Noah Systems, Inc. V. Intuit, Inc

United States Court of Appeals for the Federal Circuit __________________________ NOAH SYSTEMS, INC., Plaintiff-Appellant, v. INTUIT INC., Defendant-Appellee. __________________________ 2011-1390 __________________________ Appeal from the United States District Court for the Western District of Pennsylvania in Case no. 06-CV-933, Judge Arthur J. Schwab. _________________________ Decided: April 9, 2012 _________________________ ERIC G. SOLLER, Pietragallo Gordon Alfano Bosick & Raspanti, LLP, of Pittsburgh, Pennsylvania, argued for plaintiff-appellant. With him on the brief was ALAN G. TOWNER. MICHAEL J. SACKSTEDER, Fenwick & West LLP, of San Francisco, California, argued for defendant-appellee. With him on the brief was DAVID D. SCHUMANN. __________________________ NOAH SYSTEMS v. INTUIT INC 2 Before RADER Chief Judge, O’MALLEY and REYNA, Circuit Judges. O’MALLEY, Circuit Judge. Noah Systems, Inc. (“Noah”) appeals the district court’s entry of judgment in favor of Intuit Inc. (“Intuit”). After construing the disputed terms of the asserted claims of U.S. Patent No. 5,875,435 (“the ’435 patent”), the district court determined that an “access means” limitation in the claims of the ’435 patent was indefinite, and, therefore, granted Intuit’s Motion for Summary Judgment of Invalidity. Because we agree that the “access means” limitation is indefinite, we affirm the district court’s judgment. BACKGROUND This appeal arises out of an action brought by Noah against Intuit for infringement of the ’435 patent. The ’435 patent relates to an automated financial accounting system. The system allows a business or individual to connect to the computers of companies with which that entity conducts business so that information regarding financial transactions can be transmitted between them. Noah asserts that Intuit’s Quicken and QuickBooks products infringe system claims 12–17, 29–38, and 40–56. All of the asserted claims contain an “access means” limitation. The parties agree that this is a means-plus- function limitation performed by a processor. As such, the specification of the ’435 patent must contain an algorithm to perform the function associated with the “access means” limitation, or the limitation is indefinite. This appeal turns on whether the specification discloses an algorithm to perform the function or functions associated with the “access means” limitation. 3 NOAH SYSTEMS v. INTUIT INC I. The ’435 Patent The ’435 patent discloses an accounting system and methods for using the system.1 The automated accounting system includes a financial accounting computer, a financial transaction computer, a communications means, and an access means. ’435 patent col.2 ll.26–41. The disclosed system “brings together . all of the various entities that are involved with financial transactions between a first entity, such as an individual or a business, and other entities, such as merchants, financial institu- tions and the like.” Id. at col.3 ll.56–64. In the patented system, the financial accounting computer is associated with the first entity, whereas the “other entities” possess the financial transaction computers. Id. at col.3 l.66–col.4 l.10. The financial accounting computer contains a master ledger file that is used to receive and record data transmitted from the financial transaction computers. Id. at col.3 ll.26–30; col.4 ll.32–35. Each financial transaction computer, on the other hand, contains a subsidiary ledger file, which stores information regarding transactions made between the first entity and that second entity. Id. at col.4 ll.4–13. Periodically, financial transaction data is transferred from subsidiary ledger files to the master ledger file on the financial accounting computer. Id. at col.6 ll.9–14. After the system transfers and incorporates the financial transaction data into the master ledger, the system provides authorized agents of the first entity with access to the master ledger, so they can “enter, delete, review, adjust and process data inputs” contained within the file. Id. at col.4 ll.45–61. The specification describes the “access means” in relation to the flow chart contained in 1 Noah does not assert that Intuit’s products infringe the patent’s method claims. NOAH SYSTEMS v. INTUIT INC 4 Figure 1. The relevant portion of Figure 1’s flow chart discloses: Id. at Fig. 1. Describing Figure 1, the specification states, “line 27 leads to box 32 where passcodes are issued to approved interactive account user(s) and agent(s). This access to the master ledger . allows the agents to perform activities selected from the group consisting of entering, deleting, reviewing, adjusting and processing data inputs in the master ledger . .” Id. at col.4 ll.47–56. After passcodes are issued, “[l]ine 41 then leads to box 44 where the access to the data inputs in the master ledger is set forth. 