Diebold Nixdorf, Inc. v. Int'l Trade Comm'n
Opinion
*1294
Appellants Diebold Nixdorf, Inc. and Diebold Self-Service Systems (together, "Diebold") appeal the International Trade Commission's ("ITC" or "Commission") finding that they violated § 337 of the Tariff Act of 1930 by importing components of automated teller machines ("ATMs") that infringe claims 1-3, 6, 8, and 9 of
We conclude that the term "cheque standby unit" in the '235 patent is a means-plus-function term subject to
I. BACKGROUND
A. The '235 Patent
The '235 patent describes an ATM-
i.e.
, a "cash and cheque automatic depositing apparatus"-that is capable of performing banking transactions, and more particularly is "capable of automatically depositing a bundle of cashes and cheques inserted at once." '235 patent, col. 1, ll. 6-11. It accomplishes these goals by performing several steps: (1) separating deposited bundles into individual banknotes; (2) transferring those notes horizontally through the ATM; (3) verifying the authenticity or abnormality of each note; (4) sorting and processing the notes based on how each was verified; and (5) preparing the notes for depositing into storage safes.
One component recited in each of the '235 patent's nine claims is a "cheque standby unit." The claims specify that the "cheque standby unit" is "placed in the main transfer path between the first gate and the second gate" and is "configured to hold the at least one authentic cheque to return the at least one authentic cheque to the user responsive to receiving user instructions cancelling depositing of the at least one authentic cheque."
The specification does not mention a "cheque standby unit," but instead references a "cheque temporary standby unit" in three portions of the detailed description. First, it explains that the ATM "includes a cheque temporary standby unit
120
formed on the main transfer path
106
a
provided at a rear side of the first gate
112
, for temporarily stopping a transfer of authentic cheques," as well as "an endorsement printing unit
122
followed by the cheque temporary standby unit
120
on the main transfer path
106
a
, for printing endorsement information on the authentic cheques according to printing instructions."
the cheque temporary standby unit 120 formed on a specific section of the main transfer path 106 a between the first gate 112 and the main transfer path 106 a temporarily stops a transfer of authentic cheques verified by the banknote verifying unit 110 . Before the cheques are subjected to an endorsement printing indicating that the rights relating to the cheques are transferred from customers to the bank, the cheques are held for the user as an owner to input an instruction. When a depositing instruction *1295 is inputted, the cheques are transferred to the endorsement printing unit 122 . On the contrary, when a depositing cancellation instruction is inputted, the cheques are transferred to the bundle insertion opening 102 or the abnormal banknote temporary storage 116 by a reverse driving of the main transfer unit 106 so that they can be returned to the user.
The endorsement printing unit 122 performs the endorsement printing only when the banknote verifying unit 110 verifies that the cheques are authentic and, also, when the cheque temporary standby unit 120 receives an owner's final depositing instruction.
The "cheque standby unit" limitation was added during prosecution to overcome prior art that purportedly permitted cheques to be stored in a safe, but did not disclose returning stored cheques to the user after the user canceled a deposit. J.A. 559-61, 564-65.
B. The ITC Proceedings
In February 2016, Intervenors Hyosung TNS Inc. and Nautilus Hyosung America Inc. (together, "Hyosung"), which own the '235 patent by assignment, filed a complaint with the ITC against Diebold, 1 alleging violations of § 337 by reason of Diebold's infringement of four patents related to ATMs. The Commission instituted an investigation, and three of the four patents-all but the '235 patent -were subsequently terminated from the investigation pursuant to motions by Hyosung. The accused products are Diebold's ATMs that *1296 can receive and process both cash and checks in a single, mixed bundle that is inserted at once, and a module used in these ATMs. J.A. 76-77.
The administrative law judge ("ALJ"), after holding an evidentiary hearing, issued an Initial Decision, finding not only that the accused module directly infringed claims 1-3, 6, 8, and 9 of the '235 patent and that Diebold contributorily infringed the claims by importing the module, but also that the claims of the '235 patent are not invalid. In relevant part, the ALJ concluded that the term "cheque standby unit" is not indefinite. First, he agreed with Hyosung that the term should be given its plain and ordinary meaning, concluding that a person of ordinary skill in the art "would understand that a structure in an ATM that temporarily holds checks pending the customer confirming the deposit is the cheque standby unit," and that, "[i]n general, a cheque standby unit is the escrow that temporarily holds checks." J.A. 141. He expressly credited the testimony of Hyosung's expert, Dr. Howard, stating he "described how the phrase 'a cheque standby unit' would necessarily have a structural meaning to such a person, and would refer to the physical portion of a cash-and-check depositing module that is comprised of well-known components for holding cheques in a standby configuration pending user confirmation of the deposit." J.A. 141.
