Claiming Active Systems but Distinguishing IPXL

MasterMine v. Microsoft (Fed. Cir. 2017)

On appeal here, the Federal Circuit has reversed a lower court indefiniteness finding — holding that the claims were not improperly simultaneously directed to both an apparatus and a method of using the apparatus.  In my view, the decision here continues the Federal Circuit’s implicit rejection of the Supreme Court’s Nautilus decision.

I have reproduced a substantial portion of disputed claim 8 of U.S. Patent No. 7,945,850 below.  You’ll note the claim is directed to a “system” but then includes a number of limitations that appear to require action. Notably, at points the claim uses standard “adapted to” language (“reporting module … is adapted to … examine a schema”) but elsewhere seemingly requires actual actions (“wherein the reporting module … displays a list of the report … presents a set of user-selectable database fields …  receives from the user a selection … and generates a database query”).

In IPXL, the Federal Circuit rejected a similar claim – finding it indefinite under 35 U.S.C. 112 since it was  “unclear whether infringement . . . occurs when one creates a[n infringing] system, or whether infringement occurs when the user actually uses [the system in an infringing manner].”   The claim in IPXL likewise was directed to a “system” with certain input means, but then required that “the user uses the input means” to accomplish some result.

The district court relied upon IPXL in holding MasterMine claim was directed to an apparatus, but required a series of steps to be performed — and, as a result was indefinite.

On appeal, the Federal Circuit rejected the district court’s indefiniteness analysis – holding instead that “these claims are simply apparatus claims with proper functional language.”  In distinguishing IPXL, the court writes:

Though claim 8 includes active verbs—presents, receives, and generates—these verbs represent permissible functional language used to describe capabilities of the “reporting module.” . . . These claims are also distinguishable from those at issue in IPXL Holdings and Katz, as the claims here do not claim activities performed by the user.

In reaching the decision here, the court cited three additional post-IPXL decisions with similar results: MEC, HTC, and UltimatePointer. As here, the court found in those decisions that the recited verb-forms should be read as capability limitations rather than requirements for action.

Although the Supreme Court did not particularly address the mixed-claim-type issue in Nautilus (2014)(a post-IPXL decision) the court lowered the standard for invalidating a claim on indefiniteness grounds.  Prior to Nautilus, claims would only be invalidated if the the claim scope was “insolubly ambiguous”; now, claims are invalid if they fail to define the scope of the invention with reasonable certainty.” Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, 2129 (2014).  A major failing of the decision here (as well as the prior UltimatePointer decision) is to review the issue in light of Nautilus.

Disputed Claim 8:

8. A system comprising:

a database adapted to store customer relationship management (CRM) records containing CRM data;

a programmable processor adapted to execute a CRM software application and a spreadsheet software application;

a reporting module installed within the CRM software application …

wherein the reporting module … is adapted to … examine a schema …

wherein the reporting module … displays a list of the report …

wherein the reporting module … presents a set of user-selectable database fields …  receives from the user a selection … and generates a database query …

wherein the reporting module invokes the spreadsheet software …

wherein, in response, the spreadsheet software application generates the pivot table …

Note — the federal circuit also affirmed a narrow claim construction.  On remand, the district court will need to determine whether the newly validated claims are infringed.

16 thoughts on “Claiming Active Systems but Distinguishing IPXL

  1. Well Dennis, at least this decision does cite the controlling authority of the Supreme Court Nautilus decision and its controlling test. That is a considerable improvement over some of Judge Newman’s 103 opinions or dissents in which she has the lower-court-chutzpah to not even cite or mention the controlling 103 authority of the Supreme Court KSR decision.

  2. In at least a few cases (UltimatePointer, Mastermine), the Court has somehow decided that IPXL indefiniteness requires user action. But the IPXL decision was not about whether the claim requires user action or not, it was about reciting active steps within a system claim.

    Anyway, going with the court decision, what does it even mean for a module to be “capable of displaying a list”??

    1. what does it even mean for a module to be “capable of displaying a list”??

      That’s a very specific fake structure. Totally different fake structure from the fake structure of a module capable of displaying symbols in a circle.

