John Kong | November 28, 2012
ePlus, Inc. v. Lawson Software, Inc.
November 21, 2012
Dyk, Prost, O’Malley. Opinion by Prost.
This case serves as a reminder of the importance of having different claim types. ePlus’ jury verdict of infringement of two systems claims was vacated because the Federal Circuit found one means-plus-function element recited therein to lack the requisite corresponding structure being disclosed in the specification, thereby rendering the claims indefinite under 35 USC §112, second paragraph. However, the infringement of a similar method claim reciting the same function as the means-plus-function element was affirmed.
A jury found in favor of the plaintiff, ePlus, for the direct and indirect infringement of five claims (three method claims and two system claims) by Lawson’s computer software products and services. The invention is directed to online shopping, whereby a user adds desired items to an “order list” (or wish list), the order list is used to build a “requisition” once the user is ready to make a purchase, and the system determines what inventory will be used to complete or “fill” the requisition and generate “purchase orders” that are submitted to vendors. Prior art systems only enabled the user to generate a single purchase order that would be submitted to a single vendor. The claimed invention here divides a single requisition into multiple purchase orders that could be directed to different vendors. The claims are as follows:
26. A method comprising the steps of:
maintaining at least two product catalogs on a database containing data relating to items associated with the respective sources;
selecting the product catalogs to search;
searching for matching items among the selected product catalogs;
building a requisition using data relating to selected matching items and their associated source(s);
processing the requisition to generate one or more purchase orders for the selected matching items; and
determining whether a selected matching item is available in inventory.
Independent claim 28 is similar to claim 26, except that the last limitation in claim 28 recites:
converting data relating to a selected matching item and an associated source to data relating to an item and a different source.
The third and last method claim, claim 29, depends from claim 28.
The two system claims are indistinguishable for the purpose of the appeal, and representative claim 1 is as follows:
1. An electronic sourcing system comprising:
a database containing data relating to items associated with at least two vendors maintained so that selected portions of the database may be searched separately;
means for entering product information that at least partially describes at least one desired item;
means for searching for matching items that match the entered product information in the selected portions of the database;
means for generating an order list that includes at least one matching item selected by said means for searching;
means for building a requisition that uses data obtained from said database relating to selected matching items on said order list;
means for processing said requisition to generate purchase orders for said selected matching items; and
means for determining whether a selected matching item is available in inventory.
The Federal Circuit found that method claim 28 could not be infringed because no substantial evidence was presented by ePlus that shows, either directly or circumstantially, the converting data step was actually performed or used by Lawson or by any user. ePlus only presented evidence of the capability of the accused product, but not any actual act of infringement. Those customers whose testimony ePlus solicited either expressly rejected having ever used that functionality or denied knowing about it. Therefore, the infringement of method claims 28 and its dependent claim 29 were vacated.
As for the two system claims, the court could not find any disclosure in the specification that described any corresponding structure or algorithm for performing the claimed function recited for the means for processing element. This is a classic application of the rules set forth in the Federal Circuit’s 2008 Aristocrat decision.
ePlus tried arguing that it is not required to disclose a structure that corresponds to the overall function of generating purchase orders because implementing that functionality was already known prior to its subject patent. According to ePlus, the specification need only disclose those aspects of the claimed invention that do not exist in the prior art – i.e., using a single requisition to generate multiple purchase orders – which one of ordinary skill in the art would know how to implement in view of the prior art and the present specification.
This is exactly what Aristocrat clarified – the indefiniteness inquiry for a means-plus-function element is not what one of ordinary skill in the art would know or can implement, but rather, what the specification discloses and whether one of ordinary skill in the art would have understood that disclosure to identify the required structure. Aristocrat also clarified that, for a computer-implemented means-plus-function claim element, the specification must also disclose an algorithm describing how the claimed function is performed because the corresponding structure is the specially programmed computer having that algorithm and not a general purpose computer. Here, there is nothing in the specification describing any particular piece of hardware, any specific source code, or any particular algorithm to perform the claimed function. As such, the Federal Circuit found that the patentee has in effect claimed everything that generates purchase orders under the sun – thereby rendering the system claims indefinite.
