Patents’ Children Inherit Limitations

by Adam Philipp on May 18, 2012

Patent history
Flows to patent progeny,
Says Federal Court

In a slip opinion, the Federal Court for the Northern District of Illinois has ruled that the prosecution history and estoppel from an earlier patent flowed to all the “children” of that patent.

The case of Trading Techs. Int’l., Inc. v. BCG Partners, Inc. began in early 2010.  Plaintiff Trading Technologies International, Inc. ("TT") filed a dozen cases in the District alleging infringement of patents relating to futures trading software.  The software is used by traders to place orders on electronic exchanges.  Specifically, the patents concern how the software displays market information to traders and allows them to submit orders.

One of the patents at issue is 7,676,411 for:

A method and system for reducing the time it takes for a trader to place a trade when electronically trading on an exchange, thus increasing the likelihood that the trader will have orders filled at desirable prices and quantities. The “Mercury” display and trading method of the present invention ensure fast and accurate execution of trades by displaying market depth on a vertical or horizontal plane, which fluctuates logically up or down, left or right across the plane as the market prices fluctuates. This allows the trader to trade quickly and efficiently.

The parties disputed whether the Federal Circuit’s earlier comments on the related ‘132 patent’s  specification (the same specification used by the ‘411 patent) meant that the specification disclosed only static price axes and thus that the claims in the ‘411 patent (covering price axes in general) were too broad.

After the court consolidated the 12 cases, both sides moved for summary judgment.
Two of the defendants asserted

that TT should be barred from asserting that products with price axes that move automatically infringe under the doctrine of equivalents, because the Federal Circuit found that TT disclaimed all price axes that move automatically when it prosecuted the claims of the ‘132 patent and another parent patent.

Noting that "the doctrine of prosecution history estoppel prevents a patent owner from recapturing through the doctrine of equivalents subject matter surrendered to acquire the patent," the court granted the defendants’ motion with respect to some of the patents and denied it as moot with respect to others.

A key takeaway from this case is that if it is possible to separate separate inventions at the time of filing the patent application, it may be beneficial to take the time to do so. Otherwise, limiting definitions in one case may be applied to other cases in the same family.

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