Judgments of Non-infringement Premised on District Court’s Flawed Claim Construction are Vacated

Case: Lava Trading, Inc. v. Sonic Trading Mgmt., LLC, No. 05-1177, 05-1192 (Fed. Cir. 4/19/06)

The One Sentence Summary: Federal Circuit vacates judgments of non-infringement of a patent, involving software that aggregates and integrates securities trading and order placement information from various alternative trading systems, where judgment orders were premised on district court's flawed claim construction.

What They Were Fighting About: Plaintiff had a patent for software that aggregates and integrates securities trading and order placement information from various alternative trading systems. During an infringement suit, the District Court made a claim construction ruling from the bench that limited the patent’s claim to software that provided information on all securities in a combined order book, rather than some subset of those securities. Plaintiff appealed the ensuing stipulated judgments of non-infringement.

Federal Circuit Holdings:

• Plaintiff did not waive its theory on appeal -- that its patent claimed software that aggregated and integrated trading information on any or all securities in a combined order book -- by unsuccessfully asserting that theory before the District Court.
• A person of ordinary skill in the art would not have limited the patent’s claim as the District Court had. Language in the patent claim described the patented software as providing trading information to traders in “a” security or commodity, rather than “all” securities and commodities. Moreover, embodiments in the specification clearly envisioned use of the software to provide information on subsets of securities in a combined order book. Thus, the Court set aside the District Court’s claim construction.
• Because the final judgment orders were premised on the District Court’s flawed claim construction, they too had to be set aside.