Court Opinion

ID: 2798934
Source: CourtListenerOpinion
Date Created: 2015-05-06 17:01:47.5577+00
Date Added: 2024-06-11T12:12:16.091786
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
                  ______________________

          EON CORP. IP HOLDINGS LLC,
                Plaintiff-Appellant

                                 v.

                 AT&T MOBILITY LLC,
                    Defendant-Appellee
                  ______________________

                        2014-1392
                  ______________________

    Appeal from the United States District Court for the
District of Delaware in No. 1:13-cv-00910-RGA, Judge
Richard G. Andrews.

          --------------------------------------------------

          EON CORP. IP HOLDINGS LLC,
                Plaintiff-Appellant

                                 v.

              FLO TV INCORPORATED,
                  Defendant-Appellee

                      MOBITV INC.,
                     Defendant-Appellee

         U.S. CELLULAR CORPORATION,
                Defendant-Appellee
2           EON CORP. IP HOLDINGS LLC   v. AT&T MOBILITY LLC

SPRINT NEXTEL CORPORATION, HTC AMERICA
INC., QUALCOMM, INC., SIMPLEXITY, LLC, D/B/A
     WIREFLY, MOTOROLA MOBILITY LLC,
             Defendants-Appellees

                LETSTALK.COM INC.,
                      Defendant
                ______________________

                       2014-1393
                 ______________________

    Appeal from the United States District Court for the
District of Delaware in No. 1:10-cv-00812-RGA, Judge
Richard G. Andrews.
                ______________________

                  Decided: May 6, 2015
                 ______________________

   JOHN L. HENDRICKS, Reed & Scardino LLP, Austin,
TX, argued for plaintiff-appellant. Also represented by
DANIEL ROBINSON SCARDINO, JOHN MATTHEW MURRELL.

    DIANA SANGALLI, Duane Morris LLP, Houston, TX,
argued for defendant-appellee AT&T Mobility LLC. Also
represented by THOMAS W. SANKEY; JOSEPH POWERS,
Philadelphia, PA; KRISTINA CAGGIANO KELLY, Washing-
ton, DC; JACK B. BLUMENFELD, Morris, Nichols, Arsht &
Tunnell LLP, Wilmington, DE.

   HARRISON J. FRAHN, IV, Simpson Thacher & Bartlett,
LLP, Palo Alto, CA, argued for all defendants-appellees in
2014-1393. Defendants-appellees FLO TV Incorporated,
Qualcomm, Inc. also represented by JEFFREY ERIC
OSTROW, JEFFREY E. DANLEY, PATRICK E. KING; VICTOR
COLE, New York, NY.
EON CORP. IP HOLDINGS LLC   v. AT&T MOBILITY LLC          3

    DARALYN JEANNINE DURIE, Durie Tangri LLP, San
Francisco, CA, for defendant-appellee MobiTV Inc. Also
represented by LAURA MILLER.

    RICHARD JOHN O'BRIEN, Sidley Austin LLP, Chicago,
IL, for defendant-appellee U.S. Cellular Corporation. Also
represented by ROBERT D. LEIGHTON; RYAN C. MORRIS,
Washington, DC.

    KAREN ANN JACOBS, Morris, Nichols, Arsht & Tunnell
LLP, Wilmington, DE, for defendants-appellees Sprint
Nextel Corporation, Simplexity, LLC, d/b/a Wirefly.
Sprint Nextel Corporation also represented by MEGAN E.
DELLINGER, JENNIFER YING.

    HEIDI LYN KEEFE, Cooley LLP, Palo Alto, CA, for de-
fendant-appellee HTC America Inc. Also represented by
LAM K. NGUYEN, MARK R. WEINSTEIN, KYLE DAKAI CHEN.

