“Where the specification makes clear that the invention does not include a particular feature, that feature is deemed to be outside the reach of the claims of the patent, even though the language of the claims, read without reference to the specification, might be considered broad enough to encompass the feature in question.”
On May 7, 2012, in Chicago Bd. Options Exch., Inc. v. Int’l Secs. Exch., LLC (Rader, Wallach, Fogel) affirmed-in-part, reversed-in-part, vacated-in-part and remanded the district court’s summary judgment that CBOE did not infringe U.S. Patent No. 6,618,707, which related to an automated exchange for the trading of options contracts that allocates trades among market professionals and that assures liquidity. The Federal Circuit stated:
Means-plus-function limitations are governed by 35 U.S.C. § 112, ¶ 6 . . . . As such, § 112, ¶ 6 “represents a quid pro quo by permitting inventors to use a generic means expression for a claim limitation provided that the specification indicates what structure(s) constitute(s) the means.” Construction of a means-plus-function limitation involves two steps. First, the court must identify the claimed function. Second, the court must identify the corresponding structure in the specification that performs the recited function. The parties’ dispute in this case concerns only the second step.
It is well-established that the “specification must be read as a whole to determine the structure capable of performing the claimed function.” A “structure disclosed in the specification is corresponding structure only if the specification or prosecution history clearly links or associates that structure to the function recited in the claim.” “The duty of a patentee to clearly link or associate structure with the claimed function is the quid pro quo for allowing the patentee to express the claim in terms of function under section 112, paragraph 6.” Thus, “[i]f an applicant fails to set forth an adequate disclosure, the applicant has in effect failed to particularly point out and distinctly claim the invention . . . .” Whether the specification “adequately sets forth structure corresponding to the claimed function necessitates consideration of that disclosure from the viewpoint of one skilled in the art.”
In this case, system memory is the disclosed structure clearly associated with “system memory means.” . . . CBOE contends that the bid matching process and the offer matching process “store” allocation parameters because they “apply” and “contain” allocation parameters. In effect, CBOE argues that “store,” “apply” and “contain” have similar meanings. We disagree. The term “store” or a derivation thereof is associated with “system memory” or “book memory” or a “memory” every time the term is used in the specification. Nowhere is “system memory” or “book memory” associated with “apply” or “contain.” Nothing in the Patent suggests that “storing” and “applying” are used interchangeably in reference to allocating parameters. Hence, CBOE’s contention that the bid matching process and the offer matching process “store” allocating parameters fails because the Patent does not ascribe the same meaning for “apply,” “contain” and “store.” The general presumption that different terms have different meanings remains. Accordingly, we construe the function of “system memory means” to be “storing parameters of the entity administering the invention for allocating trades between the incoming order or quotation and the previously received orders and quotations.” . . . We often assume different terms convey different meanings. The ’707 Patent does not teach otherwise in this instance. Accordingly, we construe “matching” as “identifying a counter-part order or quotation for an incoming order or quotation.” We hold that “matching” is a process that is distinct from “allocating.”
Although the district court did not err in holding that the ’707 Patent disavowed all floor-based exchange systems, it did err in determining that “automated exchange” describes a “method.” The district court construed “automated exchange” to mean “a method for executing trades of financial instruments that is fully computerized, such that it does not include matching or allocating through use of open outcry.” It also construed “exchange” as “a method for executing trades of financial instruments,” and construed “automated” to mean “fully computerized, such that its protocol does not include matching or allocating through use of open-outcry in order to execute trades.” The district court further explained that “a method that effects trades of financial instruments by automatically matching and allocating but also entails ‘oral communications between market professionals at a central location in open view of other market professionals’ is not fully computerized and therefore not ‘automated.’” This construction was based largely on the district court’s holding that the ’707 Patent disavowed traditional floor-based trading.
We have recognized that “[w]here the specification makes clear that the invention does not include a particular feature, that feature is deemed to be outside the reach of the claims of the patent, even though the language of the claims, read without reference to the specification, might be considered broad enough to encompass the feature in question.” Here, we agree with the district court and find that the ’707 Patent disavows traditional floor-based trading.
The Patent describes a system of trading options contracts in these floor-based environments as an “open-outcry” system because trading takes place through oral communications between market professionals at a central location in open view of other market professionals. The Patent characterizes the open-outcry system as “antiquated,” but it explains that because of efforts to preserve the traditional system, the transition to and use of computer-based technology on options exchanges has been slow. While floor-based exchanges employ some level of automation in the execution and allocation of orders, the specification recites that such exchanges have “inherent inadequacies” and “deficiencies [that] make it difficult to assess market depth and liquidity [which] ultimately impact the quality of the prices customers receive for their order.” The Patent further discloses that the disjointed nature of the various manual, and occasionally automated, systems used in floor-based exchanges cultivate these deficiencies, and again, make it difficult to assess the true market depth and liquidity ultimately impacting the quality of prices. The Patent suggests that the increasing volume of trades-in-options contracts, as well as the speed at which price information of underlying stocks is transmitted to consumers, have increased the demand for faster execution of trades. The Patent proposes an automated exchange for the express purpose of remedying these perceived deficiencies.
The ’707 Patent thus disavows the traditional open-outcry or floor-based trading systems. There is no other way to interpret the listing in the specification of the many reasons why manual and partially automated exchanges cannot sustain the growing demands of the market. Indeed, the specification goes well beyond expressing the patentee’s preference for a fully automated exchange over a manual or a partially automated one, and its repeated derogatory statements about the latter reasonably may be viewed as a disavowal of that subject matter from the scope of the Patent’s claims. . . . In this instance, proper claim construction may not vary from the Patent’s own description of “automated exchange” as being a system. Accordingly, while we affirm the district court’s determination that the “automated exchange” disavowed the open-outcry system, we cannot adopt the district court’s construction of “automated exchange” as a “method.” Instead, we construe “automated exchange” to mean “a system for executing trades of financial instruments that is fully computerized, such that it does not include matching or allocating through the use of open-outcry.”
