This case involves an inter partes review of U.S. Patent No. 7,623,033, which covers methods and systems for tracking items using beacon devices and item tracking devices. Qualcomm initiated the review, arguing that claims 1 through 25 of the patent were unpatentable as obvious over prior art references, specifically a patent application by Hashimoto and a book by Bhuptani. The Patent Trial and Appeal Board issued a final written decision finding the claims unpatentable. FedEx appealed, challenging the Board's construction of the term 'programming change' in claim 7 and the Board's factual finding that the prior art disclosed such a change. The Board had interpreted 'programming change' broadly to include storing new instructions in memory, even if the device's function remained the same, whereas FedEx argued it required a change in the device's function.
The Federal Circuit applied de novo review to the Board's legal conclusions regarding claim construction and substantial evidence review to its factual findings. The court agreed with FedEx that the Board erred by importing limitations from the specification into the claim. The court analyzed the intrinsic evidence, noting that the patent specification consistently characterizes 'programming' as dictating how a device detects conditions and alters its operation. The court held that the plain and ordinary meaning of 'programming change' in this context is limited to a change in the function of the program or device. The court distinguished between 'programming' (instructions) and 'data' (information), citing established computing principles that a mere change in data, such as updating a stored variable, does not constitute a programming change. Applying this correct construction, the court found that the Board's reliance on Hashimoto was unsupported by substantial evidence. Hashimoto disclosed updating a freshness date on a RFID tag based on temperature, but this was merely a change in a stored variable, not a change in the function of the system. The court rejected the Board's alternative finding that Hashimoto disclosed a programming change, concluding that the prior art did not teach the specific limitation of a functional change recited in claim 7.
The Federal Circuit reversed the Board's determination that claim 7 is unpatentable and remanded the case for the Board to reconsider the obviousness determination under the correct legal standard. This ruling limits the scope of 'programming change' in similar patent contexts to functional alterations, preventing the Board from relying on mere data updates to invalidate claims. The decision clarifies the boundary between instructions and data in patent claim construction, requiring patent owners to demonstrate a functional change in prior art to prove obviousness for similar limitations.
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