Federal Circuit Weighs In On Limiting Effect of Preambles

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White & Case Technology Newsflash

The Federal Circuit recently affirmed a district court decision that a claim preamble did not limit the claim scope, determining the defendant's non-infringement position based on the language of the preamble was properly rejected in Georgetown Rail Equipment Co. v. Holland L.P.1

The patent-in-suit, U.S. Patent No. 7,616,329, disclosed a system and method for inspecting a railroad track using lasers, cameras, and a processor to capture and analyze images of the track. Holland, the accused infringer, used measuring technologies in conjunction with its track inspection vehicles to gather images of railroad tracks. These images were sent to third-party vendors to be analyzed for missing or damaged pieces.

In claim construction, the Eastern District of Texas found that although the preamble of the asserted claim included the phrase "mounted on a vehicle," this phrase did not limit the claim scope. Thus, Holland's system infringed despite not having a processor located on the inspection vehicle. After a jury found that Holland willfully infringed and awarded $1.5 million in damages to Georgetown, the court denied Holland's motion for judgment as a matter of law, and awarded an additional $1 million in enhanced damages.


Preamble Phrase Is Not Limiting Because Specification Shows Intent to Include Non-Vehicle Mount

On appeal, the Federal Circuit affirmed the district court's decision that the preamble was not limiting. This decision is consistent with the general rule that a preamble is not limiting unless, upon review of the entire patent, the preamble recites essential structure or steps of the invention. The Federal Circuit began by noting that the specification discloses embodiments where the processor is not mounted on a vehicle. Accordingly, the preamble merely highlights the primary intended use of the invention, and does not recite its essential structure. The Federal Circuit also rejected Holland's argument that the preamble was "essential" to understanding the claim body, finding that the claim body, standing alone, described a "structurally complete" system.


Defendant "Used" the Infringing System By Sending Information to Third Party

Holland also challenged the infringement verdict, arguing that no reasonable jury could have found Holland "used" the infringing processors because the processors were operated by third-party vendors.  The Federal Circuit disagreed, applying its holding in Centillion Data Systems., LLC v. Qwest Communications International, Inc.2 that an actor "uses" an entire system by entering informational queries into the front-end software, which causes the back-end software to perform processing that meets the limitations of the patent claim. Under the Centillion rule, Holland "put into service" the back-end processors, and thereby "used" them, by sending the images to the third-party vendors with instructions to analyze and process them.  Even if the processors were never in Holland's physical possession, Holland ultimately maintained control of, and derived a benefit from, the entire patented system.


Consequences for Patentees and Litigants

The Federal Circuit's decision in Georgetown highlights the fine line between limiting and non-limiting preambles.  As recently as 2015, the Federal Circuit reached the opposite conclusion from Georgetown in Pacing Technologies, LLC. v. Garmin International, Inc.3 where it held that the preamble phrase "repetitive motion pacing system" in a pacing tool patent was limiting. In Pacing Technologies, the Federal Circuit relied on the specification's statement that all enumerated objects of the invention "are accomplished . . . by a repetitive motion pacing system that includes . . . a data storage and playback device adapted to producing the sensible tempo."4 This statement, the Federal Circuit held, was an unmistakable disavowal of all systems that do not produce a sensible tempo, despite the disclosure of an embodiment in the specification where the system does not produce a sensible tempo.5 Thus, the preamble limited the claim scope to systems that produce a sensible tempo. 

From a policy perspective, the flexible standard applied by the courts can exacerbate issues of patent clarity and uncertainty in patent litigation. First, the lack of a bright-line rule on the limiting effect of preambles can encourage applicants to draft ambiguous preambles to avoid closing off potential claim construction positions. The resulting patents are more likely to leave ambiguity with respect to their claim scope, thereby failing to inform the public of the bounds of the protected inventions.

Second, when a patent is asserted, any dispute about the limiting effect of a preamble will require the court to conduct a fact-intensive review of the entire patent. This "entire patent" review adds uncertainty to the litigation process and prevents cases from settling before claim construction. Since evidence can be drawn from the entire specification, claims, and prosecution history, the "entire patent" review allows for wide variance in the claim construction outcomes across different districts and judges, and even from case to case.

In the face of uncertainty over the limiting effect of preambles, parties should cast a wide net in discovery and develop a range of infringement and invalidity theories. In light of the variability across judges and the Federal Circuit's unpredictable track record when reviewing such decisions de novo, parties should be cautious about making assumptions and should prepare for each possible claim construction outcome.


1 Georgetown Rail Equip. Co. v. Holland L.P., No. 2016-2297, 2017 U.S. App. LEXIS 13908 (Fed. Cir. Aug. 1, 2017).
2 Centillion Data Sys., LLC v. Qwest Commc'ns Int'l, Inc., 631 F.3d 1279 (Fed. Cir. 2011).
3 Pacing Techs., LLC. v. Garmin Int'l, Inc., 778 F.3d 1021 (Fed. Cir. 2015).
4 Id. at 1025 (emphasis added).
5 Id. at 1025-26.
6 Id. at 2015.


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