     STEVEN MOORE, Kilpatrick Townsend & Stockton
LLP, San Francisco, CA, for defendant-appellee Motorola
Mobility LLC. Also represented by FREDERICK LEE
WHITMER, New York, NY; CHRISTOPHER SCHENCK, Seat-
tle, WA; CARL ELLIOTT SANDERS, Winston-Salem, NC.
                ______________________

Before PROST, Chief Judge, NEWMAN and BRYSON, Circuit
                       Judges.
PROST, Chief Judge.
    In these consolidated cases, EON Corp. IP Holdings
LLC (“EON”) asserts U.S. Patent No. 5,663,757 (“’757
patent”) against a number of defendants. The district
court granted the defendants’ motion for summary judg-
ment, holding all claims of the ’757 patent invalid as
indefinite. In particular, the district court found that the
specification failed to disclose an algorithm to provide
4           EON CORP. IP HOLDINGS LLC   v. AT&T MOBILITY LLC

structure for various computer-implemented means-plus-
function elements. On appeal, we affirm.
                     I. BACKGROUND
    The asserted ’757 patent, which issued on September
2, 1997, is directed to software embodied in a “local sub-
scriber data processing station” that operates in tandem
with a television to interconnect various interactive
features of the television. The software allows actions
such as “impulse purchase transactions with immediate
payment,” audience participation voting, and sorting
television programs by theme. ’757 patent col. 2 l. 65.
EON alleges that “the modern iteration of the ’757 Pa-
tent’s local subscriber data processing station is a
smartphone with certain capabilities.” Appellant’s Br. 5–
6.
    Consequently, on September 23, 2010, EON filed an
action   against    seventeen   defendants,    including
smartphone manufacturers, cellular network providers,
and smartphone content providers (“the FLO TV case”).
Nine months later, on June 14, 2011, EON sued several
other defendants in a separate action (“the AT&T case”).
The two cases were consolidated through claim construc-
tion.
    At the same time, the ’757 patent went through two
reexaminations. The claims were amended in the first
reexamination, and all claims as amended were confirmed
in the second reexamination. However, on November 1,
2013, the defendants in the FLO TV action moved for
summary judgment of invalidity for indefiniteness. To
resolve the motion, the district court held a claim con-
struction hearing on January 8, 2014, a summary judg-
ment hearing on January 9, 2014, and a hearing to
receive expert testimony on February 5, 2014. Soon after
the hearings, the district court granted summary judg-
ment to the FLO TV defendants, finding that all claims of
EON CORP. IP HOLDINGS LLC   v. AT&T MOBILITY LLC           5

the ’757 patent were invalid as indefinite. The eight
terms that were held to be indefinite are the following:
    1. “means under control of said replaceable software
       means for indicating acknowledging shipment of an
       order from a remote station” (Claim 7);
    2. “means controlled by replaceable software means
       operable with said operation control system for . . .
       reconfiguring the operating modes by adding or
       changing features and introducing new menus”
       (Claims 1-6, 8-10);
    3. “means responsive to said self contained software
       for establishing a mode of operations for selection of
       one of a plurality of authorized television program
       channels” (Claim 8);
    4. “means establishing a first menu directed to differ-
       ent interactively selectable program theme subsets
       available from said authorized television program
       channels” (Claim 8);
    5. “means for causing selected themes to automatical-
       ly display a second menu” (Claim 8);
    6. “means controlled by replaceable software means
       operable with said operation control system for es-
       tablishing and controlling a mode of operation that
       records historical operating data of the local sub-
       scriber’s data processing station” (Claim 9);
    7. “means controlled by replaceable software means
       operable with said operat[ion] control system for
       establishing and controlling fiscal transactions
       with a further local station” (Claim 10); and
    8. “means for establishing an accounting mode of op-
       eration for maintaining and reporting fiscal trans-
       actions incurred in the operation of the local
       subscriber’s data processing station” (Claim 10).
6            EON CORP. IP HOLDINGS LLC   v. AT&T MOBILITY LLC

