Tuesday, October 03, 2006

Inconsistent Claim Construction on Infringement and Invalidity = Remand

SRAM Corp. v. AD-II Engineering, Inc. (05-1365) - October 2, 2006

SRAM sued AD-II over US Patent 4,900,291, which discloses shift actuators having built-in overshift capability and a mechanism that assures "precise" downshifting in bicycles. During litigation, the court first heard arguments regarding infringement, and found that AD-II infringed the '291 patent as a matter of law. In finding infringement, the court relied on a claim construction from a companion case involving the same patent, which was further construed by the Federal Circuit on appeal, ruling that the ordinary meaning applied to the claim terms.

Next, the district court heard arguments regarding invalidity. AD-II asserted that the patent was invalid in light of anticipatory prior art and the earlier claim construction. This time, the district court issued an order construing the claim as describing a method of "precision indexed downshifting," which maintained the claims as valid over the prior art.

In its appeal, AD-II argued that the district court was improperly having it both ways, by interpreting claims one way for infringment, and another way to preserve validity. The Federal Circuit agreed, finding that the term "indexing" could not even be found in the disputed claim. Interestingly, the court traced the claim-construction problems back to the USPTO, where the patent-in-suit experienced the standard examination process and three reexamination proceedings:

SRAM also urges that we adopt the district court’s construction of claim 16 as providing for "precision indexed downshifting" on the ground that, after three reexamination proceedings, the Patent Examiner—like the district court—construed claim 16 as providing "precision indexed downshifting" as a means to take up lost motion, and confirmed its patentability over prior art gear-shifting devices that require a user to manually overshift. This argument is not persuasive. While the Patent and Trademark Office (the "PTO") generally gives claims their broadest reasonable interpretation consistent with the specification, . . . paradoxically in this case, the PTO construed the claim narrowly, rather than broadly, by reading in the same limitation as did the district court. In doing so, the PTO erred for the same reasons as did the district court. The Patent Examiner’s actions thus provide no support for SRAM’s argument. Furthermore, this court is not bound by the PTO’s claim interpretation because we review claim construction de novo . . .
Apparently, SRAM did not relish the prospects of defending against invalidity on this construction, and urged the Federal Circuit to uphold the lower court's decision. The court respectfully declined, noting that, in claim construction, broader is not always better:
By failing to recite any indexing, claim 16 fails to claim the positive indexing feature and recites nothing more than a broad method that applies both to indexed shifters and to non-index shifters alike. While SRAM strongly urges the court to interpret the claim to encompass the innovative precision indexing shifting feature it contends it has invented, we are powerless to rewrite the claims and must construe the language of the claim at issue based on the words used.
VACATED AND REMANDED

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