Thursday, February 27, 2014

Federal Circuit - v. SAP - Evidence Required to Support Indefiniteness, 35 USC 112

In v. SAP, the Federal Circuit vacated a district court's holding system claims of US Patent No. 6,947,903, owned by Elcommerce, invalid for indefiniteness under 35 USC 112, because the defendant SAP (1) misinformed the district court the Federal Circuit does not require evidence on the knowledge of the technology by persons of skill in the field; and (2) declined to provide evidence of how such persons would view the description of "structure, materials, or acts" in the specification for performance of the functions recited in means-plus-function elements.

Claim 37 is representative of all of the system claims:
  • means for extracting, at each supply chain site, the supply-related data to be monitored, wherein the data is maintained in plural formats located among the supply chain sites, at least one of the supply chain sites corresponding to an independent entity in the supply chain, being independent of another supply chain site;
  • means for translating the data to a common format;
  • means for uploading and collecting, from each supply chain site, the extracted data to a data collection site;
  • means for formatting, at the data collection site, a portion of the collected data, retrieved from at
  • least one of the supply chain sites other than the site of the user, into one of a plurality of views, responsive to criteria selected by a user associated with a supply chain site, for presentation to the user, the portion of formatted data being dependent on access rights granted to the user’s supply chain site . . . .
The '903 patent col. 15 ll. 32–48 (emphases added).

SAP argued at the Markman hearing that such "means plus-function terms in the '903 patent do not have supporting 'structure or acts' in the specification, and argued that since such support is absent, SAP could satisfy its burden on indefiniteness without expert testimony or other evidence of the existing knowledge in the field of the invention. SAP urged that Federal Circuit precedent does 'not require' such evidence."

Elcommerce in turn argued "that determination of the adequacy of the supporting structure or acts is made from the viewpoint of persons of skill in the field of the invention, and that evidence of how such persons would view the description should be presented to the court."

During the Markman hearing the district court asked for such evidence:

'THE COURT: Well, what evidence is there of what a person of ordinary skill in the art would understand the structure as defined in the patent to be, what evidence is there of that?

SAP: Your Honor, we haven’t submitted a declaration or separate evidence from somebody of ordinary skill in the art who says, I read the patent and I don’t see any structure. We’re actually not required to do that and, under the case law, the Federal Circuit’s case law, as well as other cases interpreting it, that's not a requirement. We can simply point to the absence of structure and, if it's not there, it's not there."

SAP persisted that the Federal Circuit "does 'not require' evidence of how a person of ordinary skill would understand the patent. The record shows the judge’s concern with this decisional approach to complex technology:

THE COURT: How am I to determine what one of ordinary skill in the art would think?

SAP: Well, your Honor, that’s what I’m here to do is to try to convince you that all those things Mr. Benson pointed to, it’s not structure. He’s simply pointing to phrases in the patent that repeat the function and simply repeating the function and drawing a box around it doesn’t convert it into structure."

This court's inquiry continued at the Markman hearing. "SAP presented only attorney argument concerning the structure and acts set forth in the patent, and Elcommerce stressed that SAP bears the burden of proving invalidity of duly granted claims:

ELCOMMERCE: So, when SAP comes up here, they have to show you that one of ordinary skill in the art would not understand things like the DTE or the DCS or whatever structure we point to, would not be understood by one of ordinary skill in the art to perform the particular function. And they have presented zero evidence about how one of ordinary skill in the art would view what we've shown.

THE COURT: But, how do I determine what is understood by one skilled in the art?

ELCOMMERCE: You’d probably have to get somebody up in the box, that’s the witness box, raise their right hand and testify one way or another. That’s probably, that’s the only way that I know of doing this. To come in and just have a lawyer argue it, is not enough. This is to be determined in view of one of ordinary skill in the art. They have not submitted any declarations of any experts. They haven’t submitted declarations of one of ordinary skill in the art."

The Federal Circuit concluded:

"The district court rightly was concerned about what a person of skill in the art might make of the lengthy written description and flow-charts and the multiple claimed functions. The judge repeatedly asked for evidence of what such a person would understand in this particular setting. Instead of evidence, SAP submitted only attorney argument. The district court accepted SAP’s position that no external evidence was 'required' and could be relied upon to show how a person of ordinary skill would understand the descriptive text and flowcharts and diagrams in the patent. However, the adequacy of a particular description is a case-specific conclusion, not an all-purpose rule of law. Findings as to what is known, what is understood, and what is sufficient, must be based on evidence.

Without evidence, ordinarily neither the district court nor this court can decide whether, for a specific function, the description in the specification is adequate from the viewpoint of a person of ordinary skill in the field of the invention. We do not of course hold that expert testimony will always be needed for every situation; but we do hold that there is no Federal Circuit or other prohibition on such expertise. See Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993). The district court persistently asked for evidence and was given none. Without more SAP cannot overcome the presumption of patent validity.

We conclude that the district court erred in granting summary judgment without a proper evidentiary basis for its conclusion. The burden was on SAP to prove its case, and in the absence of evidence provided by technical experts who meet the Daubert criteria there is a failure of proof. Attorney argument is not evidence. We vacate the district court’s rulings on the system claims, and remand for application of appropriate evidentiary standards and judicial procedures."

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