On preambles "limiting the environment": Advanced Software v. Fiserv

**What happens when parties don't raise arguments on appeal?

In that ruling, the district court did not distinguish
between using method claim 1 and system claim 9. Cf.
NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282,
1317 (Fed. Cir. 2005). The district court also did not
analyze the difference between making and using a
claimed system under 35 U.S.C. § 271(a), a distinction
addressed by our recent decision in Centillion Data Sys-
tems, LLC v. Qwest Communications International, Inc.,
631 F.3d 1279 (Fed. Cir. 2011). Because the district court
did not address those issues and the parties do not raise
them as grounds for decision of this appeal,1 we do not
address the possible consequences of the distinction
between those two types of claims for purposes of this
case. We consider only whether Fiserv could “use” the
claimed inventions by validating checks with Secure Seal
or using a system comprising a scanner and a computer
running Secure Seal to validate checks.

Footnote 1 contains an important conclusion:

Advanced Software addresses the difference be-
ystem and method claims when it argues that
system claims cannot be construed to contain steps. We
need not resolve that question because we construe the
preamble steps of system claim 9 to merely define the
financial instrument that the claimed system validates.
For infringement purposes, the preamble steps need not
be performed by the system or the party that uses the
system.

**Uniloc is discussed

Our recent decision in Uniloc USA, Inc. v. Microsoft
Corp., 632 F.3d 1292 (Fed. Cir. 2011), helps resolve that
question. That case involved a claim to a “remote regis-
tration station incorporating remote licensee unique ID
generating means, said station forming part of a registra-
tion system . . . including local licensee unique ID gener-
ating means . . . .” Id. at 1297 (emphasis removed).
Microsoft argued that it did not directly infringe that
claim because it did not “use” a “local licensee unique ID
generating means.” Id. at 1308. Although its customers
used such a means, Microsoft contended that there could
be no direct infringement under BMC and Muniauction.
This court disagreed, holding that Uniloc’s claim, which
recited the “remote registration station incorporating
remote licensee unique ID generating means,” was di-
rected to the actions of a single party. We held that the
remainder of the claim, “said station forming part of a
registration system . . . including local licensee unique ID
generating means,” only “define[d] the environment in
which that [remote] registration station must function.” Id. at 1309.


Of the Centillion case:

Although a patented system is “used” when a party “con-
trols the system as a whole and obtains benefit from it,”
Centillion, 631 F.3d at 1285, the system of claim 9 does
not include an encrypting computer or printer.

Fiserv's argument about the preamble creating elements
in the patent claim was not successful:

We disagree with Fiserv’s framing of the issue. There
is no reason why a preamble cannot describe a financial
instrument in terms of the steps required to create it, and
that is exactly what the preambles of the asserted claims
do. Although the terms “in which” and “wherein” set off
the limitations on the claim environments less clearly
than the language in Uniloc, it remains the case that the
asserted claims of the ’110 patent recite a process or
system for validating checks, not for encrypting and
printing them.

Of the Bicon case:

Fiserv relies on a statement from that case that
“[p]reamble language that merely states the purpose or
intended use of an invention is generally not treated as
limiting the scope of the claim.” Fiserv’s argument misin-
terprets the meaning of that passage from Bicon. Al-
though it is true that preamble language that states the
purpose of an invention is generally not regarded as
setting forth an additional limitation to a claim, in this
case we are not construing the preamble’s statement of
purpose to add a limitation to the claim. Rather, we are
looking to the statement of purpose to distinguish be-
tween those limitations that describe the environment in
which a claim operates from the limitations that must be
performed by an accused infringer.


The concept of a preamble "limiting the environment":

Advanced Software agrees that the preamble is limiting,
but it argues that the preamble simply defines the envi-
ronment in which an infringing act must be performed or
describes the capabilities an infringing system must have.
Fiserv offers no reason why the antecedent basis, depend-
ent claims, specification, or prosecution history would
affect Advanced Software’s theory that the preamble steps
limit only the claimed environment, not the claimed method or system.

