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Judges: Rader, Wallach (author), Fogel
(district judge sitting by designation)
[Appealed from N.D. Ill.,
Judge Lefkow]
In Chicago Board Options Exchange, Inc. v. International
Securities Exchange, LLC, Nos. 11-1267,
-1298 (Fed. Cir. May 7, 2012), the Federal Circuit vacated the
district court's judgment of noninfringement and remanded
for further proceedings based on its interpretation of the claim
terms "system memory means," "matching," and
"automated exchange."
International Securities Exchange, LLC ("ISE") is the
owner of U.S. Patent No. 6,618,707 ("the '707
patent"), directed to an automated exchange for the trading of
options contracts that allocates trades among market professionals
and that assures liquidity. The '707 patent
distinguishes an "automated" exchange from the
traditional, floor-based "open-outcry" system for trading
options contracts.
ISE sued Chicago Board Options Exchange, Inc. ("CBOE")
for infringement of the '707 patent in the Southern
District of New York. Subsequently, CBOE sued ISE in the
Northern District of Illinois seeking, among other relief, a DJ
that the '707 patent is invalid, is not infringed by CBOE,
and is unenforceable because of inequitable conduct before the PTO.
The New York action eventually was transferred to the
Northern District of Illinois where the cases were
consolidated.
After the district court issued its final claim construction
order, CBOE moved for SJ of noninfringement based on the district
court's construction of the terms "system memory
means," "matching," and "automated
exchange." The district court denied the portion of
CBOE's motion based upon the "automated exchange"
limitation, but granted the motion with respect to the "system
memory means" and "matching" limitations. ISE
appealed on claim construction and the resulting SJ decision.
On appeal, the Federal Circuit first reviewed claim
construction. With regard to the means-plus-function term
"system memory means," the parties agreed on the function
of this claim limitation but disputed the corresponding disclosed
structure. ISE contended that "system memory" is
sufficient. CBOE argued, and the district court agreed, that
the structure associated with the claim limitation also includes
the bid-matching process
and the offer-matching process because those processes store
allocating parameters pertaining to public customer orders while
the system memory stores allocating parameters related to
professional orders. CBOE further contended that the
bid-matching process and the offer-matching process
"store" allocation parameters because they
"apply" and "contain" allocation parameters.
The Court found that the specification did not support
CBOE's position. The Court explained that system
memory is the disclosed structure clearly associated with
"system memory means," and the language in the
specification shows that the bid-matching process and the
offer-matching process "apply," not "store,"
allocation parameters. The Court further explained that
the general presumption that different terms have different
meanings remain because nothing in the '707 patent
suggests that "storing" and "applying" are used
interchangeably in reference to allocation parameters.
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