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Today's prosecution practice tip: don't use the phrase "the present invention" in the specification
December 18, 2008

In a decision last week, the Federal Circuit affirmed a district court's claim construction and its related summary judgment of noninfringement. The district court held the applicable claim term was narrower than the "lay understanding" of the term, based on the specification. Because the specification was clear, the district court refused to consider the prosecution history in the claim construction analysis.

The Federal Circuit agreed that the specification supported the district court's narrower reading of the term, noting the specification repeatedly characterized as "the present invention" the narrower understanding of the term. The court also noted that while it must consider the prosecution history, the prosecution history was "not particularly helpful to either party's claim construction position." As a result, the Federal Circuit affirmed the district court's claim construction. Because it was undisputed there was no infringement under this construction, the court also affirmed the summary judgment of noninfringement.

More detail of Netcraft Corp. v. eBay, Inc. after the jump.

Netcraft owns two patents related to internet billing methods. Netcraft sued PayPal and its parent company, eBay, for infringement of the patents. The following claim is representative, with the relevant limitation emphasized:

1. An Internet billing method for a plurality of customers and a plurality of vendors of products or services for transactions over the Internet between a purchasing customer of the plurality of customers and a selling vendor of the plurality of vendors, wherein, for each purchase transaction, a transaction amount is charged to the purchasing customer, and an amount is remitted to the selling vendor, comprising the steps by a third party of:
a) establishing a billing agreement with the purchasing customer, and a remitting agreement with the selling vendor, to bill the purchasing customer, and to remit to the selling vendor, for products and services purchased over the Internet by the purchasing customer from the selling vendor;
b) providing a communications link through equipment of the third party between the purchasing customer and the selling vendor through which the purchasing customer obtains information from the selling vendor with respect to a purchase of a product or service by the purchasing customer from the selling vendor;
c) obtaining at least one billing authorization for the purchase;
d) charging the transaction amount to the purchasing customer in accordance with the billing agreement; and
e) remitting an amount related to the purchase to the selling vendor in accordance with the remitting agreement.

Neither "communications link" nor "communications link through equipment of the third party" is found in the common specification of the patents outside the claims. The district court held the term to require the third party to provide internet access. While the district court noted the ordinary meaning of the term is broader than its construction, the specification constrained its meaning to only apply to internet access. Specifically, the district court held the specification described the third party provider as providing internet access not in the context of particular embodiments, but rather as a feature of "the present invention." The district court, finding the specification dispositive, declined to consider the parties' arguments regarding the prosecution history, and construed the term to mean "providing customer access to the internet." Because it was undisputed that PayPal and eBay do not provide internet access, the district court granted the defendants' motion for summary judgment of noninfringement. Netcraft appealed.

The Federal Circuit affirmed. First, the court noted the claims themselves to not "expressly indicate" whether the "communications link" requires providing internet access, and that the term does not appear in the patents outside the claims. As a result, the court, like the district court, examined the specification.

Here, the Federal Circuit noted several passages in the specification that described "the present invention," including the objects of the invention in the Summary of Invention and the Abstract. As stated by the court: "the common specification, including the Abstract, consistently describes the invention in terms of a third party providing internet access to customers." The court rejected Netcraft's arguments that other embodiments were disclosed in the figures, noting they were simply additional details in the embodiments that required a third party internet provider. Further, the specification uses the term "equipment" consistently to refer to equipment that enables internet access.

The court also rejected Netcraft's claim differentiation arguments, noting the district court's construction was not at odds with the dependent claims. For example, one dependent claim stated "wherein the third party is an Internet access provider, a cable television company, a telephone company, or a company offering financial services." Netcraft argued this meant the third party in claim 1 could not be limited to a party providing internet access, or the dependent claim would be broader in scope. However, the specification discloses that several companies, including cable television and phone companies will provide internet access. As a result, the court held the dependent claim to simply be an enumeration of the types of companies that would provide the necessary internet access.

Next, unlike the district court, the Federal Circuit turned to the prosecution history, observing that the parties' arguments based on the prosecution history must be considered. Here, however, the court concluded the prosecution history "lacks the clarity of the specification regarding the meaning of the claim terms at issue," and was therefore "less useful for claim construction purposes." As a result, the prosecution history was not helpful to either party. Accordingly, the court held the district court's claim construction was correct, and affirmed the finding of noninfringement.

To read the full decision in Netcraft Corp. v. eBay, Inc., click here.

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