    Following its summary judgment order, the district
court entered final judgment of invalidity on March 5,
2014 in the FLO TV case. The parties in the AT&T case
then entered into a joint stipulation to final judgment of
invalidity, which the district court granted on March 18,
2014. EON appeals, and we have jurisdiction under 28
U.S.C. § 1295(a)(1).
                       II. DISCUSSION
     We review the grant of summary judgment of indefi-
niteness de novo, applying the same standard used by the
district court. Ethicon Endo-Surgery, Inc. v. U.S. Surgi-
cal Corp., 149 F.3d 1309, 1315 (Fed. Cir. 1998). Summary
judgment is appropriate if, viewing the evidence in the
light most favorable to the non-moving party, the movant
shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of
law. Fed. R. Civ. P. 56; Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 255 (1986). We review the district court’s
ultimate conclusion of indefiniteness under 35 U.S.C.
§ 112 de novo. Eidos Display, LLC v. AU Optronics Corp.,
779 F.3d 1360, 1364 (Fed. Cir. 2015). In this case, the
district court made numerous detailed findings of fact.
Because the indefiniteness inquiry here is intertwined
with claim construction, see Atmel Corp. v. Info. Storage
Devices, Inc., 198 F.3d 1374, 1379 (Fed. Cir. 1999) (“[A]
court’s determination of the structure that corresponds to
a particular means-plus function limitation is indeed a
matter of claim construction.”), we review these subsidi-
ary factual determinations for clear error. Teva Pharm.
USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831, 836 (2015); see
also Biosig Instruments, Inc. v. Nautilus, Inc., No. 2012-
1289, slip op. at 5 (Fed. Cir. Apr. 27, 2015); Fed. R. Civ. P.
52(a)(6) (“Findings of fact . . . must not be set aside unless
clearly erroneous . . . .”).
EON CORP. IP HOLDINGS LLC   v. AT&T MOBILITY LLC          7

     The parties agree that the claim terms at issue are all
means-plus-function terms governed by 35 U.S.C. § 112
¶ 6. 1 Section 112, paragraph 6 states that:
   An element in a claim for a combination may be
   expressed as a means or step for performing a
   specified function without the recital of structure,
   material, or acts in support thereof, and such
   claim shall be construed to cover the correspond-
   ing structure, material, or acts described in the
   specification and equivalents thereof.
Means-plus-function claim limitations under § 112 ¶ 6
must satisfy the definiteness requirement of § 112 ¶ 2. S3
Inc. v. NVIDIA Corp., 259 F.3d 1364, 1367 (Fed. Cir.
2001).
    The parties also agree that the functions claimed in
the terms at issue are all performed by computer soft-
ware. It is well-established that the corresponding struc-
ture for a function performed by a software algorithm is
the algorithm itself. See WMS Gaming, Inc. v. Int’l Game
Tech., 184 F.3d 1339, 1348–49 (Fed. Cir. 1999). Accord-
ingly, “[i]n cases involving a computer-implemented
invention in which the inventor has invoked means-plus-
function claiming, this court has consistently required
that the structure disclosed in the specification be more
than simply a general purpose computer or microproces-
sor.” Aristocrat Techs. Austl. Pty Ltd. v. Int’l Game Tech.,
521 F.3d 1328, 1333 (Fed. Cir. 2008).

   1    Paragraph 6 of 35 U.S.C. § 112 was replaced with
newly designated § 112(f) when § 4(c) of the America
Invents Act (AIA), Pub. L. No. 112-29, took effect on
September 16, 2012. Because the applications resulting
in the patents at issue in this case were filed before that
date, we will refer to the pre-AIA version of § 112.
8           EON CORP. IP HOLDINGS LLC   v. AT&T MOBILITY LLC

