Nautilus Standard Used by CAFC to Overturn Pre-Nautilus Patent Indefiniteness Judgment

Bloomberg BNA’s Patent Trademark & Copyright Law Daily™is the IP industry’s premier news service, offering objective, timely,and reliable daily news coverage and commentary from leading IP law...

By Tony Dutra

March 10 — The Federal Circuit March 10 issued its first precedential opinion reversing a district court's judgment of patent claim invalidity for indefiniteness since the Supreme Court's Nautilus decision.

The district court's ruling was based on the pre-Nautilus “insolubly ambiguous” standard for finding a claim indefinite, one the high court replaced with the seemingly less stringent “reasonable certainty” standard.

At first blush, the opinion looked as if the appeals court was saying the new standard was, at the least, different in kind and perhaps even more stringent than the old standard.

However, “My sense is that the result in Eidos Display v. AU Optronics would have been the same before Nautilus as it was after,” Shawn G. Hansen of Nixon Peabody LLP's Silicon Valley office, told Bloomberg BNA.

His colleague in the firm's Chicago office agreed.

“The Federal Circuit is implicitly saying that the claim term in dispute is definite under both the Nautilus standard or under the ‘insolubly ambiguous' standard,” according to Paul R. Kitch. “I was not expecting a sea change in light of Nautilus; and, this decision is consistent with that expectation.”

‘Contact Hole' Found Indefinite

Eidos Display LLC filed a patent application in 1996 that included 17 embodiments, individually described, related to a technique for producing an electro-optical device. The Patent and Trademark Office issued a restriction and eventually granted the patent on one of the embodiments (U.S. Patent No. 5,879,958) at issue here.

Asserted independent claim 1 includes a limitation requiring “a contact hole for source wiring and gate wiring connection terminals,” and the definiteness-related question was whether that meant one contact hole for both wiring terminals, one for each, or some other variation.

On Jan. 22, 2014, the U.S. District Court for the Eastern District of Texas granted the alleged infringers—collectively referred to in the opinion as Display Manufacturers—summary judgment of indefiniteness, under 35 U.S.C. §112, para. 2, because “contact hole” was “insolubly ambiguous.”

That phrase was cited in several Federal Circuit opinions on definiteness, though it is debatable if it ever served as a bright line “standard.” In any case, on June 2, the Supreme Court stated the new standard, in Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, 110 U.S.P.Q.2d 1688 (2014):

[A] patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.

 

The Federal Circuit issued a precedential ruling Sept. 10 in Interval Licensing LLC v. AOL, but that affirmed an invalidity judgment below, and it was confined to a “term of degree”—such as “substantial”—that often has to do with a user's perception of output and is frequently implicated in a Section 112 challenge. In this case, in contrast, the question more specifically goes to what the person of skill in this technological art would perceive of the way the invention was implemented.

No Contraversion of Skill in the Art

Judge Evan J. Wallach wrote the opinion of the court.

First, the court used an analogy to move past the plain language of the claim—which many would read to require one hole. If one said, “I am going to create an electric car for the United States and United Kingdom,” the court said, the listener “would likely expect different electric cars to be created,” if for no other reason than that the steering wheel would be on different sides.

The court then moved to a review of the specification, with a discussion focused on the facts specific to this case. The broader jurisprudential point, though, was what was missing from the specification.

Both parties acknowledged that a person of skill in the art would have assumed different contact holes, and the court said that, had Eidos intended an inventive contribution of a single hole for both wiring terminals, it surely would have described it.

“If the patentee wanted to deviate from the standard practice and claim a novel shared contact hole, some teaching of how to depart from the common practice would not only be expected, but is required,” the court said.

In fact, the court said, the specification only teaches separate holes. And references to the other 16 embodiments, split out from this patent, further supported that conclusion, the court said.

The court thus agreed with Eidos that its preferred construction of separate holes was proper and remanded for further proceedings, with the indefiniteness judgment vacated.

Judges Richard G. Taranto and Raymond T. Chen joined the court's opinion. They also comprised the two-member panel that decided Interval Licensing LLC v. AOL.

Robert Tyler Goodwyn of McKenna Long & Aldridge LLP, Washington, represented Eidos. Christopher Benson of Austin, Texas argued on behalf of all defendants-appellees. Norton Rose Fulbright, Houston, also represented Chunghwa Picture Tubes Ltd.; Wilson, Sonsini, Goodrich & Rosati PC, Austin, Texas, also represented AU Optronics; and Finnegan, Henderson, Farabow, Garrett & Dunner LLP, Palo Alto, Calif., also represented Chi Mei Innolux Corp.

Hansen: Did Nautilus Change Anything?

The opinion “illustrates how little the actual practice of analyzing indefiniteness was changed by the Supreme Court’s opinion in Nautilus v. Biosig,” according to Hansen of Nixon Peabody.

“Without addressing directly whether the district court applied the correct standard in view of Nautilus, the Federal Circuit applied long-standing principles of claim construction to arrive at what it determined to be the correct and not indefinite construction.”

In an e-mail, Hansen thus reduced the “reasonable certainty” standard to a version of what the Federal Circuit has been doing all along. Indeed, at a “PTO Day” conference held the same day as this opinion, Judge Chen argued that the patent community and the high court, by accepting Nautilus's question presented, had made too much of a “rhetorical flourish” in the first Federal Circuit opinion that mentioned the “insolubly ambiguous” test.

“The traditional claim construction principles can be viewed as a set of mechanisms for assessing whether a claim term’s meaning to a person of ordinary skill in the art can be determined with reasonable certainty, as the Supreme Court requires under Nautilus,” Hansen said. “So, the former Federal Circuit rule rejected in Nautilus—that a claim term was indefinite if it was not amenable to construction under the traditional principles—arguably was another way of articulating that the term’s meaning could not be determined with reasonable certainty.”

Kitch: And Will Teva Matter?

In a separate e-mail to Bloomberg BNA, Kitch agreed with his colleague for the most part, and also went further.

“This opinion is also noteworthy for its treatment of claim construction in light of the Supreme Court’s recent Teva decision,” he said, referring to the high court's modification to the appellate review standard of claim construction judgments.

“More specifically, the Federal Circuit avoided having to give deference to any portion of the district court’s claim construction by finding that the claim term could be construed relying solely upon intrinsic evidence and finding that any consideration of extrinsic evidence by the district court was immaterial to the outcome given that the intrinsic record was clear,” Kitch said. “As a result, the Federal Circuit was able to reverse the district court using a de novo standard of review.”

Since the Jan. 20 Teva decision, in fact, the Federal Circuit has repeatedly found that it can resolve claim construction disputes based on the intrinsic evidence alone, without having to resort to the clear-error standard for “subsidiary factual findings.”

“It will be interesting to see how often the Federal Circuit reaches the conclusion that extrinsic evidence offered in the context of claim construction is immaterial,” Kitch said. “If this becomes common practice, the impact of Teva will be significantly reduced.”

To contact the reporter on this story: Tony Dutra in Washington at adutra@bna.com

To contact the editor responsible for this story: Tom P. Taylor at ttaylor@bna.com

Full text at http://www.bloomberglaw.com/public/document/Eidos_Display_LLC_v_AU_Optronics_Corporation_Docket_No_1401254_Fe.