Had the CAFC been Jurors, They’d Have Told the Judge to Grant a Directed Verdict.

A first read of Muniauction v. Thomson left a bewilderment – was this the worst CAFC decision of 2008, or one of the worse patents in a 2008 appeal.  Such thoughts continued, until the complete fog thinned to a thin veil of haze.  It’s a candidate for both awards.  Not that I aver any understanding of bond auction methodology, but within a broad frame of reference it’s an auction of instruments with price parameters.  To reinvent to patent that as a internet based business method would require some obvious dancing down by State Street Bank.  Then, for exemplary work in the field of de novo appeal judging, the panel chooses to disagree with the Examiner, the patentee, the jury and the district judge.  No real rules of law are necessary, it was a race to a result, because post-KSR and post-J. Michel’s speaking tour, bad patents need to be smote from the rolls over at the USPTO.

Jurors did not find clear and convincing evidence of invalidity, and the district judge found that that evidence of secondary considerations was substantial enough to sustain the jury’s verdict.  The CAFC felt, had they been out of their robes, and in their civvies sitting as jurors, they would have seen the obviousness of the subject matter and the error of that district judge’s ways.

The claim interpretation apparently was not disputed, but it whipsawed the patentee.  The judge construed an “automatic computation” step, and extended that to hold that this step did not need to be performed on the platform on which the auction was conducted.  In the prior art, this computational element was off-board, that is, it might be done on the bidder’s computer, then uploaded to the auction.   By one translation, that meant this element was not present in the primary reference.  Could it there then be evidence of obviousness that was clear and convincing?

Free of any requirement for a teaching suggestion or motivation to combine, the CAFC takes the patent grant down.  This decision, and its reliance on the earlier Leapfrog Enterprises case, signal a death knell to methods of doing business, which were known, then adapted to an internet or networked environment.

Again, this patent may not have been strong, nor the invention altogether novel, but for an appellate court to invalidate based on its view of a evidence that perhaps was a preponderance, shows the power of the CAFC to do as it thinks right.  It is not a court of review, it is a de novo court.