The factual context is of more obvious import (pun, as we shall later see, intended). On Demand Machine owns the rights in the so-called "Ross Patent" (US Pat. No. 5,465,213) for "[A] System and Method of Manufacturing a Single Book Copy." In less-stilted terms, this is a patent covering certain print-on-demand technology. The crucial limiting language in the description of the invention is described in the Federal Circuit opinion as:
[A] single copy of a book is printed and bound, generally at the site of sale, upon provision to the customer of computerized information about the book. According to the Ross patent, a retail seller of books provides a computer console for customer use, wherein the computer stores promotional and other information such as book reviews and price, and also stores the complete text of the book and the design of its cover. The customer can browse through the stored information, inspect the text, and select a book for purchase; the book is then printed and bound, preferably at the same site.
Slip op. at 2 (emphasis added). On the other hand, Lightning Source (of which the defendant Ingram—one of the two dominant trade book distributors—is the corporate parent) practices a much more traditional printing model using relatively new technology: Stores (or distributors) send orders to Lightning Source, which prints up the orders; the store, in turn, delivers the copy to a specific customer. In short, the Ross Patent is little more than "publishing using POD without any middleman."
Ingram, not being directed by entirely stupid managers, sought counsel's opinion on whether its middleman-run POD operations might infringe the Ross Patent. The Federal Circuit describes that opinion in rather interesting language:
Counsel also advised that infringement would not be found if the claims were limited to the embodiment shown in the specification, but cautioned that if a trier of fact were to look at the claim language in isolation from the specification and the embodiment described therein, infringement might be found, although such broad claims would be of questionable validity in view of the prior art.
Slip op. at 5–6 (emphasis added). The court eventually found that Lightning Source's operation is founded in prior art, preventing the Ross Patent from reaching Lightning Source's operation—based in part on concessions that Ross made during patent examination to obtain any patent at all.
The printing of a single copy of a book, using computer technology and high-speed printing, was prior art to the Ross patent. The defendants correctly point out that the Ross invention is the immediate printing and binding of a copy of a book, where the customer initiates this activity upon review of promotional information stored in a computer that is provided by the seller. Mr. Ross stressed during reexamination that the distinction of his invention over the Interpress reference is the inclusion of promotional information for customer access, and prompt book production. The Interpress reference, as described by the reexamination examiner, shows computer-stored book text and information (but not promotional information), a means for selectively retrieving a stored book, and high-speed printing plus binding with a cover. However, Interpress does not show the direct customer role contemplated in the Ross patent; that role is central to the claim construction.
Slip op. at 21.
The obvious implication is that Lightning Source will not be forced to either discontinue its operation or pay a 12% royalty on each copy to On Demand Machine. Thus, price rises will be only in attempts to adjust to market conditions (regardless of whether one construes them as in good faith… or gouging). And the flood of slush-pile-quality POD books need not diminish.
The less-obvious implication concerns the so-called "plot patent" application. In my analysis of that less-than-good-faith application, I noted the importance of prior art and skill in the respective discipline in "anticipating" the patented plot. This is the flip side of that argument: Any change in any element of the "patented invention," when the restriction in that element was adopted to avoid anticipation through prior art, will be strictly construed against a claim of infringement. In On Demand Machine, the Federal Circuit held that use of the technology at a central factory was sufficient to take Lightning Source's operation outside the scope of the Ross Patent. How to get outside the scope of the prospective Knight Patent is left as an exercise for the student; your papers (which must exceed 40,000 words in length but may not exceed 120,000 words, exclusive of citations) are due on 01 April 2007.