Cybersettle v. National Arbitration Forum (NAF) (Fed. Cir. 2007) (non-precedential)
Cybersettle owns the patent on a computerized dispute resolution method. Disputing parties make settlement bids into a computer. If there is a close-enough match between the parties, the case is settled. A party may pre-submit multiple bids to be used in consecutive bidding rounds.
The National Arbitrators Forum (NAF) is a private corporation that handles arbitration and was sued for infringement — apparently after conducting 100,000+ such resolutions. NAF lost its infringement suit, but appealed on claim construction.
Cybersettle’s claimed method includes the steps of “receiving a plurality of demands [and] a plurality of settlement offers.” The lower court, however, did not require the receipt of multiple offers and demands. Rather, the claim was construed to be satisfied if the system “has the capacity to receive multiple offers and demands, even if ony one demand and one offer are received.”
On appeal, the CAFC reversed, finding that a claimed method requires actual practice of the method — not simply the capability.
A patented method is a series of steps, each of which must be performed for infringement to occur. It is not enough that a claimed step be “capable” of being performed.
On remand, the district court will need to determine what portion of NAF’s infringing actions included multiple offers and demands.
In the course of their operation, the accused … systems would infringe (assuming all the other claim limitations were satisfied) only when they received multiple demands and multiple offers; proof that those systems were capable of receiving multiple demands and multiple offers is not proof that they ever performed the claimed methods.
Vacated and remanded.