Doctrine Of Equivalents Cannot Be Used To Extend Patent Claims To Cover Software Where Claims Require A Physical Component
On August 3, 2020, Judge Alan Albright of the United States District Court for the Western District of Texas granted defendants’ motion for judgment on the pleadings that plaintiff was barred from asserting infringement by defendants’ smartphone applications. Lighthouse Consulting Group, LLC v. BB&T Corp., No. 6-19-CV-00594-ADA.
Plaintiff claimed infringement of two asserted patents directed to systems for remote depositing negotiable financial instruments, e.g., personal checks. In particular, plaintiff claimed that the remote check deposit features available in defendants’ smartphone banking applications infringed certain claims of plaintiff’s ’274 patent and ’940 patent under the doctrine of equivalents, a doctrine intended to protect patent holders against efforts by copyists to evade liability for infringement by making only insubstantial changes to a patented invention.
Defendants first argued that plaintiff was barred, by prosecution history estoppel, from using the doctrine of equivalents to establish that the accused smartphone banking applications practiced the claim element of a “carrier” for receiving checks and designed to permit generation of a front and back image of the checks.
As explained by Judge Albright, prosecution history estoppel, which limits the scope of the doctrine of equivalents, can occur in two ways: either (1) by making a narrowing amendment to the claim (“amendment-based estoppel”) or (2) by surrendering claim scope through argument to the patent examiner (“argument-based estoppel”). Concerning amendment-based prosecution history estoppel, a patentee’s decision to narrow his claims through amendment is presumed, as set forth by the Supreme Court in Festo, to be a general disclaimer of the territory between the original claim and the amended claim.
During the prosecution of the patent application for the ’274 patent, and in response to multiple rejections by the patent office examiner, plaintiff amended its claims to require an identifier “on a front side and back side of the carrier.” Defendants argued that under the Festo presumption, this narrowing amendment is a surrender of all equivalents that do not include an identifier on a front and back side of a “carrier.”
Plaintiff claimed that the Festo presumption did not apply, because defendants’ mobile banking applications are “after-arising technology,” a permitted exception under Festo, that were unforeseeable by plaintiffs at the time of application. Judge Albright noted, however, that it is the date of the amendment, not the application filing date, that defines the timeframe for determining the foreseeability of an equivalent. Consequently, Judge Albright dismissed plaintiff’s claims for infringement of the ’274 patent, because plaintiff admitted that the accused mobile applications were introduced prior to plaintiff’s amendment.
Defendants also argued that holding their mobile banking applications as equivalent to the “carrier” claim element in the asserted ’940 patent would vitiate other elements in those claims, because those other elements require the “carrier” to be a physical object rather than a non-physical object such as software: namely the elements stating that “negotiable instruments are secured to the carrier,” the elements specifying “a carrier having an identifier on a front and back side of the carrier,” and the element referring to the “surface area” of the “carrier.”
Judge Albright agreed that the language of the asserted claims required the “carrier” to be a physical object. He then explained that to determine whether finding infringement under the doctrine of equivalents would vitiate a claim limitation, courts consider the totality of the circumstances, evaluating whether the alleged equivalent can be fairly characterized as an insubstantial change from the claimed subject matter without rendering the pertinent limitation meaningless.
Under this framework, Judge Albright concluded that no jury could reasonably find that the accused non-physical software applications could be equivalent to the physical “carrier” element, and that finding otherwise would render several limitations (e.g., “secured,” “front,” “back,” “side,” “surface area,” “seal,” “transparent,” and “pockets”)—which only make sense with a physical carrier—to be meaningless. Accordingly, Judge Albright dismissed plaintiff’s claims for infringement of the ’940 patent.