December 9, 2009

Federal Circuit Remands for Determination of Graham Factors

Source Search Techs, LLC v. LendingTree, LLC, 2008-1505, -1524 (Fed. Cir. Dec. 7, 2009).

District Court did not abuse discretion to allow late-added prior art when plaintiff waited nine months to object and had ample time for full discovery on the late-added prior art.

No summary judgment for obviousness when issues remain about whether differences between the invention and the prior art would have been obvious to one of ordinary skill in the art at the time of invention.

No estoppel for defendant’s characterization of method step based on prior litigation’s application of a different term in a different patent to the method step.

The asserted claim was for a method of purchasing goods or services over a data network in which sellers were filtered by specifying conditions and a maximum number for a set of sellers from which to request a quotation.  “Goods or services” was interpreted as “standardized articles of trade and performances of work for another.” “Request for quotation” was interpreted as “a request for the price and other terms of a particular transaction in sufficient detail to constitute an offer capable of acceptance.”  The asserted prior art was for both “e-commerce” and “bricks and mortar” systems, the latter offered by LendingTree in supplemental invalidity expert reports.  The district court declined to bar LendingTree from using the late-added “bricks and mortar” prior art.  This decision was affirmed, as there was no “miscarriage of justice” under circuit law when Source Search Technologies had ample time to conduct full discovery on the “bricks and mortar” prior art.

The evidence of the combined prior art was insufficient, however, to support summary judgment of obviousness because  the e-commerce prior art systems did not return a “quote” as that term was construed (an offer capable of acceptance), while the “bricks and mortar” prior art systems were not for “standardized” goods and services. There remained a question of if the person of ordinary skill in the art would have recognized the filtering problem at the time of invention in 1996 or considered its solution obvious.  Thus issues remained of material fact regarding the understanding of a person of ordinary skill in the art, the differences between the invention and the prior art, and what was in the prior art.

Summary judgment for infringement was also reversed, as there was conflicting evidence on whether the loan offer returned on the LendingTree website is binding on the lender, although the district court was correct that the loans are “standard” financial services.   As an initial matter, the Federal Circuit upheld the district court’s decision that LendingTree was not estopped from denying its website provides “quotes” by an earlier judgment involving the term “bid” in a different patent; the issues were not identical—different term, different construction, different patent.

This case can be found online here.