5 NOAH SYSTEMS v. INTUIT INC This access can be provided to interactive users and agents of the first entity.” Id. at col.6 ll.15–18. At box 44, the system enables authorized agents to enter “change order[s], recording instruction adjustments, manual transactions and the like . .” Id. at col.6 ll.18–20. Once an agent has entered an order, the system, at box 52, determines whether the entry is valid. Id. at col.6 ll.22– 23. An entry’s validity “is determined by whether the passcode matches the predesignated list of approved passcodes and whether the entry is complete in form and substance.” Id. at col.6 ll.28–30. The system will process only valid entries. See id. at col.6 ll.22–36. Noah alleges that Intuit’s products infringe independ- ent claims 12, 52, 53, and 56. Representative independ- ent claim 12 recites: A financial accounting system for a first entity such as an individual or a business, said system comprising: a financial accounting computer having at least one file; a financial transaction computer for receiving data inputs, said data inputs including electroni- cally recorded financial transactions made between said first entity and a second entity; first communication means for transferring said data inputs from said financial transaction computer to said file of said financial accounting computer; and means for providing access to said file of said financial accounting computer for said first entity and/or agents of said first entity so that said first entity and/or said agent can perform one or more activities selected from the group consisting of en- NOAH SYSTEMS v. INTUIT INC 6 tering, deleting, reviewing, adjusting and processing said data inputs. Id. at col.12 ll.25–41 (emphasis added). The parties agree that the emphasized language is the “access means” limitation.2 II. Procedural History Shortly after Noah filed its complaint, Intuit re- quested an ex parte reexamination of the ’435 patent. The PTO granted this request, and the litigation was stayed pending resolution of the reexamination. Ultimately, on June 9, 2009, the PTO confirmed the patentability of the original claims of the ’435 patent and determined that new claims 19–56 were patentable. Joint Appendix (“J.A.”) 138–42. Upon resolution of the reexamination proceedings, the district court lifted its stay, re-opened the case, and permitted Noah to also assert infringement with respect to its newly allowed claims. After the case was re-opened, the parties proceeded with claim construction briefing. Although the parties disputed the construction of many terms, only the construction of “access means” is relevant to this appeal.3 Both parties agreed that this limitation is a means-plus- 2 Claim 53’s “access means” limitation is worded slightly differently. Neither party argues that the slight difference has any effect on the outcome of this appeal. 3 Intuit argues that, if we disagree with the district court’s construction of the term “access means” and its conclusion that such construction invalidates the ’435 patent on indefiniteness grounds, we should otherwise affirm summary judgment of invalidity on the alternative ground that a “first communication means” limitation in the asserted claim is indefinite. Given our conclusions here, we decline to reach the merits of this argument or to consider Noah’s contention that Intuit has waived the right to raise it. 7 NOAH SYSTEMS v. INTUIT INC function limitation. The parties also agreed that the function performed by the “access means” is “providing access to the file of the financial accounting computer for the first entity and/or agents of the first entity so that the first entity and/or the agent can perform one or more of the activities selected from the group consisting of entering, deleting, reviewing, adjusting and processing the data inputs.” Report and Recommendation of Special Master on Claim Construction at 38, Noah Sys., Inc. v. Intuit Inc., No. 06-CV-933 (W.D. Pa. May 7, 2010), ECF No. 82 (“Claim Construction R&R”). The parties did dispute, however, what structure per- forms this function. Noah argued that “[t]he structure includes the financial accounting computer . which is programmed to allow access to files on the computer upon entry of a passcode.” Noah’s Opening Claim Construction Br. at 25, Noah Sys., Inc. v. Intuit Inc., No. 06-CV-933 (W.D. Pa. Nov. 13, 2009), ECF No. 73. Intuit, on the other hand, argued that the structure was indefinite because the specification disclosed no algorithm by which the computer was programmed to perform the function asserted in the claims. Intuit Inc.’s Opening Claim Con- struction Br. at 12–16, Noah Sys., Inc. v. Intuit Inc., No. 06-CV-933 (W.D. Pa. Dec. 4, 2009), ECF No. 74. After conducting a day-long Markman hearing, the court- appointed special master issued his Claim Construction R&R.

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