On changing legal positions:

Notably, Fiserv does not contend that Advanced
Software waived the right to assert its current position.
Indeed, Fiserv could not make such an argument, because
Advanced Software set forth its position in a timely
fashion in response to Fiserv’s noninfringement argu- ments.

As to a summary judgment issue:

From the district court’s comments on the inducement
issue, we are unsure whether the court regarded the two
grounds it cited for entering summary judgment—
untimeliness and an insufficient evidentiary showing—to
be independent grounds for its judgment. As to the latter,
however, Advanced Software proffered evidence that
Fiserv knew of the ’110 patent and instructed its bank
customers about how to use Secure Seal to validate
checks. That evidence is sufficient to create a genuine
issue of material fact as to whether Fiserv had the requi-
site specific intent to induce infringement. See DSU Med.
Corp. v. JMS Co., 471 F.3d 1293, 1305-06 (Fed. Cir. 2006)
(en banc).


Note also the text:

(...) then encrypts the combination by dividing the
concatenated information by a specially chosen polyno-
mial known as a “Chebyshov polynomial.” Although
Fiserv may ultimately be able to resolve its interpretation
of the claim with the preferred embodiment of the ’110
patent, it has not presented us with any such resolution,
and thus we cannot accept that argument as an alterna-
tive ground for affirmance.


Sadly, the CAFC misspelled
Chebyshev polynomial.

**As to stipulations:

Fiserv asserts that Advanced Software stipulated that those
limitations should be construed to have the same meaning
despite “minor” differences in language. Advanced Soft-
ware contends that it did not so stipulate, but instead
sought a similar broad construction for both patents. As
evidence of the purported stipulation, Fiserv points to the
joint claim construction chart. That chart, however,
supports Advanced Software’s contention that it sought
the same broad construction for both patents, not that it
agreed that the construction should be the same even if
the court adopted a narrow construction for the ’624
patent.

As to embodiments:

Fiserv contends that its proposed two-stage construc-
tion is required by the specification, but as support for its
construction Fiserv repeatedly cites to language discuss-
ing particular preferred embodiments. Fiserv asserts
that the language it cites refers to the invention as a
whole, not just to preferred embodiments, because the
language comes from the Summary of the Invention
portion of the ’110 patent specification. However, each of
the portions of the Summary to which Fiserv refers is
from a paragraph that discusses a particular embodiment.
See ’110 patent, col. 3, ll. 45-58; col. 4, ll. 12-20. Those
portions of the specification are therefore most naturally
interpreted as being limited to embodiments of the inven-
tion.


**On being hoisted on one's own petard:

That
argument, however, applies with equal force to Fiserv’s
specification citations because the phrase “encrypted in
combination with” does not appear anywhere in the
specification. Nonetheless, the quoted language from the
specification supports the broader construction because it
specifically describes an encryption algorithm that com-
bines selected information and keys without describing an
initial combining step.


**On appealing the denial of motions for summary judgment:

Fiserv has filed a cross-appeal challenging the district
court’s denial of its summary judgment motion on obvi-
ousness and anticipation (but not the court’s order of
dismissal of its invalidity counterclaim without prejudice).
We lack jurisdiction over the cross-appeal because “[t]he
final judgment rule prohibits a party from appealing a
district court’s denial of a motion for summary judgment.”
Lermer Germany GmbH v. Lermer Corp., 94 F.3d 1575,
1576 (Fed. Cir. 1996). The Supreme Court has explained
that appellate courts lack jurisdiction over the denial of a
motion for a summary judgment based on disputed issues
of fact because such a denial “does not settle or even
tentatively decide anything about the merits of the claim.”
Switz. Cheese Ass’n, Inc. v. E. Horne’s Mkt., Inc., 385 U.S.
23, 25 (1966). Because there has been no final determina-
tion on the merits of Fiserv’s invalidity counterclaim, we have
no jurisdiction to address that claim.