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Claim Term “Remote Interface” Did Not Encompass Privately Owned Personal Computers

May 07, 2008

Decision icon Decision

Last Month at the Federal Circuit - June 2008

Judges: Mayer, Schall, Linn (concurring-inpart and dissenting-in-part) (per curiam)

[Appealed from: D.S.C., Judge Currie]

In, Inc. v. Federated Department Stores, Inc., Nos. 07-1277, -1278, -1308 (Fed. Cir. May 7, 2008), the Federal Circuit modified the district court’s claim construction, affirmed the district court’s SJ of noninfringement in favor of Federated Department Stores, Inc. (“Federated”), and affirmed-in-part, vacated-in-part, and remanded the district court’s SJ of noninfringement in favor of TD Ameritrade Holding Corporation (“TD Ameritrade”) and HSBC Finance Corporation (“HSBC”). applications.

The claimed system permits an applicant to apply for a financial account remotely without assistance from a person and to receive an account approval result within minutes. The system is a “closed loop” process, meaning “that all the steps involved are performed by a computer that is programmed to make the decision to approve or disapprove the request and to complete all aspects of it . . . .” Slip op. at 4.

The originally filed application for the parent of the ’007 patent described several embodiments for interfacing the loan applicant with the loan processing system, such as a telephone, a personal computer, or a kiosk housing computer equipment. These user interfaces required varying degrees of human interaction, whereby an applicant could apply with relatively little human assistance using the kiosk embodiment, as compared to the personal computer embodiment requiring substantially more human interaction.

When Decisioning filed the ’007 patent, it sought to capture a system that processed financial accounts “without human intervention.” Consequently, the specification as filed was amended to delete the embodiments that were described in the parent application as involving human assistance, leaving only the kiosk embodiment. The claims as filed were directed to a “kiosk” for providing closed loop financial transactions. During prosecution, Decisioning amended the claims to delete the “kiosk” limitation and replaced the term with the “remote interface” term that appeared in the issued claims.

Decisioning filed suit against Federated and TD Ameritrade alleging they infringed the ’007 patent. Contemporaneously, HSBC filed a DJ action against Decisioning seeking a declaration of invalidity and noninfringement of the ’007 patent. After the cases were consolidated, the district court construed the claims and granted SJ of noninfringement.

On appeal, the Federal Circuit first held that “[t]he claim term ‘remote interface’ refers to computer equipment installed in publicly-accessible locations, although it need not be enclosed in a ‘kiosk’ housing.” Id. at 21. The Court also concluded that the term “remote interface” did not encompass a consumer-owned computer.

The Court noted that the invention was not limited to a remote interface enclosed by the preferred kiosk housing because, in alternate embodiments, a different style of housing, or even no housing at all, may be used to enclose the remote interface. Also, during prosecution, the claims were modified to remove the term “kiosk,” and Decisioning explained that “[c]laim 1 has been amended to delete the kiosk element, which is not required for performing the method of the present invention.” Id. at 16 (alteration in original). The Court concluded that the effect of this amendment was to remove the requirement that the remote interface be enclosed by a kiosk housing.

The Court then considered the inventor’s alternate use of “kiosk” in reference to the entire remote interface itself. The Court noted that the common meaning of “kiosk” strongly suggested to one of ordinary skill that the claimed remote interface was installed in a publicly accessible location. Also, the specification provided that the kiosks be placed in “convenient locations,” including, e.g., an airport terminal, a bank, a shopping area, or a store, and nowhere did the specification suggest that a “kiosk” might encompass a privately owned personal computer. Further, the specification described various features not normally associated with a consumer-owned personal computer, such as a touch screen, voice recognition technology, magnetic bank card reader, security camera, or credit card port. The Court acknowledged that these features were in several dependent claims, and that these features themselves did not limit the scope of the term “remote interface.” However, the Court reasoned that these features played an important role in the invention’s stated purpose of providing closed loop processing of financial transactions without human involvement.

The Court further held that the district court erred in requiring that the remote interface be “dedicated” solely to financial transactions and “supplied by” the financial institution, since those limitations did not find support in the specification. The Court also noted that these limitations produced anomalous results. For example, a bank kiosk would be encompassed by the district court’s construction, but a kiosk provided by a third party facilitating loans for that bank would not because the kiosk is no longer “supplied by the entity providing the account.”

The Court affirmed the district court’s holding that the accused systems that were accessed solely via consumer-owned personal computers did not literally infringe the ’007 patent. Furthermore, the Court held that Decisioning was precluded from asserting that those systems infringed under the DOE, as doing so would vitiate the claim element “remote interface” as construed.

Next, the Federal Circuit reviewed the claim term “verify the applicant’s identity,” which the district court construed to mean “to confirm or substantiate the applicant’s identity. This is not limited to checking biometric information and does not exclude verification using information such as name, address, and social security number plus some additional information less likely to have been improperly obtained (e.g., mother’s maiden name, years at current address, years at job, etc).” Id. at 21. The district court further required that verification consist of information that is quantitatively and qualitatively more substantial than that based on name, address, and social security number alone.

The Federal Circuit concluded that this claim term was entitled to its plain and ordinary meaning because the claim language itself did not require that any particular type or quantity of information be used to verify the applicant’s identity. The claim required only that the account processing system “verify the applicant’s identity by comparing certain of the information received from the applicant with certain of the information received from said at least one database relevant to the applicant’s identity.” Id. at 23. The Court stated that although the specification contained sparse disclosure detailing how verification of the applicant’s identity was to occur, nowhere was the broad claim scope disclaimed. Id.

Lastly, the Court considered the claim’s recital of a data processing system adapted to “compare certain of the information received from the applicant and certain of the information received from said at least one database relevant to the applicant’s ability and willingness to comply with the account requirements to determine in real time and without human assistance if the applicant’s requested account is approved.” Id. at 24. The Court concluded that, based on the plain language of the claim, the phrase “relevant to the applicant’s ability and willingness to comply with the account requirements” modified only “certain of the information received from said at least one database” and did not modify “certain of the information received from the applicant.” Id. at 25 (emphases omitted). The Court further found its conclusion supported by the claims when read as a whole and the specification.

In a concurring-in-part and dissenting-in-part opinion, Judge Linn disagreed with the majority’s conclusion that the claimed “remote interface” could not encompass consumer-owned personal computers. Judge Linn noted that the only requirements imposed on the “remote interface” were that it be adapted to “allow an applicant to remotely request an account” and to “receive data from an applicant.” Linn op. at 3. According to Judge Linn, the majority failed to point to “words or expressions of manifest exclusion or restriction” evidencing “a clear intention to limit the claim scope,” and merely concluded that one of ordinary skill would understand “remote interface” to be limited to the fundamental characteristics of kiosks. Id. In Judge Linn’s view, the majority’s construction, limiting the broadly claimed “remote interface” to the characteristics of the disclosed “kiosk” embodiment, violated fundamental tenets of claim construction. Id. at 5.