Federal Circuit on Software Patents: Show Me the Algorithms
|Written by Gene Quinn
Patent Attorney & Founder of IPWatchdog, Inc.
Principal Lecturer, PLI Patent Bar Review Course Posted: April 9, 2012 @ 5:56 pm
Earlier today the United States Court of Appeals for the Federal Circuit issued a decision in Noah Systems, Inc. v. Intuit, Inc., addressing very similar issues to those raised in in Ergo Licensing, LLC v. CareFusion 303, Inc. See CAFC Kills Means-Plus-Function in Software Patent. In both cases the outcome rested upon whether means-plus-function claims in a software patent were indefinite and, therefore, invalid. Both cases followed the ever growing body of law on the topic from the Federal Circuit, which requires an algorithm to be presented in the disclosure in order to satisfy the disclosure requirements invoked along with claims written pursuant to 35 USC § 112, ¶ 6. In both cases the claims were lost. I strongly disagreed with the ruling in Ergo, and while I would have come down differently on Noah Systems at least the Court in this case explained themselves. This now gives us the best glimpse yet into understanding the disclosure requirements for software patents that utilize means-plus-function claim language.
This appeal arose out of an action brought by Noah against Intuit for infringement of the U.S. Patent No. 5,875,435. The ’435 patent relates to an automated financial accounting system. The system allows a business or individual to connect to the computers of companies with which that entity conducts business so that information regarding financial transactions can be transmitted between them. Noah asserted that Intuit’s Quicken and QuickBooks products infringe system claims 12–17, 29–38, and 40–56. All of the asserted claims contain an “access means” limitation. The parties agree that this is a means-plus- function limitation performed by a processor. This appeal turns on whether the specification discloses an algorithm to perform the function or functions associated with the “access means” limitation.
As a result of means-plus-function claiming, under the growing law of the Federal Circuit that means that the specification of the ’435 patent must contain an algorithm that performs the function associated with the “access means” limitation, otherwise the limitation is indefinite and the claim invalid. Ultimately, the Federal Circuit would determine that the algorithm disclosed was incomplete. This lead the Court to explain that when the specification discloses an algorithm that only accomplishes one of multiple identifiable functions performed by a means-plus-function limitation, the specification is treated as if it disclosed no algorithm. An incomplete algorithm means no algorithm at all, which means that what one of ordinary skill in the art would understand from the disclosure is no longer relevant. This is where I would depart from the Federal Circuit and think that the law as it relates to means-plus-function claiming of computer software is all wrong. Means-plus-function claims has always been about what someone of ordinary skill in the art would appreciate (see, for example, USPTO 112 guidelines, 76 Fed. Reg. 7162 (9 February, 2011) so why is that not the case with respect to computer software? I don’t know, but at least for now we need to accept it and more forward.
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Noah alleged that Intuit’s products infringe independent claims 12, 52, 53, and 56. Representative independent claim 12 recites:
A financial accounting system for a first entity such as an individual or a business, said system comprising:
a financial accounting computer having at least one file;
a financial transaction computer for receiving data inputs, said data inputs including electronically recorded financial transactions made between said first entity and a second entity;
first communication means for transferring said data inputs from said financial transaction computer to said file of said financial accounting computer; and
means for providing access to said file of said financial accounting computer for said first entity and/or agents of said first entity so that said first entity and/or said agent can perform one or more activities selected from the group consisting of entering, deleting, reviewing, adjusting and processing said data inputs.
The parties agreed that the italicized language is the “access means” limitation.
Although the parties disputed the construction of many terms, the parties agreed that this limitation is a means-plus-function claim that, therefore, invokes 35 USC § 112 ¶ 6. The parties also agreed that the function performed by the “access means” is “providing access to the file of the financial accounting computer for the first entity and/or agents of the first entity so that the first entity and/or the agent can perform one or more of the activities selected from the group consisting of entering, deleting, reviewing, adjusting and processing the data inputs.” The parties did dispute, however, what structure performed this function.
At trial, on the basis of the special master’s recommendation, the district court concluded that the ’435 patent’s specification did not disclose an algorithm for performing the function associated with the “access means” limitation. This determination lead to a decision rendering all of the asserted claims indefinite because they lacked the required corresponding structure. Accordingly, the district court entered summary judgment of invalidity in favor of Intuit. Ultimately the Federal Circuit would find that the district court erred in determining that no algorithm was present, because at least a partial algorithm was present, but did not disturb the ruling because of the determination that a partial algorithm is as good as no algorithm at all for purpose of interpreting means-plus-function claims.
On appeal, Noah raised two different, albeit closely related, arguments. Noah asserts that the district court erred when it: (1) construed the “access means” limitation in a manner that rendered it indefinite; and (2) granted summary judgment of invalidity without requiring Intuit to present expert testimony regarding how one of ordinary skill in the art would view the sufficiency of the disclosure in the ’435 patent.
