[co-author: David Grosby]

On September 23, 2010, Eon filed suit against seventeen defendants in the District Court of the District of Delaware, alleging infringement of U.S. Patent No. 5,663,757.  During the case, the '757 patent went through two reexaminations.  The claims were amended in the first reexamination, and then confirmed valid as amended in the second reexamination.  After the reexaminations, the District Court granted summary judgment for the defendants, holding that all claims of the '757 patent were indefinite under 35 U.S.C. § 112 ¶ 6.

Eon appealed.  On May 6, 2015, Chief Judge Prost of the Federal Circuit authored a decision clarifying the structure that patentees must disclose when using means-plus-function language in software patents.  Judges Newman and Bryson joined the opinion.

The '757 patent is directed to software embodied in a "local subscriber data processing station that operates in tandem with a television to interconnect various interactive features of the television."  The software supports actions including "impulse purchase transactions with immediate payment, audience participation voting, and sorting television programs by theme."  Eon's infringement position centered on the defendants' alleged manufacture and use of a smartphone as a modern iteration of the '757 patent's local subscriber data processing station.

Example claim terms that were held to be indefinite include "means under control of said replaceable software means for indicating acknowledging shipment of an order from a remote station" (claim 7); and "means controlled by replaceable software means operable with said operation control system for . . . reconfiguring the operation modes by adding or changing features and introducing new menus" (claims 1-6, 8-10).

35 U.S.C. § 112 ¶ 6 states that if the patentee uses means-plus-function claim limitations, the claims will be construed to cover only the corresponding structure in the specification and the equivalents thereof.  It is well-settled that the "structure" for functions performed by software is the particular algorithm that performs these functions, rather than just the computer hardware that the software runs on.  In Aristocrat Techs. Austl. Pty Ltd. v. Int'l Game Tech., the Federal Circuit stated that "in 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 microprocessor."  There is one narrow exception to this rule, as explained in In re Katz Interactive Call Processing Patent Litigation, that a standard microprocessor can serve as a sufficient structure if the functions claimed "can be achieved by any general purpose computer without special programming."

While Eon did not dispute that the '757 patent failed to disclose an algorithm, it did attempt to invoke the Katz exception.  But, the Federal Circuit had only analyzed this exception once, finding that it did not apply.  In Ergo Licensing, LLC v. CareFusion 303, Inc., the Court held that "[i]t is only in the rare circumstances where any general-purpose computer without any special programming can perform the function that an algorithm need not be disclosed."  Eon attempted to distinguish this case by claiming the '757 patent does not involve any "special programming" because it is relatively simple to implement.

The Federal Circuit rejected this contention, stating a microprocessor can only serve as the structure if the claimed function is "coextensive" with a microprocessor itself.  The Court's three examples of coextensive functions are receiving data, storing data, and processing data.  The Court followed this reasoning to hold "[a] microprocessor or general purpose computer lends sufficient structure only to basic functions of a microprocessor . . . [a]ll other computer-implemented functions require disclose of an algorithm."

The Court further stated that the purpose of § 112 ¶ 6 is to "limit . . . the scope of the claim to the particular structure disclosed, together with equivalents."  Eon contradicted this purpose, because claiming a general purpose computer or microprocessor does little or nothing to limit the ways in which the claimed functions can be implemented.  Thus, "when a patentee invokes means-plus-function claiming to recite a software function, it accedes to the reciprocal obligation of disclosing a sufficient algorithm as corresponding structure."

Eon did not argue that the functions at issue are coextensive with those of a microprocessor, and its expert stated that a person skilled in the art would need to consult algorithms outside the specification to implement the claimed functions.  As a result, the Federal Circuit found that the mere disclosure of a microprocessor was insufficient for the '757 patent, and therefore the claims containing those terms are indefinite.

This case reiterates that an algorithm must almost always be disclosed in the specification if the patentee is using means-plus-function claiming.  The narrow interpretation of the Katz exception will likely deter future parties from arguing that a general purpose computer or microprocessor serves as a sufficient structure for means-plus-function claim limitations.  However, the Court still left the boundaries of the Katz exception undefined.  Microprocessors are also capable of carrying out tasks such as adding, subtracting, multiplying, and dividing numbers, as well as moving data. Most microprocessors are also capable of floating point and even graphics operations.  Since the Court seems to have limited the Katz exception to only "basic functions" of a microprocessor, it remains unclear where the Court would draw the line between such a basic function and one that is more advanced.  Thus, the Court has left room -- albeit not much -- for parties using more advanced functions to argue that these functions are supported by standard microprocessors.

Eon Corp. IP Holdings LLC v. AT&T Mobility LLC (Fed. Cir. 2015)
Panel: Choef Judge Prost and Circuit Judges Newman and Bryson
Opinion by Chief Judge Prost