Elcommerce.com, Inc. v. SAP AG and SAP America, Inc.

Docket No. 2011-1369

February 24, 2014

Brief Summary: Transfer from ED TX to PA affirmed as proper. Claim construction for certain claim terms affirmed as consistent with specification and prosecution history; others vacated due to lack of evidence as to what the ordinary skilled artisan would understand about the supporting structure (means-plus-function claims).

Summary: Elcommerce.com appealed transfer of infringement case from ED TX to the ED PA, as requested by SAP and the DC’s construction of several claim terms. The FC affirmed the DC decision regarding transfer to PA because “in the first-filed Texas case there was personal jurisdiction over both the plaintiff elcommerce and the defendant SAP, and elcommerce as plaintiff was subject to the declaratory counterclaims filed by SAP in Texas” and “[t]his jurisdiction was preserved when the entire action was transferred to Pennsylvania” (citing In re Genentech, FC 2009 (“no requirement [for] jurisdiction over the plaintiff or that there be sufficient minimum contacts…[as long as] the transferee court [has] jurisdiction over the defendants in the transferred complaint.”)) With respect to the disputed method claims, Elcommerce appealed the construction of the terms “independent supply chain sites” as well as “monitoring”, “scanning” and “detecting” at “each independent supply chain site”. Construction of “independent supply chain sites” was affirmed as consistent with the specification and the prosecution history (Elcommerce distinguished the claims from prior art during reexamination) (citing Renishaw PLC, FC 1998). The FC affirmed the DC conclusion regarding “monitoring” etc., as consistent with “[t]he Summary of the Invention, which addresses the patent as a whole” (“The present invention eliminates much of the confusion which results from redesigning one or more complex legacy systems. Instead, legacy systems are left intact, and a data transfer engine (‘DTE’) is installed at each site. The DTE monitors the local system continuously, and takes whatever information is available.”) Certain “system” means-plus-function claims (“means for monitoring changed supply-related data”, “means for extracting…the supply-related data”, etc.) were also found invalid under § 112, ¶ 6 as inadequately supported by structure in the specification. SAP successfully argued to the DC that “Federal Circuit precedent does ‘not require’ evidence of how a person of ordinary skill would understand the patent” and “presented only attorney argument” (“Attorney argument is not evidence.”) Thus, the “‘viewpoint of one skilled in the art’…was withheld from the district court”; it therefore had no “proper evidentiary basis for its conclusion” (citing Centricut, FC 2004 and Finisar, FC 2008). The DC decision regarding the system claims was therefore vacated and remanded “for application of appropriate evidentiary standards”. Judge Wallach’s dissent argued that SAP should not be required to produce any evidence as “no algorithm is disclosed” by the specification as required for cases relating to a “special-purpose computer” (citing Noah, FC 2012) (FN5 of the opinion counters that while “[t]he usage ‘algorithm’ has indeed become patent jargon, but it does not convert the established description requirements into the need for mathematical equations or software programs.”)

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