CAFC Reverses Apple Win Against Fintiv Due to District Court’s Claim Construction

The U.S. Court of Appeals for the Federal Circuit (CAFC) on Friday, May 16, reversed a district court’s decision granting summary judgment of non-infringement for Apple. The CAFC found that, under the district court’s broad construction of the term “widget,” Fintiv, Inc. had presented enough evidence to “create a genuine issue of material fact that a widget exists in the accused products,” and therefore potentially infringed.

Fintiv’s U.S. Patent No. 8,843,125 covers a mobile wallet management system. The invention allows for storage of virtual cards in a mobile wallet application. Finitiv claimed that Apple’s iPhone, iPad, Apple Watch and Mac devices infringed certain claims of the patent via the use of Apple Pay and Apple Wallet.

The U.S. District Court for the Western District of Texas construed the term “widget” to have its “plain-and-ordinary meaning and where the plain-and-ordinary meaning is ‘software that is either an application or works with an application, and which may have a user interface.’” Both parties accepted this construction. Apple moved for summary judgment of non-infringement, in part on the ground that its devices did not infringe the “widget” limitation and “‘widget’-related limitations.”

The district court initially denied summary judgment without explanation but then reversed course after Apple reargued its motion one month prior to the scheduled trial. The court explained that Fintiv and its expert witness, Dr. Michael Shamos, “failed to identify the claimed widget in the accused products.”

While the CAFC disagreed with FIntiv’s argument that the district court erroneously required it to present source code evidence of a widget, finding the court reasoned Fintiv failed to present both source code and non-source code evidence, it did agree with Fintiv that the court erred in granting summary judgment. The CAFC explained:

“The district court adopted a broad construction of ‘widget,’ defining it as ‘software that is either an application or works with an application, and which may have a user interface.’ …This construction does not require the claimed widget to possess any particular functional attributes, nor does it specify what the widget mustdo in relation to other claim limitations…. Under this broad construction, Fintiv proffered sufficient evidence to create a genuine issue of material fact that a widget exists in the accused products.”

The CAFC noted that the district court did not grant summary judgment on what it identified as “the real issue,” namely, “whether the alleged widget as identified by Fintiv can satisfy related claim limitations.” While Apple argued that these limitations could

not be satisfied during oral argument, “the district court did not grant summary judgment based on those related claim limitations and that issue was not briefed to us on appeal,” said the CAFC. The panel therefore remanded the case to the district court “to address whether summary judgment of noninfringement is warranted as to those limitations or on the remaining grounds asserted by Apple, which the district court did not reach.”

In two other CAFC decisions issued on Friday, Apple was more successful. In Billjco v. Apple, the CAFC affirmed two Patent Trial and Appeal Board (PTAB) decisions finding claims of two of Billjco’s patents were unpatentable as obvious, and in another case between Apple and Billjco, also on appeal from the PTAB, the CAFC again affirmed the Board’s findings of unpatentability