Federal Circuit reaffirms anticipatory reference must have all elements as arranged in the claimOctober 31, 2008

In a recent decision, the Federal Circuit affirmed a district court's finding of indefiniteness but reversed the district court's holding of anticipation of other claims. The district court held the means-plus-function limitations did not have corresponding structure disclosed in the specification, rendering them indefinite, and that the combination of two examples in a prior art publication anticipated the remaining asserted claims.

The Federal Circuit agreed the means-plus-function limitations were indefinite. The limitations were computer-implemented, which means to be definite, the specification must disclose "more than simply a general purpose computer or microprocessor," but instead must disclose "the special purpose computer programmed to perform the disclosed algorithm." There was no such disclosure here, so the Federal Circuit held the claims were correctly held indefinite.

Regarding anticipation, however, the court reaffirmed its previous cases holding in order to anticipate, it is not enough for all elements of the claim to be disclosed in a single reference. All the elements must also be disclosed as arranged in the claim. Here, the claim elements were spread across two different examples given in the allegedly anticipatory reference, so the Federal Circuit reversed the district court's summary judgment of anticipation because the reference did not disclose the elements as they were arranged in the claim.

More detail of Net MoneyIN, Inc. v. VeriSign, Inc. after the jump.

Net MoneyIn, Inc. (NMI) is a company that processed credit card transactions over the internet, and was founded based on a patent filed in February 5, 1996 by Ogram, a patent attorney. The application eventually resulted in U.S. Patent Number 5,822,737 and U.S. Patent Number 5,963,917. VeriSign is a provider of secure internet transactions, and accused infringer of the two patents. NMI has ceased doing business processing internet transactions, and has focused instead on enforcing its patents.

VeriSign filed motions for summary judgment of invalidity of the asserted claims under 35 USC §§ 102(a) and 112. The district court granted the motions, finding the claims including a means-plus-function element to be indefinite as lacking corresponding structure in the specification, and the remaining claims anticipated by a 1995 publication by the Internet Engineering Task Force and IBM entitled "Internet Keyed Payments Protocol" ("the iKP reference"). Specifically, the district court found all of the limitations in the iKP reference by combining two different example protocols. NMI appealed.

The Federal Circuit affirmed the district court's grant of summary judgment on the issue of invalidity under 35 USC § 112, that the means-plus-function limitations of several claims lacked corresponding structure. The relevant portion of claim 1 (and similarly in claims 13 and 14) of the '737 patent is as follows (emphasis added):

a first bank computer containing financial data therein, said financial data including customer account numbers and available credit data, said first bank computer including means for generating an authorization indicia in response to queries containing a customer account number and amount.

NMI argued this was not a means-plus-function limitation despite its use of the word "means," arguing the "first bank computer" in the claim was the structure performing the function. The court was unpersuaded, as the claim clearly states the first bank computer includes the means, so such a reading would render the claim illogical, requiring a first bank computer including a first bank computer.

The Federal Circuit then observed that for a computer-implemented means-plus-function limitation, the required structure to be recited in the specification must be "more than simply a general purpose computer or microprocessor," but instead must disclose "the special purpose computer programmed to perform the disclosed algorithm." Here, there was no such disclosure of a special purpose computer in the specification. As a result, because the means-plus-function limitation did not have corresponding structure in the specification, the claims were correctly held invalid as indefinite.

The court reached the same conclusion with regard to claim 1 of the '917 patent. There, the applicable limitation was (emphasis added): "a finanical processing computer . . . having automatic means responsive to [the] order for . . . receiving customer account data and amount data from [the] customer computer and [the] merchant computer." The district court construed this limitation to require the computer to receive the information from both the customer and merchant computer. Under this construction, there was undisputedly insufficient structure in the specification to render the claim definite. The Federal Circuit agreed with the district court's construction, rejecting NMI's attempt to argue for a different construction for the first time on appeal. Accordingly, the court affirmed the district court's decision invalidating this claim as well.

The Federal Circuit reversed the district court's summary judgment of anticipation, however. The applicable claim, claim 23 of the '737 patent, requires five "links":

a) a first link between a customer computer and a vending computer for communicating promotional information from said vending computer to said customer computer; b) a second link, initiated by said customer computer, between said customer computer and a payment processing computer, remote from said vending computer, for communicating credit card information and amount from said customer computer to said payment processing computer; c) a third link, initiated by said payment processing computer with a credit card server computer for communicating said credit card information and said amount from said payment processing computer to said credit card server computer, and for communicating, in response, an authorization indicia from said credit card server computer to said payment processing computer; [] d) a fourth link between said payment processing computer and said customer computer for communicating a transactional indicia[;] . . . [e)] a fifth link between the payment processing computer and said vending computer for communicating said transactional indicia.

The 1995 iKP reference was intended to provide protocols for processing credit card payments over the internet. Two separate and distinct protocols were proposed in the iKP reference. According to the first iKP protocol, the customer submits transaction information (credit card number and amount) to the merchant who sends the information to his bank which seeks authorization from the customer's bank for the purchase. The merchant is then notified if the transaction is approved. According to the second iKP protocol, the customer submits transaction information to the merchant's bank, which seeks authorization from the customer's bank. The merchant's bank then notifies the customer if the transaction is approved, and the customer must then send the authorization to the merchant.

The Federal Circuit observed its precedent requires that a claim is anticipated only if the cited reference discloses all elements of the claim, and as they are arranged in the claim. As stated by the court:

We thus hold that unless a reference discloses within the four corners of the document not only all of the limitations claimed but also all of the limitations arranged or combined in the same way as recited in the claim, it cannot be said to prove prior invention of the thing claimed and, thus, cannot anticipate under 35 U.S.C. § 102.

Here, the iKP reference disclosed all the elements of the claim, but did so in the course of two separate and distinct protocols. As a result, the reference could not anticipate, because the elements were not disclosed as they existed in the claim. Accordingly, the Federal Circuit reversed the district court's grant of summary judgment of anticipation. single device (or method) which embodies all of the limitations of the claim in order to anticipate under 35 USC § 102(a). When a cited reference discloses a number of distinct inventions, the court should consider each distinct invention a separate reference for the purpose of § 102(a).

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