November 6, 2017

Federal Circuit Clarifies Difference Between Indefinite Hybrid Claims and Definite Apparatus Claims with Permissive Functional Language

Harness the Lesson:

The hybrid-claim issue arises in two situations: when an apparatus claim recites user-performed actions; and when an apparatus claim recites actions of the apparatus without tying those actions to the structural features of the apparatus.  Courts treat hybrid claims as indefinite because it is unclear whether infringement requires making the claimed apparatus and/or operating the claimed apparatus.

The Federal Circuit’s decision in Mastermine Software, Inc. v. Microsoft Corporation clarifies how to avoid the hybrid-claim issue.  By tying active language to the structural features of the apparatus, the active language may express a capability of the apparatus rather than a method of using the apparatus.  In other words, a claim limited to the structure of an apparatus and the capabilities of the apparatus may be definite.

Mastermine Software

Mastermine Software sued Microsoft for infringing claims 1, 8, and 10 of U.S. 7,945,850 and claims 1-3 of U.S. 8,429,518.  Microsoft persuaded the district court that claims 8 and 10 of the ‘850 patent and claims 1-3 of the ‘518 patent were invalid for indefiniteness.

At issue was whether Mastermine’s claims were hybrid claims covering both an apparatus and a method of using an apparatus in the same claim.  Claim 8 of Mastermine’s ‘850 patent was the representative claim:

8. A system comprising …

a reporting module installed within the CRM software application …

wherein the reporting module installed within the CRM software application displays a list of the report templates based on the selected report toolkit and receives a selection of one of the one or more report templates,

wherein the reporting … presents a set of user-selectable database fields as a function of the selected report template, receives from the user a selection of one or more of the user-selectable database fields, and generates a database query as a function of the user selected database fields ….

The district court decided that the active language in claim 8 of Mastermine’s ‘850 patent presented similar issues to the active language that caused a finding of indefiniteness in IPXL Holdings, L.L.C. v., Inc., 430 F.3d 1377 (Fed. Cir. 2005) and Rembrandt Data Techs., LP v. AOL, LLC, 641 F.3d 1331 (Fed. Cir. 2011).

Claim 25 of IPXL’s Patent

25.  The system of claim 2 [including an input means] wherein the predicted transaction information comprises both a transaction type and transaction parameters associated with that transaction type, and the user uses the input means to either change the predicted transaction information or accept the displayed transaction type and transaction parameters.

Claim 3 of Rembrandt’s Patent

3.  A data transmitting device for transmitting signals corresponding to an incoming steam of bits, comprising:

first buffer means for partitioning …

fractional encoding means for receiving …

second buffer means for combining …

trellis encoding means for trellis encoding the frames from said second buffer means; and

transmitting the trellis encoded frames.

On appeal, the Federal Circuit clarified that IPXL Holdings and Rembrandt Data Techs. did not bar active language in apparatus claims per se.  Instead, the problem in IPXL Holdings was the active language defined a user-performed action; consequently, it was unclear whether creating the claimed system or having a user perform the recited action was necessary for infringement.  The problem in Rembrandt Data Techs. was the claim failed to link the active language — transmitting — to a structure of the claimed apparatus.  As a result, it was unclear whether infringement required creating the claimed device or performing the recited action.

Because claim 8 of Mastermine’s ‘850 patent did not recite any user-performed actions or isolated active language, the Federal Circuit distinguished Mastermine’s claim from the indefinite claims in IPXL Holdings and Rembrandt Data Techs.

The Federal Circuit further added that claim 8 of Mastermine’s ‘850 patent tied the active language — presents, receives and generates — to the “reporting module” of the claimed system.  Accordingly, the active language in claim 8 of Mastermine’s ‘850 was permissive functional language, which described capabilities of the claimed apparatus, not separate method steps.