The ALJ also examined the claim limitation under the assumption that "cheque standby unit" is a means-plus-function term, and determined that the '235 patent discloses the required structure of "stacking and temporary storage of media." J.A. 142. The ALJ then stated that a person of ordinary skill in the art would find corresponding structure in Figure 2's teaching of "a cheque standby unit 120 that temporarily stores at least one authentic cheque by holding it in position on the belt." J.A. 142.
The Commission, after undertaking review of the ALJ's Initial Decision on issues not involving the "cheque standby unit," issued its Final Determination finding a violation of § 337, in addition to a Limited Exclusion Order and Cease and Desist Orders. Diebold appeals. We have jurisdiction under
II. DISCUSSION
Diebold argues on appeal that "cheque standby unit" is a purely functional term that connotes no specific structure and is therefore subject to § 112, para. 6.
2
Specifically, it contends that the word "unit" is a "generic nonce word" akin to " 'mechanism,' 'element,' 'device,' and other nonce words that reflect nothing more than verbal constructs," Appellant Br. 30 (quoting
Williamson v. Citrix Online, LLC
,
*1297 The Commission and Hyosung first respond by arguing that Diebold failed to present evidence of its own to rebut the presumption that § 112, para. 6 does not apply to this term. Second, they contend that the ALJ properly determined that the term is not subject to application of this provision because both the intrinsic and extrinsic evidence-in particular, the expert testimony of Dr. Howard-demonstrate that a person of ordinary skill in the art would understand the term "cheque standby unit" to denote structure. Finally, Hyosung argues that, even if the term is subject to § 112, para. 6, the specification recites sufficient structure for performing the claimed function in Figure 2, in view of Dr. Howard's testimony.
A. Standards of Review
We review the Commission's final determinations under the standards of the Administrative Procedure Act ("APA").
See
"Regarding questions of claim construction, including whether claim language invokes
B. Section 112, Para. 6 Applies
We conclude that the term "cheque standby unit" is subject to the application of § 112, para. 6. Means-plus-function claiming occurs when a claim term is drafted in a manner that invokes § 112, para. 6, which states:
An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.
The standard by which we determine whether § 112, para. 6 applies "is whether the words of the claim are understood by persons of ordinary skill in the art to have a sufficiently definite meaning as the name for structure."
Diebold has shown that the term "cheque standby unit," as understood by one of ordinary skill in the art, both fails to recite sufficiently definite structure and recites a function without reciting sufficient structure for performing that function. Examining the evidence intrinsic to the '235 patent, we observe that the claims do not recite
any
structure, much less "sufficiently definite structure," for the "cheque standby unit." Rather, the claims describe the term "cheque standby unit" solely in relation to its function and location in the apparatus. Claim 1 specifies that the unit must be "placed in the main transfer path between the first gate and the second gate" and requires that it be "configured to hold the at least one authentic cheque to return the at least one authentic cheque to the user responsive to receiving user instructions cancelling depositing of the at least one authentic cheque." '235 patent, col. 10, ll. 50-55. None of the dependent claims add limitations that either describe particular structural features or flesh out whether the term has a particular structural meaning. And the specification similarly explains that the "cheque temporary standby unit" is "formed on the main transfer path
106
a
" and is used to "temporarily stop[ ] a transfer of authentic cheques," without making clear what, if any, structures correspond to the claim term.
Although these passages suggest that the "cheque standby unit" must have
some
structure to perform the function of holding checks and then either returning them to the user or continuing to process them pending a user instruction, the '235 patent does not offer any clues as to what such a structure might be.
