d 1205, 1214 (Fed. Cir. 2003) ("[H]ere there would be no need for a disclosure of the specific program code if software were linked to the converting function and one skilled in the art would know the kind of program to use.").

Failure of written description is §112 ¶1, not §112 ¶2.

Because the means-plus-function limitation of claims 11 and 21 lacked sufficient disclosure of structure under 35 U.S.C. § 112 ¶ 6, these claims are unpatentable as indefinite under 35 U.S.C. § 112 ¶ 2. Aristocrat Techs. Austl. PTY Ltd. v. Int'l Game Tech., 521 F.3d 1328, 1337- 38 (Fed. Cir. 2008). Moreover, because "a claim cannot be both indefinite and anticipated," Enzo Biochem, Inc. v. Applera Corp., 599 F.3d 1325, 1332 (Fed. Cir. 2010), this court does not reach the ground relied on by the Board-- that claims 11 and 21 are unpatentable as anticipated in view of Yang. Id. ("If a claim is indefinite, the claim, by definition, cannot be construed. Without a discernable claim construction, an anticipation analysis cannot be performed.").

The majority counters the dissent under the umbrella of "judicial economy." Hence the §112 ¶2, because it is a purely legal determination, whereas §112 ¶1 has a fact component. This is exemplary of the court shoehorning the law to fit its bias to kill what would be a broad patent claim - what Judge Newman referred to as "placing a heavy appellate thumb on the scale."

As explained by this court in In re Comiskey, 554 F.3d 967, 974 (Fed. Cir. 2009), "some of our cases have concluded that it is inappropriate for this court to consider rejections that had not been considered by or relied upon by the Board." Id. (citations omitted). These cases, however, "referred to situations that required factual determinations not made by the agency." Id. (citations omitted). Chenery itself made clear that it did not "disturb the settled rule that, in reviewing the decision of a lower court, it must be affirmed if the result is correct although the lower court relied upon a wrong ground or gave a wrong reason." Chenery, 318 U.S. at 88 (citation and quotation omitted). This is in part due to judicial economy because "[i]t would be wasteful to send a case back to a lower court to reinstate a decision which it had already made but which the appellate court concluded should properly be based on another ground within the power of the appellate court to formulate." Id. (emphasis added). Chenery concluded that similar considerations governed the review of administrative orders. Id. As this court has long recognized, and repeated again in Comiskey, "we may, however, where appropriate, affirm the agency on grounds other than those relied upon in rendering its decision, when upholding the agency's decision does not depend upon making a determination of fact not previously made by the agency." Comiskey, 554 F.3d at 974 (quoting Killip v. Office of Pers. Mgmt., 991 F.2d 1564, 1568-69 (Fed. Cir. 1993)).

Now for a band-aid to cover the fatal wound.

Ordinarily, if this court were to simply affirm the Board's rejections, Mitsui would not be permitted to amend its claims. Manual of Patent Examining Procedure § 1216.01 ("If all claims in the case stand rejected . . . it is ordinarily not open to subsequent amendment and prosecution by the applicant. However, exceptions may occur where the mandate clearly indicates that further action in the [Office] is to be taken in accordance with the Federal Circuit's opinion." (citations omitted)). Of course, if the Board had issued a § 112 ¶ 2 rejection in the first instance, Mitsui would have had the opportunity to amend its claims or to submit new evidence rebutting the new ground of rejection under 37 C.F.R. § 41.50(b) ("The new ground of rejection is binding upon the examiner unless an amendment or new evidence not previously of record is made which, in the opinion of the examiner, overcomes the new ground of rejection stated in the decision."). This court therefore affords Mitsui the same protections as it would have had before the Board with respect to the rejected claims. See Comiskey, 554 F.3d at 981-82; see also 35 U.S.C. § 144 (stating that this court's mandate shall govern further proceedings before the Office).

Affirmed and remanded.

For the foregoing reasons, this court affirms the Board's rejections of claims 11 and 21 albeit on the alternative ground of failure to satisfy the definiteness requirement of 35 U.S.C. § 112 ¶ 2. Moreover, this court remands with instructions to afford Mitsui the same protections under 37 C.F.R. § 41.50(b) as it would have enjoyed had the Board made the proper rejection in the first instance.

