In a non-precedential but academically interesting decision, the U.S. Court of Appeals for the Federal Circuit, in the context of a business method patent (BMP), vacated and remanded a district court decision, noting that in order to infringe a claimed method, the defendant must actually practice the method, not merely possess the capability to do so. Cybersettle v. National Arbitration Forum, Case No. 07-1092 (Fed. Cir., July 24, 2007) (Bryson, J.).
The National Arbitrators Forum (NAF) is a private corporation that handles arbitration matters. Cybersettle owns a patent on a computerized dispute resolution method. According to the claimed method, disputing parties make settlement bids into a computer. If there is a close-enough match between the parties, the case is settled. A party may pre-submit multiple bids to be used in consecutive bidding rounds.
Cybersettle sued the NAF claiming that the operation of two of NAF’s online dispute resolution systems infringed certain method claims of Cybersettle’s patent. Cybersettle’s claimed method includes the steps of "receiving a plurality of demands [and] a plurality of settlement offers." On cross-motions for summary judgment, the district court construed the asserted claim as not requiring actual receipt of multiple offers and demands, but simply the capacity to receive multiple offers and demands and entered summary judgment for Cybersettle. NAF appealed.
The Federal Circuit reversed, noting that "[a] patented method is a series of steps, each of which must be performed for infringement to occur. It is not enough that a claimed step be capable of being performed." The Court emphasized, "[a] party that does not perform a claimed step does not infringe a method claim merely because it is capable of doing so."
Practice Note:
As of the time of the district court proceeding, it is reported that the accused NAF computer system had generated no revenue and Cybersettle had been granted no damages at the district court—simply an injunction. NAF nevertheless took the appeal to vindicate what it perceived to be an incorrect district court opinion that required clarity as to what the Cybersettle’s patent actually covered. Neither party raised the issue of whether business method patents, such as the one in issue here, comprise patentable subject matter under 35 U.S.C. § 101 or questioned the continuing vitality of State Street Bank, an issue the Federal Circuit is all but certain to speak to when deciding on several pending cases including In re Nuijten, In re Comiskey, In re Bilski and In re Ferguson.The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