3
Indeed, the written description does not include any examples of what structures or class of structures fall within the definition of a "cheque standby unit." Nor does the fact the "cheque
*1299
standby unit" must be formed on the main transfer unit between the first and second gates offer any guidance "that might inform the structural character of the limitation-in-question or otherwise impart structure" to the term as recited in the claims,
Williamson
,
Our analysis of whether § 112, para. 6 applies does not end with this observation, however, as the Commission credited Dr. Howard's expert testimony in determining that the term "cheque standby unit" connotes sufficiently definite meaning as the name for structure to persons of ordinary skill in the art. Diebold argues that, because this testimony was based purely on Dr. Howard's interpretation of the intrinsic record, we should decline to consider it and review the Commission's claim construction de novo . Diebold further argues that, even if the Commission was entitled to rely on Dr. Howard's testimony, we should nevertheless reverse because he testified that the term "cheque standby unit" fails to connote any particular structure.
The Commission and Hyosung raise two arguments in response. First, they contend that, because Diebold failed to present affirmative evidence of how a person of ordinary skill would understand the claim language, Diebold failed to rebut the presumption against the application of § 112, para. 6. Second, they submit both that the Commission was entitled to credit Dr. Howard's testimony, and that such testimony was sufficient to demonstrate that the term "cheque standby unit" had a structural meaning to persons of skill in the art at the relevant time. We reject both of the Commission and Hyosung's arguments, and conclude that the term is subject to § 112, para. 6.
First, none of our cases mandate that a party seeking to overcome the presumption against application of § 112, para. 6 can only do so by presenting extrinsic evidence that one of ordinary skill would
fail to
understand that a term connotes a definite structure. Imposing such a requirement would be inconsistent with the Supreme Court's guidance in
Teva Pharmaceuticals
, where the Court held that, even in cases in which the district court finds a need to look beyond the patent's intrinsic evidence and to consult extrinsic evidence, the district court must still conduct a legal analysis: "whether a skilled artisan would ascribe that same meaning to that term
in the context of the specific patent claim under review
."
Thus, in appropriate cases, a party advocating that a claim limitation that does not recite the word "means" is subject to § 112, para. 6 can overcome the *1300 presumption against its application solely by reference to evidence intrinsic to the patent. Diebold's failure to contradict Dr. Howard's testimony with extrinsic evidence is not fatal to its ability to overcome the presumption, as the Commission and Hyosung argue, unless we conclude that Dr. Howard's testimony was sufficient to overcome conclusions drawn from the intrinsic record. We conclude it was not.
The Commission relied on paragraphs 185, 186, and 189 of Dr. Howard's Witness Statement in determining that the term "cheque standby unit" is not a means-plus-function term. It did not cite, and Hyosung did not introduce, any other evidence, such as dictionary definitions, suggesting that "cheque standby unit" is a term commonly understood by persons of ordinary skill in the art to denote a device or class of devices.
Cf.
Greenberg
,
The Commission relied on Dr. Howard's testimony that "a person of ordinary skill in the art would readily understand that a structure in an ATM that temporarily holds checks pending the customer confirming the deposit is the cheque standby unit," and that, "[i]n general, a cheque standby unit is the escrow that temporarily holds checks." J.A. 3219 ¶ 186. It also relied on his testimony that the term "would necessarily have a structural meaning" to a person of ordinary skill in the art, who would understand the unit must be "comprised of well-known components for holding cheques in a standby configuration pending user confirmation of the deposit," and must "interface with the main transfer path." J.A. 3219-20 ¶ 189. And it credited his testimony that "[a] person of ordinary skill in the art would also understand the stacking and temporary storage of media in figure 2" of the '235 patent in a different portion of its
None of these findings demonstrate that the term "cheque standby unit" had a reasonably well understood meaning in the art at the time of the invention.
Greenberg
,
This case is therefore distinguishable from the cases on which the Commission and Hyosung rely. First, in
Inventio AG v. Thyssenkrupp Elevator Americas Corp.
,
In
Apex Inc. v. Raritan Computer, Inc.
,
Finally, in
Greenberg
, we were tasked with deciding whether the term "detent mechanism" was subject to § 112, para. 6. The district court concluded that it was, both because the term did not describe a particular structure but instead described
*1302
any structure that performed a detent function, and because both the dictionary definition of the word "detent" and the definition of "detent mechanism" offered by Dr. Greenberg's expert "were expressed in functional terms."
This case is unlike
Greenberg
, as there is no evidence-in the form of dictionary definitions or otherwise-that "cheque standby unit" was reasonably well understood by persons of ordinary skill in the art to refer to a structure or class of structures.
See
Skky
,
Instead, we find this case to be analogous to
Advanced Ground Information Systems, Inc. v. Life360, Inc.