Judge Newman, in dissent -

On this appeal from a PTO rejection, the court has applied a new ground of rejection--which the court calls "indefiniteness"--and issued a final judgment on that ground, although the applicant has had no opportunity to respond to the rejection. The panel majority's ab initio decision is improper, for the Federal Circuit has issued a final judgment on an issue that was not decided by the Board, contrary to 35 U.S.C. §144, which authorizes the Federal Circuit to "review the decision from which an appeal is taken on the record."

The PTO had based its judgment of unpatentability on "anticipation," a ground on which my colleagues announce they shall remain silent, although it is the only issue on appeal, as required by Securities & Exchange Commission v. Chenery Corporation, 318 U.S. 80, 94 (1943) ("The grounds upon which an administrative action must be judged are those upon which the record discloses that its action was based."); Securities & Exchange Commission v. Chenery Corporation, 332 U.S. 194, 196 (1947) ("[A] reviewing court, in dealing with a determination or judgment which an administrative agency alone is authorized to make, must judge the propriety of such action solely by the grounds invoked by the agency."). Although the court remands to the PTO, in order the give the applicant the opportunity (indeed the right) to amend the claims or submit new evidence in light of the rejection, the applicant has had no opportunity to argue the merits of the definiteness rejection; the Federal Circuit's judgment is final and binds the Board on remand. Thus the applicant cannot argue, or submit evidence to show that a person of ordinary skill in computer programming would not find the claims indefinite. While the court cites 37 C.F.R. §41.50(b), which instructs the Board to remand after it raises a new ground of rejection, this court has finally decided that the claims as written are unpatentable on this ground, placing a heavy appellate thumb on the scale of remand. Remanding, as here, to the Board to allow the applicant to conform to the court's adverse final judgment on indefiniteness is far different from remanding to the Board to consider claim definiteness in the first instance. I must, respectfully, dissent.

The Board found the claims "anticipated," and although my colleagues acknowledge that "a claim cannot be both indefinite and anticipated," Enzo Biochem, Inc. v. Applera Corp., 599 F.3d 1325, 1332 (Fed. Cir. 2010), my colleagues resolve this conflict by declining to discuss it, stating that they "do[] not reach the ground relied on by the Board," Maj. Op. at 10, defying the requirements for appellate review of agency action. See Chenery, 318 U.S. at 94 ("[A]n administrative order cannot be upheld unless the grounds upon which the agency acted in exercising its powers were those upon which its action can be sustained."); Chenery, 332 U.S. at 196 ("If those grounds are inadequate or improper, the court is powerless to affirm the administrative action by substituting what it considers to be a more adequate or proper basis."); Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 285-86 (1974) (courts "may not supply a reasoned basis for the agency's action that the agency itself has not given").

Aoyama has had no opportunity to develop a record on this aspect, for it was not raised during examination, and was not a ground of rejection by the Board. In Biomedino, LLC v. Waters Technologies Corporation, 490 F.3d 946, 950 (Fed. Cir. 2007) the court stated that "[w]hile the specification must contain structure linked to claimed means, this is not a high bar." Our appellate role is not to raise the bar, but to apply it, predictably and reliably.

Judge Newman observes the danger of such caprice to an orderly patent regime. Alas, CAFC caprice is well established.

The standard of whether the disclosure is sufficiently "definite" is whether a person of ordinary skill could program the computer to perform the stated function based on that disclosure. See Telcordia Techs., Inc. v. Cisco Sys., Inc., 612 F.3d 1365, 1377 (Fed. Cir. 2010) ("[C]laim definiteness depends on the skill level of an ordinary artisan"). My colleagues do not find that this standard is not here met. Instead, the court draws a new and undefined distinction of "high level process flow," Maj. Op. at 9, changing the rules for computer-implemented inventions. In Atmel Corporation v. Information Storage Devices, Inc., 198 F.3d 1374, 1382 (Fed. Cir. 1999), the court stated that "[t]he requirement of specific structure in §112, ¶6 thus does not raise the specter of an unending disclosure of what everyone in the field knows." Any change in the practice of how computer-implemented methods are required to be presented in patent specifications has wide impact. No basis for such a change is here shown.