iIn his debut claim construction appearance at the U. S. Court of Appeals for the Federal Circuit, Judge Wallach (writing for a unanimous panel) focused his attention on intrinsic evidence as the primary tool for claim construction. Chicago Board Options Exchange, Inc. v. International Securities Exchange, LLC, Case Nos. 11-1267; -1298 (Fed. Cir., May 7, 2012) (Wallach, J.).
In the underlying case, International Securities Exchange (ISE) had appealed a district court summary judgment order granting non-infringement to the Chicago Board Options Exchange (CBOE). The patent-at-issue was directed to an automated exchange for the trading of financial options contracts that allocates trades among market professionals and that assures liquidity. On appeal, the Federal Circuit found error with the district court’s construction of three terms and provided its own constructions. In so doing, Judge Wallach provided a hint as to his possible modus operandi on claim construction.
The parties had agreed that the term “system memory means” was a means-plus-function limitation. Nevertheless, in a footnote, Judge Wallach sua sponte found the claim element to be means-plus-function because “the limitation articulates a function, but nowhere in the language of the limitation is there a specific and definite structure of a ‘system memory means.’” Turning to the parties’ dispute, Judge Wallach relied on the specification to find (and to dispute CBOE’s position to the contrary) that the disclosed “system memory” was corresponding structure clearly associated with the “system memory means” function.
The district court’s concluded that the claimed “matching” may be based on price only. The Federal Circuit disagreed, pointing to dependent claims “matching” could be based on “a pro rata basis” or on “an allocation formula.” The Federal Circuit also noted that specification supports a “time priority” basis for matching. The Court also relied solely on the claim language and the specification in resolving a related dispute as to whether “matching” and “allocating” were distinct. In doing so, the Court focused on the claim language and claim differentiation concepts, citing Federal Circuit precedent for the proposition that different terms presumptively convey different meanings.
The Court next concluded that the district court erred in determining that the claim term “automated exchanges” describes a “method.” The Court noting that “once again, the claims are instructive,” explained that the patent in issue contained both system and method claims. Thus, to construe the term “automated exchanges” as a method would render superfluous the method claims which themselves already explicitly recited as a method (or “process”)—a construction contrary to the Court’s claim differentiation jurisprudence. Again the Court turned the specification to bolster its position, showing that a system (and not just a method) was indeed disclosed—“[t]he specification also explains that: ‘[o]ver time, each of the existing options exchanges has developed systems to track the best quotation.’”
Practice Note: At least in this case, Judge Wallach consistently relied on intrinsic evidence alone to support claim constructions. He relied heavily on the claim language, supported by the specification, and once in a footnote, cited the file history. No apparent extrinsic evidence was relied upon.