      And remember: this is customer relationship management data which is truly one of the most difficult types of data for computers to handle. Millions of computers were destroyed trying to get just one of them to store CRM data. Even today, if you attempt to categorize your sound files as CRM data, you risk losing your entire Beatles collection. It’s a huge area of endeavor in the logic arts. Nobel Prize stuff.

  3. “…the Federal Circuit’s implicit rejection of the Supreme Court’s Nautilus decision.”

    I disagree that it’s a “rejection” of it or the like. Rather, I think it’s just a very limited interpretation, that is defensible, as I think the Supreme Court did intend to leave the Federal Circuit with pretty wide latitude to determine what “reasonable clarity” means in various contexts.

    The Supreme Court really did not like the previous standard (“insolubly ambiguous”), and understandably so as it was practically an admission that we need not even try to be clear. But that doesn’t mean the pendulum has to swing to the other extreme. After all, MANY areas of law put the citizenry in far more ominous situations of not really being able to know what’s expected of them due to lack of clarity. Why should patent law be the only area where there’s no room for doubt?

    1. “MANY areas of law put the citizenry in far more ominous situations of not really being able to know what’s expected of them due to lack of clarity”

      Hi. Thought about this for a moment and am having trouble coming up with examples, and wonder which areas you were thinking of?

      1. MM, maybe Ken is suddenly thinking of “foreign agents” law?

        Or, for shear case law volume, try “negligence.”

  4. The panel’s attempt to make sense of its lengthy list of incoherent and conflicting decisions on the issue is incredibly weak, to say the least. But as long as the end result is that the logic arts can rely on the recitation of a “module” that is “capable” of performing some logic function upon receipt of information then it’s all good. We won’t see any dissents in the decisions complaining about “uncertainty” or “ambiguity” or the complete lack of any workable, predictable standard in this area. And the usual complainers won’t bother to complain about that until, inevitably, a different panel tanks a claim that is indistinguishable from this pile of junk.

    Funny how that works.

    The “invention” here (trying not to laugh) appears to be the use of a pivot table in the context of custom relationship management records which — as everybody knows — are the most complex and mysterious types of records known to mankind. Nobody can predict how those records will behave, unlike all other kinds of data. So the idea of using a pivot table, well, let’s just face it: this is something an eleven year old could not have dreamed up. You’d have to be, like, 14 or 15 at least to come up with this. I can only imagine the excitement in the MasterMine research lab when they tested this incredible solution and found that, indeed, CRM record data could be put into a pivot table.

    This passage from the specification is bizarre:

    MasterMine’s arguments in support of its contrary claim construction are not compelling. MasterMine first argues that the specification contains excerpts of computer code that would generate a pivot table with an empty
    data display area. This code, however, does not support MasterMine’s construction on its face. As both parties conceded at the claim construction hearing, the code provided in the specification is not operable on its own. Indeed, MasterMine emphasized that it “never suggested that this code is a standalone application; it isn’t. This code is part of an application.” Accordingly, it is unclear what exactly would be created once this sample code was included within the entirety of code sufficient to execute the application.

    Here’s the deal: if the only support in your spec for a pivot table with an “empty data display area” (<-LOL this was an attempt to get around the prior art, fyi) is some code, then there's two possibilities. Your claim recites the code or your claim isn't enabled. That's where this extortion effort should have been shut down.

    1. I found the construction the Court agreed on (and CAFC confirmed) to be stupid beyond belief. Anyone with any experience regarding Pivot tables knows that just because the Pivot table displays no data for the parameters selected in the query doesn’t mean the Pivot table doesn’t exist. I run into this frequently…especially if the parameters chosen are not selected with proper care by the user.

      As far as the “invention” of automatically generating & organizing the data in a Pivot Table (using the specific parameters of the query) rather than the standard “excel-like’ worksheet with column headers which Microsoft’s SQL Studio program does….I can certainly see that it was an advancement at one time. (Whether this patent in dispute is an advancement over the prior art introduced in the case (which might render it obvious), I don’t know since I didn’t delve into the cited art. I was more interested in reading Newman’s dissent in the Merck v Hospira case.)