                 A. The Katz Exception
    In this case, EON does not dispute that the ’757 pa-
tent discloses no algorithms. It is uncontested that the
only structure disclosed in the ’757 patent is a micropro-
cessor. For this reason, EON relies on an exception to the
algorithm rule created in In re Katz Interactive Call
Processing Patent Litigation, 639 F.3d 1303 (Fed. Cir.
2011). Katz held that a standard microprocessor can
serve as sufficient structure for “functions [that] can be
achieved by any general purpose computer without spe-
cial programming.” Katz, 639 F.3d at 1316. In Katz,
claim terms involving basic “processing,” “receiving,” and
“storing” functions were not necessarily indefinite because
a general purpose computer need not “be specially pro-
grammed to perform the recited function.” Id. However,
other claim terms involving conditionally coupling calls
were indefinite because those functions required special
programming and no algorithm was disclosed. Id. at
1315.
    This court has since analyzed the “narrow” Katz ex-
ception once, finding that it did not apply. See Ergo
Licensing, LLC v. CareFusion 303, Inc., 673 F.3d 1361,
1364 (Fed. Cir. 2012). A representative example of one of
the means-plus-function terms at issue in Ergo follows:
    programmable control means coupled with said
    adjusting means for controlling said adjusting
    means, said programmable control means having
    data fields describing metering properties of indi-
    vidual fluid flows.
U.S. Patent No. 5,507,412 claim 1 (filed June 14, 1998).
The Ergo court explained that “[i]t is only in the rare
circumstances where any general-purpose computer
without any special programming can perform the func-
tion that an algorithm need not be disclosed.” Id. at 1365.
The court found that an algorithm was needed to lend
sufficient structure to the terms at issue because “[t]he
EON CORP. IP HOLDINGS LLC   v. AT&T MOBILITY LLC        9

‘control means’ at issue in this case cannot be performed
by a general-purpose computer without any special pro-
gramming. The function of ‘controlling the adjusting
means’ requires more than merely plugging in a general-
purpose computer.” Id.
     EON asserts that the functions claimed in the ’757
patent do not involve “special programming”—and thus
fall within the Katz exception—because they are relative-
ly simple to implement. However, the Katz exception is
not so broad. As we stated in Katz, a microprocessor can
serve as structure for a computer-implemented function
only where the claimed function is “coextensive” with a
microprocessor itself. Katz, 639 F.3d at 1316. Examples
of such coextensive functions are “receiving” data, “stor-
ing” data, and “processing” data—the only three functions
on which the Katz court vacated the district court’s deci-
sion and remanded for the district court to determine
whether disclosure of a microprocessor was sufficient.
     Katz’s “special programming” language has its origins
in WMS Gaming. As mentioned above, WMS Gaming
held that the corresponding structure for a software
algorithm is the algorithm. In WMS Gaming, disclosure
of a general purpose computer was insufficient because
“[a] general purpose computer, or microprocessor, pro-
grammed to carry out an algorithm creates ‘a new ma-
chine, because a general purpose computer in effect
becomes a special purpose computer once it is pro-
grammed to perform particular functions pursuant to
instructions from program software.’” WMS Gaming, 184
F.3d at 1348 (quoting In re Alappat, 33 F.3d 1526, 1545
(Fed. Cir. 1994) (en banc) (abrogated by In re Bilski, 545
F.3d 943 (Fed. Cir. 2008), aff’d but criticized sub nom.
Bilski v. Kappos, 561 U.S. 593 (2010))). As the foregoing
citation demonstrates, WMS Gaming borrows language
from Alappat. Alappat, which was predominantly a § 101
case, held that the recited algorithm claimed patent-
eligible subject matter because its combination with a
10           EON CORP. IP HOLDINGS LLC   v. AT&T MOBILITY LLC

general purpose computer created a new “machine” for
the purposes of § 101. 33 F.3d at 1545. Specifically,
Alappat reasoned that “a general purpose computer in
effect becomes a special purpose computer once it is
programmed to perform particular functions pursuant to
instructions from program software.” 2 Id. The Alappat
court used this explanation to justify an expansive view of
§ 101 under which nearly any algorithm was patentable
so long as the claim was written to a computer loaded
with the software. Id. (“[A] computer . . . is apparatus not
mathematics.”).
    By way of WMS Gaming, the “special programming”
language in Katz derives from Alappat’s legacy. After
WMS Gaming, a number of cases held means-plus-
function claims indefinite for failure to disclose a suffi-
cient algorithm.     See, e.g., Blackboard, Inc. v. De-
sire2Learn, Inc., 574 F.3d 1371, 1385 (Fed. Cir. 2009); Net
MoneyIN, Inc. v. VeriSign, Inc., 545 F.3d 1359, 1367 (Fed.
Cir. 2008); Finisar Corp. v. DirecTV Grp., 523 F.3d 1323,
1340–41 (Fed. Cir. 2008); Aristocrat, 521 F.3d at 1338.
For the “processing,” “receiving,” and “storing” claim
terms, Katz distinguished those cases using WMS Gam-
ing’s vocabulary, which culminated in Katz’s “special
programming” phrase:
     Those cases involved specific functions that would
     need to be implemented by programming a gen-
     eral purpose computer to convert it into a special
     purpose computer capable of performing those