The Federal Circuit pointed out that means-plus-function claiming involves a quid pro quo. In exchange for being able to draft a claim limitation in purely functional language, t]he applicant must describe in the patent specification some structure which performs the specified function. Importantly, the functional claim language covers only the corresponding structure, material, or acts described in the specification and equivalents thereof, which confines the breadth of protection otherwise permitted by purely functional claiming.
The Federal Circuit also acknowledged that it is undisputed that the question of whether a claim is indefinite is based on how the claim limitation would be understood by one of skill in the art. The Court went on to say, however, that the testimony of one of ordinary skill in the art cannot supplant the total absence of structure from the specification. What does this mean? I have no clue whatsoever. These two statements are logically inconsistent, to put it politely. It is impossible for means-plus-function definiteness to be about what one of skill in the art would understand and then to simply refuse to ask what one of skill in the art would understand. The Federal Circuit has set up a logical impossibility.
If someone of skill in the are would appreciate something based on the disclosure then there has to be something there to lead that person to the appropriate understanding. If there is nothing there to lead one of skill in the art to an understanding then it would be impossible to understand. Whether the Federal Circuit likes it or not, the reality is they are supplanting their own determination about what is disclosed in computer software patents for the understanding of one of skill in the art. If we were dealing with tangible embodiments the illogical nature of the syllogism would be obvious, but because we are dealing with intangibles like whether a disclosure teaches a claim even without an algorithm the lack of logic flourishes.
In any event, the Federal Circuit explained that current case law regarding special purpose computer-implemented means-plus-functions claims is divided into two distinct groups: (1) cases where the specification discloses no algorithm; and (2) cases where the specification does disclose an algorithm but a defendant contends that disclosure is inadequate. The distinction is important because if an algorithm is disclosed then it it matters what one of skill in the art would understand. If no algorithm is disclosed (or as a result of this case if a partial algorithm is disclosed) it is irrelevant whether one of skill in the art would understand the disclosure. As I write that last sentence it is hard to do so with a straight face. A situation exists when the law does not care whether someone skilled in the art would understand the claim and the disclosure? Mind-boggling if you ask me. Such a rule seems directed to allowing judicial oversight into the technical arts, allowing judges to determine the quantum and quality of an informing disclosure. No offense, but that is ridiculous.
Contrary to the district court’s conclusion and Intuit’s arguments, the Federal Circuit did determine that the ‘435 patent specification disclosed an algorithm for the passcode function associated with the “access means.” Notwithstanding, there are two functions recited in the claim, namely: (1) providing access to the file; and (2) once access is provided, enabling the performance of delineated operations. In order to get to whether someone of skill in the art would understand the disclosure the Federal Circuit explained that there must be an algorithm present that addresses both aspects of this functional language. Unfortunately for Noah, they sought to rely upon what someone of skill would understand rather than having explicit teachings, focusing on aspects of the disclosure that were not precisely related to the key aspects of the claims to provide a rounded-out disclosure that would inform. Noah’s attempt to explain that multiple methods would accomplishing this would be known by those of skill in the art were unavailing, and were even harmful. “That various methods might exist to perform a function is precisely why the disclosure of specific programming is required.”
According to the Federal Circuit, “the algorithm requirement is necessary because general purpose computers can be programmed to perform very different tasks in very different ways. Without disclosing any corresponding structure, one of skill simply cannot perceive the bounds of the invention.” (citations omitted). Call me crazy, but how can any Court or Judge know that to be true without asking one of skill in the art? Determining that one of skill in the art would not appreciate the bounds of the invention without asking one of skill in the art whether they understand the invention is nonsense if you ask me. Having said that, moving forward we will just have to understand that means-plus-function claiming is extraordinarily narrow and not particularly useful. Sure, you can use means-plus-function and probably should, but you better have claims that don’t invoke § 112, ¶ 6 as well.
Finally, allow me to point out to the many who invent in the software space who tell me that flowcharts are not necessary. Indeed, believe it or not I am told with more than passing frequency by would-be clients that they have obtained software patents before and flowcharts are just not required. Newsflash — WRONG! Now more than ever flowcharts and detailed discussion about how each and every aspect of the processes are carried out are required.
Best practices in terms of writing a disclosure will have you write your disclosure to satisfy the disclosure requirements in these algorithm cases even if you don’t employ means-plus-function claiming initially. With the advent of Track One you are never more than 6 to 12 months away from a patent if you keep an application pending on file through the use of continuations. So write your disclosures to satisfy these algorithm cases and you will have a tremendous disclosure that can support all kinds of claims now and in the future.- - - - - - - - - -
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About the Author
Gene Quinn is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.