The specification relating to the claimed means for processing provided:
Once a requisition has been inventory sourced and accepted by the CSR, it can be converted to one or more purchase orders, as represented by step 114 in FIG. 3. For example, the requisition represented by the Requisition Item Table 46 of Appendix IX, if accepted without further revision by pressing function key F6 (“ACCEPT”), would result in the generation of the following three purchase orders:
A. Line 002 would be ordered from on-site distributor-owned inventory;
B. Line 004 would be ordered from on-site customer-owned inventory (a transfer internal to the customer); and
C. Lines 001 and 003 would be ordered, respectively, from Distributor’s “DEL and “EDC” warehouses.
Of these three purchase orders, Orders A (type “01”) and C (type “03”) are shared between host computer 10 and local computer 20 (as shown in FIG. 3). Upon execution of Order A, the inventory records on both computers for Distributor-owned JIT inventory are adjusted synchronously. A purchase order is generated by host computer 10 immediately thereafter. Order B (type “06”) is executed and stored only on local computer 20. Upon execution of Order B, the inventory record on local computer 20 is adjusted (the host computer contains no records on Customer-owned JIT inventory or on items ordered by Administrative Purchases). For Administrative Purchases (type 05 items), a purchase order is printed, and mailed or faxed, locally by computer 20 as indicated at step 118 in FIG. 3, or via host computer 10 via EDI (if EDI was selected in the Header of Appendix I and an EDI transfer arrangement existed with vendor).
Such disclosures merely repeat the claimed function, describe a result thereof, and identify what happens afterwards. The specification did not describe any hardware or any algorithm for performing the claimed “processing said requisition to generate purchase orders.” Merely stating “converting to one or more purchase orders” does not disclose how the converting is done or how the “processing…to generate purchase orders” is done. Fig. 3 (shown below) is no help because it only identifies a “black box” for the step 114 referenced in the specification:
Despite the downfall of four infringed claims, ePlus had the benefit of one remaining infringed method claim that the court affirmed – claim 26. Lawson merely tried arguing that there is no substantial evidence supporting the jury’s verdict of infringement based on a claim construction issue regarding the step of “determining” (that it is the vendor that “determines” not customers). This argument did not work. ePlus still maintained its injunction against Lawson based on the infringement of this one method claim 26. Although there are some differences between the method claim 26 and system claim 1, this case reflects the importance of having different claim types, just in case some claims fail.
However, the same function for means for processing is repeated in the surviving method claim 26. There could have been potential arguments under 35 USC §112, first paragraph, attacking enablement and written description support for that same function in the method claim 26. The same reason for which the Federal Circuit found the “means for processing” to be indefinite could have supported an argument that the step of “processing the requisition to generate one or more purchase orders for the selected matching items” is not enabled and/or lacks written description support for the inventor to be in possession of such a broad scope of protection. In other words, Lawson could have argued that there is no enablement or written description support for a scope of protection that covers “everything that generates purchase orders under the sun.” Unfortunately for Lawson, such arguments were never raised at the district court (and cannot be raised for the first time on appeal).
When feasible, applicants should include different types of claims, including apparatus/system claims, method claims, and computer readable medium claims for software related inventions. Even though a means-plus-function claim element is subject to higher scrutiny for disclosure of corresponding structure (and algorithm, if it is a computer-implemented function), a properly written specification supporting a means-plus-function element creates advantages for drafting different types of apparatus/system claims – claims including means-plus-function elements, and claims that do not. The benefit is that means-plus-function elements may avoid some recent issues regarding patent eligibility issues under 35 USC §101 for software related inventions (see, e.g., the pending en banc Federal Circuit review of CLS Bank and Ultramercial).
If there is an attack on a means-plus-function claim element for indefiniteness, and there is a corresponding method claim, be sure to consider challenging the same function recited in the method claim for lack of enablement and/or lack of written description support for the unbounded scope of protection covered by the function recited.