     2   Building on Alappat, WMS Gaming reasoned that
“[t]he instructions of the software program that carry out
the algorithm electrically change the general purpose
computer by creating electrical paths within the device.
These electrical paths create a special purpose machine
for carrying out the particular algorithm.” WMS Gaming,
184 F.3d at 1348.
EON CORP. IP HOLDINGS LLC   v. AT&T MOBILITY LLC          1
                                                          1

   specified functions. See, e.g., Aristocrat, 521 F.3d
   at 1333–34; Harris Corp. v. Ericsson Inc., 417
   F.3d 1241, 1253 (Fed. Cir. 2005); WMS Gaming,
   184 F.3d at 1349. By contrast, in the seven claims
   identified above, Katz has not claimed a specific
   function performed by a special purpose computer,
   but has simply recited the claimed functions of
   “processing,” “receiving,” and “storing.” Absent a
   possible narrower construction of the terms “pro-
   cessing,” “receiving,” and “storing,” discussed be-
   low, those functions can be achieved by any
   general purpose computer without special pro-
   gramming.
Katz, 639 F.3d at 1316.
     Taken in context, then, “special programming” does
not denote a level of complexity. On this point, the dis-
trict court erred in holding that “special programming”
does not encompass commercially available off-the-shelf
software. To the contrary, and as originally described in
Katz, “special programming” includes any functionality
that is not “coextensive” with a microprocessor or general
purpose computer. Id. In other words—to use the lan-
guage of Alappat—the general purpose computer becomes
a special purpose computer when loaded with the special
programming, so a general purpose computer or micro-
processor no longer lends sufficient structure to the claim.
Therefore, as is plain from this review, the Katz exception
is a necessary corollary to the general rule stated in WMS
Gaming and further elaborated in Aristocrat and other
later cases. A microprocessor or general purpose comput-
er lends sufficient structure only to basic functions of a
microprocessor. All other computer-implemented func-
tions require disclosure of an algorithm.
    Before moving on, we note that Alappat has been su-
perseded by Bilski, 561 U.S. at 605–06, and Alice Corp. v.
CLS Bank Int’l, 134 S. Ct. 2347 (2014). Nonetheless,
12           EON CORP. IP HOLDINGS LLC   v. AT&T MOBILITY LLC

WMS Gaming and Katz remain correctly decided. WMS
Gaming and Katz are consistent with recent Supreme
Court precedent, including Nautilus, Inc. v. Biosig In-
struments, Inc., which warned against “diminish[ing] the
definiteness requirement’s public-notice function and
foster[ing] the innovation-discouraging zone of uncertain-
ty against which this Court has warned.” 134 S. Ct. 2120,
2130 (2014) (citation omitted) (internal quotation marks
omitted). The disclosure of structure under § 112 ¶ 6
serves the “purpose of limiting the scope of the claim to
the particular structure disclosed, together with equiva-
lents.” Aristocrat, 521 F.3d at 1336. A general purpose
computer is flexible—it can do anything it is programmed
to do. Id. at 1333. Therefore, the disclosure of a general
purpose computer or a microprocessor as corresponding
structure for a software function does nothing to limit the
scope of the claim and “avoid pure functional claiming.”
Id. As such, when a patentee invokes means-plus-
function claiming to recite a software function, it accedes
to the reciprocal obligation of disclosing a sufficient algo-
rithm as corresponding structure.
     B. Role of the Person of Ordinary Skill in the Art
     EON also argues that a microprocessor can serve as
sufficient structure for a software function if a person of
ordinary skill in the art could implement the software
function. This argument is meritless. In fact, we have
repeatedly and unequivocally rejected this argument: a
person of ordinary skill in the art plays no role whatsoev-
er in determining whether an algorithm must be disclosed
as structure for a functional claim element. See Noah
Sys. v. Intuit Inc., 675 F.3d 1302, 1313 (Fed. Cir. 2012);
Blackboard, 574 F.3d at 1385; Aristocrat, 521 F.3d at
1337.
    To elaborate, “our case law regarding special purpose
computer-implemented means-plus-functions claims is
divided into two distinct groups: First, cases in which the
EON CORP. IP HOLDINGS LLC   v. AT&T MOBILITY LLC          1
                                                          3

