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September 08, 2022 - Last Week in the Federal Circuit

Last Week In The Federal Circuit (August 29 – September 2): Capability Claims in the Modern Era

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Have you ever wondered what it means when your smartphone or tablet connects to an “LTE” network? Our case of the week dives into that technology—and offers an interesting discussion of functional claim limitations and standard-essential patents.

Case of the week: INVT SPE LLC v. ITC, No. 20-1903

Panel: Judges Newman, Taranto, and Chen, with Judge Chen writing the opinion

You should read this case if: you have a matter involving an allegedly standard-essential patent or a dispute about whether a claim requires capability or actual operation

INVT owns a patent on a wireless communication system that uses certain coding parameters to improve the quality and speed of data transmission. Broadly speaking, a user device selects coding parameters and transmits them to a base station; the base station transmits a signal to the user device that has been encoded using the parameters chosen by the user device; and the user device decodes the signal using those parameters.

INVT brought a complaint at the International Trade Commission against manufacturers of mobile devices that use the LTE (short for “Long-Term Evolution”) wireless communication standard. INVT alleged that the accused devices infringe its patent because the asserted claims are standard-essential, i.e., necessary to practice the LTE standard.

The ITC’s administrative law judge found non-infringement based on INVT’s failure to prove that the claims were essential to the LTE standard. In the LTE standard, the user device chooses from only 16 possible parameter combinations, while the base station can select from nearly 3,000 potential combinations. The ALJ found that INVT had presented no evidence that the base station necessarily chooses the same parameters as the user device in systems operating under the LTE standard. The ALJ rejected INVT’s argument that the claims required only that the user device “has the capability to receive data” encoded using the user device’s selected parameters. Based on the claim language—a component “that receives a signal” containing certain data—the ALJ construed the claims as drawn to how an accused device actually operates, not just its capabilities.

The Federal Circuit disagreed with the agency’s claim construction but affirmed the ultimate non-infringement finding. The Court surveyed its prior cases distinguishing between two types of apparatus claims: those that “require an infringing device to actually perform and operate according to” the recited function, on one hand, and those where the accused device need only be “capable of operating” in a way that meets the claimed function. Which side of the line a given claim falls on “depends on the claim language.” But the Court stressed that claims need not “adhere to a specific grammatical form” (such as “for performing”) to be drawn to capability.

In particular, the Court noted, “computer and software claims typically use functional language to define the invention.” After all, “the recited operative steps” are what differentiates the claimed invention from generic, general-purpose computer hardware. The Court thus has “frequently construed such functional language as not requiring actual performance of those operative steps for infringement purposes.” Consistent with that principle, the Court held that INVT’s asserted claims were directed to capability rather than actual operation—even though they used the present-tense “that receives” rather than language such as “for receiving.”

Nonetheless, the Court went on to conclude that INVT had “not shown infringement, even though the claims are drawn to capability.” A device infringes capability-type claims if it is “reasonably capable of performing the claimed functions without significant alterations.” But in “contexts involving software functionality,” the Court stressed, “proof of reasonable capability of performing claimed functions” generally requires “proof that an accused product—when put into operation—in fact executes all of the claimed functions at least some of the time or at least once in the claim-required environment.”

Under that test, INVT’s standard-essential infringement theory failed. The Court noted that INVT had produced no evidence that under the LTE standard, “the base station in fact ever sends the user device a data signal that is modulated and encoded using parameters that the user device decided.” For instance, there was no evidence that the base station’s algorithm for choosing a coding parameter could result in the same parameter that the user device had selected. Thus, INVT failed to prove that LTE-compliant devices necessarily have the claimed capability.

For similar reasons, the Court held that INVT had not proven infringement under a standard analysis comparing the claims to the accused products. Although the claims themselves recited only the user device, the Court explained, infringement also depended on the base station’s operation. In particular, infringement turned on whether the base station ever sends a signal encoded using the parameters originally chosen by the user device. But INVT’s expert had not even reviewed the “source code governing the operation of the base station’s communication with an accused device.”

Finally, the Court observed that the Chenery principle did not preclude it from affirming the agency’s decision despite adopting a different claim construction. Under that administrative-law doctrine, courts generally can only uphold an agency’s decision based on the rationale that the agency actually provided. But the Court explained that the ALJ’s factual findings about the base station’s operation established non-infringement as a matter of law even under the correct claim construction. The Court’s decision thus did not “improperly remove [any] discretionary judgment from the agency to the court.”


Precedential opinions: 3

Non-precedential opinions: 2

Rule 36: 0

Longest pending case from argument: INVT SPE LLC v. ITC, No. 20-1903 (303 days)

Shortest (non-Rule 36) pending case from argument: Nike, Inc. v. Adidas AG, No. 21-1903 (31 days)