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Imprecise Claim Construction Is Sufficient to Address Infringement Issue

April 03, 2002

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Last Month at the Federal Circuit - May 2002

Judges: Lourie (author), Mayer, and Dyk

In Pickholtz v. Rainbow Technologies, Inc., No. 01- 1173 (Fed. Cir. Apr. 3, 2002), the Federal Circuit reversed a district court’s grant of SJ of noninfringement based on an erroneous claim construction and remanded for reconsideration the issue of infringement under the proper claim construction.

Andrew Pickholtz is the inventor and owner of U.S. Patent No. 4,593,353 (“the ‘353 patent”), which claims a system for preventing piracy of computer software using authorization codes.

Pickholtz sued Rainbow Technologies, Inc. (“Rainbow”), alleging infringement of the ‘353 patent by Rainbow’s manufacture and sale of computer dongles, small devices externally connected to a computer port. In operation, a driver program detects the presence of the Rainbow dongle and exchanges encrypted information with it, preventing execution of protected software unless the dongle is attached. Pickholtz alleged that a computer with a Rainbow dongle attached and with its driver program executing, infringes claim 1 of the ‘353 patent. The critical issue on appeal was the claim construction of the term “computer” and the phrase “located in the computer.”

Supported by technical literature and expert testimony, Pickholtz proposed a broad construction of “computer” as “one or more processing units and the memory, peripherals and other devices connected electronically to and communicating with the processing units.” Rainbow proposed a narrower definition: a central processing unit (“CPU”) and main memory, without peripherals.

The district court had adopted Rainbow’s construction, citing support from the intrinsic evidence. Specifically, when describing Figure 1, the ‘353 patent uses the phrase “computer system” to describe a CPU, main memory, a pseudorandom-number (“PRN”) generator, and a peripheral disc, whereas claim 1 simply uses the term “computer.” From that distinction, the court had concluded that the term “computer” must mean something other than the phrase “computer system.” Moreover, the district court had reasoned that the claim limitation “located in the computer” would be superfluous if the term “computer” were construed as broadly as Pickholtz proposed. As a consequence of its construction of the term “computer,” the court had construed the phrase “located in the computer” to mean “in the CPU, main memory or on the circuit board, but excluding connected peripherals,” and consequently determined on SJ that Rainbow’s dongles, being peripherals, do not infringe claim 1 of the ‘353 patent.

On appeal, Pickholtz argued that “computer system” and “computer” were used synonymously in the patent and should not exclude connected peripherals.

The Federal Circuit agreed that “computer” and “computer system” were used synonymously in the ‘353 patent, but disagreed that either phrase includes all peripherals. Rather, the Court observed that the ‘353 patent specification includes one peripheral, a disc “reading means” as part of the “computer system,” and concluded that the synonymous claim term “computer” must therefore include at least some peripherals. However, the Court cautioned that the term “computer” cannot be so unbounded as to include all devices connected in any way to a CPU, or else the phrase “located in the computer,” and particularly the word “in,” would become meaningless. The Court concluded that it could not precisely define which peripherals may be part of the “computer” but found that unnecessary since the accused device is such a peripheral because it undisputedly connects substantially directly to the CPU board and is in close proximity to the CPU. Accordingly, the Court reversed the district court’s SJ grant of noninfringement and remanded for reconsideration under the revised claim construction.