    2. Should have gone out on a 12(b)6. It’s totally abstract. It’s a totally generic implementation of Excel that excel’s designers not only foresaw, but made accommodations for. It should have gone out on a 103 common sense SJ.

      In my scheme, utterly abstract because the reports are for human consumption, not even eligible to start down the track of a 103 or a proper 112 finding.

    3. Yeah, Dennis, the Federal Circuit has surprisingly treated Nautilus as a nonevent in the indefiniteness analysis. It’s shocking in many ways. When you look at cases like KSR, Alice, Festo, and many others, they had a more profound impact on the outcome of decisions by the Federal Circuit and the lower courts; they changed the underlying DNA behind the legal issue and altered the course of countless cases.

      But not so with Nautilus. The “reasonable certainty” standard should have been a sea change, as it’s about as far away from “insolubly ambiguous” as one could reasonably get. We should be seeing poorly drafted patents with ambiguous coined terms being invalidated left-and-right.

      But it’s not happening. Federal Circuit at best cites Nautilus in passing, but then goes on to apply a stealth version of its defunct “insolubly ambiguous” standard. They still adopt the pre-Nautilus analysis that, “if we can come up with some resolution to a difficult claim construction dispute, the claim is not indefinite,” even though the difficulty of the question should be pretty strong evidence that the claim wasn’t drafted with the clarity the law now requires. The whole point of Nautilus is that if the construction of the patent is really a toss up until claim construction, that’s the kind of patent that’s failed to inform the public with reasonable certainty of its scope.

      But the CAFC is not alone in this; patent practitioners on both the enforcement and defense sides still view indefiniteness this way, as do lower courts. Maybe it’s just a question of old habits being too hard to break. The way things stand now, both from the Federal Circuit and the lower courts, in practice, you really won’t get an indefiniteness finding without basically showing that the claim meets the old insolubly ambiguous standard.

      But Dennis, I don’t fault the CAFC for not using Nautilus in the context of mixed apparatus-and-method claims based in IPXL. The truth of the matter is that mixed subject matter claims should never have been invalidated under the rubric of indefiniteness; they should have been taken out as not falling within the categories of patent-eligible subject matter under 101.

      1. Lode_Runner, the cynicism of the Federal Circuit on this point was somewhat confirmed with it held, on remand, that the claim in Nautilus were not “indefinite” despite the specification never even describing that the signals from each had were unbalanced wrt to the “unwanted” signal. This was a powerful signal to the entire community.

      2. Lode_Runner: “he truth of the matter is that mixed subject matter claims should never have been invalidated under the rubric of indefiniteness; they should have been taken out as not falling within the categories of patent-eligible subject matter under 101.”

        Let us clarify, all of 101 originally was “manufacture” under the statute of monopolies. A machine or composition of matter is a manufacture just as much as an article of manufacture. Processes that made things or improved machines were deemed to be manufactures under English case law.

        Also consider Diehr where the Supreme Court held the inclusion of ineligible subject matter in a claim eligible subject matter did not make the claims invalid under 101. They may make them indefinite for failing to particularly point out and distinctly claim the invention in some cases, but they do not violate 101. Thus a claim that both includes apparatus and includes steps is, overall, directed to patentable subject matter, it is just confusing as to what is one must do to infringe.

        1. Let us clarify, all of 101 originally was “manufacture” under the statute of monopolies.

          You REALLY need to understand what Congress did in 1952.

          Think Ned, think – this is NOT new (to you).

      3. “The whole point of Nautilus is that if the construction of the patent is really a toss up until claim construction, that’s the kind of patent that’s failed to inform the public with reasonable certainty of its scope.”

        It depends on what kind of toss-up. If there’s only a relatively narrow range of wiggle room, it’s still probably OK under “reasonable certainty.”

        Remember, the Supreme Court actually said that this new articulation of the test might not in practice change outcomes very much. They seemed more concerned about how the test is articulated.

        1. Yes, and was not the Supreme Court in Nautilus also concerned about who made claim ambiguity determinations – D.C. vs. Fed. Cir. ?

  5. customer relationship management (CRM) records containing CRM data;

    There’s one of the glaring ineligibility hooks right there.

    What a pile of g@ rbage.

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