Appeals court overturns ITC ruling in Diebold-Hyosung patent dispute

The United States Court of Appeals for the Federal Circuit has reversed an earlier finding by the International Trade Commission that Diebold Nixdorf ATM components infringed a patent owned by Nautilus Hyosung.

That dispute involved Diebold ATMs that are able to receive and process both cash and checks in a single, mixed bundle.

Thirteen months ago, the International Trade Commission agreed with Hyosung that Diebold was in violation of U.S. Patent No. 8,523,235 for a "cheque standby unit" used in mixed media deposits, and ruled that Diebold could no longer import related components for use in its ATMs.

Today, a three-judge panel on the appeals court overturned the ITC decision favoring Hyosung. In overruling the ITC, the court stated its opinion that "the term 'cheque standby unit' in the ’235 patent is a means-plus-function term ... which lacks corresponding structure disclosed in the specification."

The '235 patent was one of four patents that Hyosung initially accused Diebold of infringing in a February 2016 filing. Hyosung later voluntarily withdrew three of those claims, leaving only the '235 patent in dispute. 

The appeals court ruling states that:

Although the Commission found that “[f]igure 2 of the ’235 patent teaches a cheque standby unit ... that temporarily stores at least one authentic cheque by holding it in position on the belt,” ... no structure is disclosed in the figure or written description that is capable of performing this function. Instead, all that is depicted in the figure for item 120 is a pair of vertical lines that wraps around the outside of two cylinders. These lines are indistinguishable from main transfer unit 106a, which both precedes and follows item 120. ...

 Because the ’235 patent fails to disclose any structure corresponding to the function of “holding the at least one authentic cheque to return the at least one authentic cheque to the user responsive to receiving user instructions cancelling depositing of the at least one authentic cheque,” we conclude that claims 1–3, 6, 8, and 9 are invalid for indefiniteness ...

Diebold Nixdorf subsequently issued a statement applauding the decision of the Federal Appeals Court:

Today’s decision is welcome because Diebold Nixdorf knew it did not infringe a valid patent and we are gratified that this ruling confirms this. We look forward to the Federal Circuit affirming the exclusion order the ITC issued on Diebold’s two patents, where the ITC found what it called ‘strong evidence’ that Hyosung had copied our invention. Diebold Nixdorf is, like many American manufacturers, committed to competing on a level playing field based who can deliver the most innovative technology.

The case is Diebold Nixdorf, Inc., Diebold Self-service Systems, Appellants v. International Trade Commission, Appellee Hyosung TNS Inc., Nautilus Hyosung America Inc., Intervenors, 2017-2553, Appeal from the United States International Trade Commission in Investigation No. 337-TA-989.

Topics: Components, Manufacturers, Regulatory Issues

Companies: Diebold Nixdorf, Hyosung

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