Patent prosecutors, be aware: syntax isn’t just for English majors anymore. Think back on those junior high days spent diagramming sentences, because how you organize patent claims is just as significant as what you say.
More importantly, if you’re litigating a patent, make sure you tell the trial court all of your problems with the patent because you might only get one shot. As HTC learned, forgetting to raise an issue in court can have much more dire consequences than forgetting your homework.
HTC Corp. v. IPCom GmbH & Co., KG, No. 2011-1004 (Fed. Cir. Jan. 30, 2012) (Judges Bryson, Linn, and O’Malley)
This case is a patent infringement action involving cell phones. The patent covers cell phone “handovers,” which occur when cell phones switch from one tower to another. For a brief period of time, the phone continues to store the data that links it to the first tower after it has linked to the second tower so that the call won’t drop in the middle of the transfer.
HTC argued that IPCom’s patent is invalid for 2 reasons: (1) the claims are indefinite because the patent doesn’t disclose the required structure to perform the handover, and (2) the claims are indefinite because they claim both a system for performing a method and method steps. The problem with claiming both a system and a method is that people using the technology will be unclear on what will actually infringe the patent claims—whether it’s making the system or performing the steps of the method that infringes.
The district court rejected HTC’s first argument—that the patent didn’t disclose the necessary structure—because, according to the court, someone who understands the technology would know that the necessary structure for a handover is a processor (something to handle the data) and a transceiver (something that sends and receives the data). However, the district court agreed with HTC that the patent claims are indefinite because they cover both a system and a method.
Revenge of the English Majors
The Federal Circuit said the district court missed the connection. According to the Federal Circuit, the district court didn’t interpret the claims correctly, and its flawed claim construction led it to the wrong conclusion. The Federal Circuit’s claim construction came down to basic grammar. Here’s how claim 1 starts: “A mobile station [i.e., cell phone] for use with a network including…” Then the claim lists 6 functions. The district court and HTC said that the “mobile station” (i.e., cell phone) performs the functions, so the claim improperly includes both an apparatus and method step. But the Federal Circuit said that the network performs the listed functions. The court explained that its construction makes more sense grammar-wise because the 6 functions immediately follow “network including,” and “[m]odifiers should be placed next to the words the modify.” (See page 7 of the opinion). The court cited Strunk & White, and patent-litigating liberal arts majors everywhere were vindicated. With the correct claim construction, the Federal Circuit said that, although the form of the claims was “unconventional,” they only disclosed an apparatus, so they are not invalid.
You Snooze, You Lose
The other interesting aspect of this case is the Federal Circuit’s take on HTC’s alternative argument—that the patent doesn’t disclose the physical structure necessary to perform the claimed function. The district court said the only hardware the patent requires is a processor and a transceiver. The Federal Circuit agreed—sort of. HTC forgot something, though: IPCom’s patent needs to include an algorithm for the processor and the transceiver to execute. HTC didn’t bring up the algorithm at the district court, so the district court never looked at whether an algorithm existed.
That missing algorithm could have been IPCom’s downfall. The Federal Circuit flatly said, “The district court misstated the law … when it stated that disclosure of a processor and a transceiver alone was sufficient to provide structure to these claims.” (See page 17 of the opinion.) But HTC’s first mention of the missing algorithm was in its reply brief at the Federal Circuit. By that point, the court called the argument “too little and too late.”
The Federal Circuit essentially told HTC it could have won if it had focused on the right flaw, and then, to add insult to injury, the court determined that HTC waived the algorithm argument by not raising it the first time around. The court decided not to send the issue back to the district court, saying:
[I]f we were to remand the issue, the district court would have to conduct additional fact finding, and the parties potentially would have to conduct additional discovery. Remand, in sum, would stymie judicial economy because it would require the district court and the parties to invest resources in an issue that could have been raised for the first time below.
In other words: you snooze, you lose. Since the Federal Circuit had reversed the district court’s invalidity decision on the “apparatus and method claims” argument, IPCom walked away with a valid patent, and HTC walked away with a bunch of legal fees.
Read the HTC opinion, if you’re interested.