,
C. The Specification Does Not Disclose Sufficient Structure Corresponding to the Claimed Function
Having concluded that the term "cheque standby unit" is subject to application *1303 of § 112, para. 6, we next determine whether the specification discloses sufficient structure that corresponds to the claimed function, which the parties do not dispute is "holding the at least one authentic cheque to return the at least one authentic cheque to the user responsive to receiving user instructions cancelling depositing of the at least one authentic cheque." It does not.
"Structure disclosed in the specification qualifies as 'corresponding structure' if the intrinsic evidence clearly links or associates that structure to the function recited in the claim."
Williamson
,
Although the Commission found that "[f]igure 2 of the '235 patent teaches a cheque standby unit
120
that temporarily stores at least one authentic cheque by holding it in position on the belt," J.A. 142, no structure is disclosed in the figure or written description that is capable of performing this function. Instead, all that is depicted in the figure for item
120
is a pair of vertical lines that wraps around the outside of two cylinders. These lines are indistinguishable from main transfer unit
106
a
, which both precedes and follows item
120
. The corresponding portions of the written description likewise do not describe any structure capable of "holding [cheques] in position on the belt." Nor does the written description-including the portions cited by the Commission-reference "the stacking and temporary storage of media."
Cf.
J.A. 142. Even had the specification included this phrase, it would still describe only function, not structure, and therefore would be insufficient to constitute " 'adequate' corresponding structure to achieve the claimed function."
Williamson
,
Because the '235 patent fails to disclose any structure corresponding to the function of "holding the at least one authentic cheque to return the at least one authentic cheque to the user responsive to receiving user instructions cancelling depositing of the at least one authentic cheque," we conclude that claims 1-3, 6, 8, and 9 are invalid for indefiniteness under
III. CONCLUSION
For the foregoing reasons, we reverse the Commission's finding that Diebold violated § 337.
REVERSED
COSTS
Costs to appellant.
During the pendency of the ITC proceedings, Diebold acquired the majority of shares of German ATM manufacturer Wincor Nixdorf, Inc., and was renamed Diebold Nixdorf, Inc.
Because the application leading to the '235 patent was filed prior to September 16, 2012, we apply pre-AIA § 112.
At oral argument, counsel for the Commission for the first time mentioned a patent application incorporated by reference in the '235 patent's specification, arguing that element 114 of this incorporated patent application, referred to as a "temporary standby unit," shows a structure corresponding to the "cheque standby unit." Oral Arg. at 18:14-19:33,
available at
http://oralarguments.cafc. uscourts.gov/default.aspx?fl=20 17-2553.mp3 (referencing J.A. 5585). Putting aside the question of waiver, counsel admitted that the section of the '235 patent in which this application is incorporated is directed only to the invention's tripartite sensors.
At oral argument, counsel for Hyosung argued that Dr. Howard's oral testimony that "escrow units" were "well known" demonstrates that persons of ordinary skill in the art knew the equivalent term "cheque standby unit" is a sufficiently definite name for structure. See J.A. 1631:12-20. He invited the court to "Google ATM escrow unit" to see that the term has a specific, structural meaning to persons of ordinary skill, akin to words like "brake," "lock," and "screwdriver." Oral Arg. at 26:00-26:13. Hyosung did not present any such evidence to the Commission, however, nor did the Commission find that the term "escrow unit" conveys a particular structural meaning to skilled artisans. Counsel for Hyosung also expressly declined to conclude that the scope of the term "cheque standby unit" is limited to structures falling in the purportedly well-understood group of structures known as "escrow units." Id. at 26:13-26:24. And, counsel presented no evidence or argument indicating that the "escrow units" to which he referred either existed or were well known as of the date of the application for the '235 patent. For these reasons, we do not countenance Hyosung's arguments concerning "escrow units."
As noted, during trial before the Commission, Dr. Howard testified that, in his opinion, the phrase "cheque standby unit" was broad enough to cover structures as distinct as a suction cup, a trapdoor, and a drum, without limitation.
Reference
- Full Case Name
- DIEBOLD NIXDORF, INC., Diebold Self-Service Systems, Appellants v. INTERNATIONAL TRADE COMMISSION, Appellee Hyosung TNS Inc., Nautilus Hyosung America Inc., Intervenors
- Cited By
- 33 cases
- Status
- Published