specification discloses no algorithm; and second, cases in
which the specification does disclose an algorithm but a
defendant contends that disclosure is inadequate.” Noah,
675 F.3d at 1313. Where the specification discloses no
algorithm, the skilled artisan’s knowledge is irrelevant.
Id. (citing Aristocrat, 521 F.3d at 1337). Where the speci-
fication discloses an algorithm that the accused infringer
contends is inadequate, we judge the disclosure’s suffi-
ciency based on the skilled artisan’s perspective. Id.
(citing Aristocrat, 521 F.3d at 1337; AllVoice Computing
PLC v. Nuance Commc’ns, Inc., 504 F.3d 1236, 1245 (Fed.
Cir. 2007)). The parties agree that the ’757 patent’s
specification discloses no algorithms, so this case falls in
the first category, in which the skilled artisan’s
knowledge is irrelevant.
    EON’s argument, identical to many we have previous-
ly rejected, “conflates the definiteness requirement of
section 112, paragraphs 2 and 6, and the enablement
requirement of section 112, paragraph 1.” Blackboard,
574 F.3d at 1385. “Enablement of a device requires only
the disclosure of sufficient information so that a person of
ordinary skill in the art could make and use the device. A
section 112 paragraph 6 disclosure, however, serves the
very different purpose of limiting the scope of the claim to
the particular structure disclosed, together with equiva-
lents.” Aristocrat, 521 F.3d at 1336. Accordingly, “[t]he
question before us is whether the specification contains a
sufficiently precise description of the ‘corresponding
structure’ to satisfy section 112, paragraph 6, not whether
a person of skill in the art could devise some means to
carry out the recited function.” Blackboard, 574 F.3d at
1385.
C. Application of the Algorithm Requirement to this Case
    In light of the foregoing discussion, resolution of this
case is straightforward. The district court made explicit
factual findings, based on expert testimony, that each of
14           EON CORP. IP HOLDINGS LLC   v. AT&T MOBILITY LLC

the eight claim terms at issue recited complicated, cus-
tomized computer software. We see no clear error in any
of the district court’s factual findings, nor any error in the
district court’s ultimate conclusion of indefiniteness.
     Significantly, EON does not contend on appeal that
the terms at issue recite functions that are coextensive
with a microprocessor. EON also does not differentiate
between any of the claim terms in its argument. In fact,
EON cites to testimony from its expert that a person
skilled in the art would need to consult algorithms outside
the specification to implement the claimed functions.
Similarly, based on expert testimony, the district court
found that “special code would have to be written in order
to accomplish the claimed functionality.” EON Corp. IP
Holdings, LLC v. FLO TV Inc., No. CV 10-812-RGA, 2014
WL 906182, at *5 (D. Del. Mar. 4, 2014). As discussed
above, this finding proves more than is necessary, as the
defendants must only show by clear and convincing
evidence that the terms at issue do not recite basic func-
tions of a microprocessor. Therefore, the ’757 patent’s
disclosure of a microprocessor does not lend sufficient
structure to the means-plus-function terms at issue, and
the ’757 patent’s claims are indefinite.
                      III. CONCLUSION
    Accordingly, we affirm the district court’s grant of
summary judgment of invalidity. All claims of the ’757
patent are invalid for indefiniteness.
                        AFFIRMED