Full opinion text
MEMORANDUM OPINION AND ORDER REGARDING CONSTRUCTION OF DISPUTED PATENT CLAIM TERMS MARK W. BENNETT, District Judge. TABLE OF CONTENTS /. INTRODUCTION..........................................................871 A. Procedural Background................................................871 B. Factual Background...................................................873 1. The parties•........................................................873 2. The patent-in-suit.................................................873 a. The inventors and dates of filing and issuance...................873 b. The Abstract and Field Of The Invention........................873 c. The Background Of The Invention ..............................874 d. The Brief Summary Of The Invention ...........................875 e. The Detailed Description.......................................880 i. The description of a first method...........................880 ii. The description of a second method.........................884 Hi. Is a third method described?...............................886 f. The Flow Charts...............................................891 g. Pertinent claims of the patent..................................891 C. Agreed Constructions..................................................892 D. Disputed Constructions................................................893 II. LEGAL ANALYSIS........................................................898 A. Principles Of Patent Claim Construction................................898 1. The Phillips methodology ..........................................898 a. The starting point.............................................898 b. Hierarchy of evidence..........................................898 2. Other canons of claim construction..................................901 3. The court’s independent obligation to construe terms .................902 4. The court’s supposed duty to determine overall scope of exclusive claim coverage ..................................................903 B. Agreed Constructions Of Terms Of The '201 Patent.......................905 C. Disputed Constructions Of Terms Of The '201 Patent.....................905 1. Claim 35: Preamble ...............................................905 a. “Annuity”....................................................905 b. “Variable annuity”............................................906 i. Proffered constructions....................................906 ii. Initial arguments of the parties............................907 iii. Tentative analysis........................................907 iv. Oral and post-hearing arguments...........................909 v. Post-hearing analysis ....................................910 c. “Systematic withdrawal program”..............................912 i. Proffered consti-uctions....................................912 ii. Initial arguments of the parties............................912 iii. Tentative analysis........................................913 iv. Post-hearing arguments...................................916 v. Post-hearing analysis.....................................917 d. “Guaranteed minimum payment feature associated with a systematic withdrawal program” .............................918 i. Proffered constructions....................................918 ii. Initial arguments of the parties............................919 iii. Tentative analysis........................................920 iv. Oral and post-hearing arguments...........................922 v. Post-hearing analysis.....................................923 e. “Scheduled payment”..........................................925 i. Proffered constructions....................................925 ii. Initial arguments of the parties............................925 iii. Tentative analysis........................................925 iv. Oral and post-hearing arguments...........................927 v. Post-hearing analysis.....................................929 f. “Periodically determining an amount [of a scheduled payment]”..................................................929 i. Proffered constructions....................................929 ii. Initial arguments of the parties............................930 iii. Tentative analysis........................................931 iv. Oral and post-hearing arguments...........................933 v. Post-hearing analysis.....................................934 2. Claim 35: Step a ..................................................935 a. “Account value” ..............................................935 /. Proffered constructions....................................935 ii. Initial arguments of the parties............................935 iii. Tentative analysis........................................936 iv. Oral and post-hearing arguments...........................936 v. Post-hearing analysis.....................................937 b. “Withdrawal rate ”.............................................938 i. Proffered constructions....................................938 ii. Initial arguments of the parties............................938 iii. Tentative analysis........................................939 iv. Oral and post-hearing arguments...........................940 v. Post-hearing analysis.....................................941 c. “Payout term”................................................942 i.Proffered constructions....................................942 ii. Initial arguments of the parties............................942 iii. Tentative analysis........................................943 iv. Oral arguments...........................................944 v.Post-hearing analysis.....................................944 d. “Benefit payments”............................................945 i. Proffered constructions....................................945 ii. Arguments of the parties...................................945 iii. Analysis .................................................945 e. “Period of benefit payments ”...................................946 i. Proffered constructions....................................946 ii. Arguments of the parties...................................947 iii. Analysis .................................................947 3. Claim 35: Step b: “Determining an initial scheduled payment”.......................................................949 a. The proffered constructions.....................................949 b. Initial arguments of the paHies.................................950 c. Tentative analysis.............................................950 d. Oral and post-hearing arguments ...............................951 e. Post-hearing analysis .........................................951 4. Claim 35: Step c...................................................952 a. “Periodically determining account value”.......................952 /. Proffered constructions....................................952 ii. Initial arguments of the paHies............................952 iii. Tentative analysis........................................953 iv. Oral arguments...........................................954 v.Post-hearing analysis.....................................954 b. “Making the scheduled payment [by withdrawing that amount from the account value]”.............................955 i.Proffered constructions....................................955 ii. Arguments of the paHies...................................955 iii. Analysis .................................................955 5. Claim 35: Step d ..................................................955 a. “Monitoring ”..................................................956 b. “Unscheduled withdrawal”.....................................956 i. Proffered constructions....................................956 ii. Arguments of the paHies...................................957 iii.Analysis .................................................957 c. “Adjusting the amount of the scheduled payment in response to said unscheduled withdrawal”.............................960 i. Proffered constructions....................................960 ii. Arguments of the paHies...................................960 iii. Analysis .................................................961 6. Claim 35: Step e: “Periodically paying the scheduled payment......................................................962 a. The proffered constructions.....................................962 b. Arguments of the paHies.......................................962 c. Analysis......................................................963 7. Claim 36..........................................................967 a. “Scheduled withdrawal payment”...............................968 b. “[Initial] scheduled payment”..................................969 i. Proffered constructions....................................969 ii. Arguments of the paHies...................................969 iii.Analysis .................................................969 c. “Initial account value” ........................................971 i. Proffered constructions....................................971 ii. Arguments of the paHies...................................971 iii. Analysis .................................................971 8. Claim 37..........................................................972 a. “Account value is periodically determined by the [stated] formula”....................................................973 i. Proffered constructions....................................973 ii. Arguments of the parties...................................973 Hi. Analysis .................................................973 b. “Net fund performance”........................................973 i. Proffered constructions....................................973 ii. Arguments of the parties...................................973 Hi. Analysis .................................................974 9. Claim 38: “The scheduled payment is adjusted in response to an unscheduled withdrawal, according to the [stated] formula”.....974 a. The proffered construction......................................974 b. Arguments of the parties.......................................975 c. Analysis......................................................975 III. CONCLUSION............................................................978 This matter, which involves a patent for a “method and apparatus for providing retirement income benefits,” United States Patent No. 7,089,201 B1 (the '201 patent), is this court’s first foray into the rarefied realm of “business method” patents. Until quite recently, that realm was believed to lie outside the borders of the domain of patents. See State Street Bank & Trust Co. v. Signature Fin. Group, Inc., 149 F.3d 1368, 1375 (Fed.Cir.1998) (taking the opportunity “to lay [to rest] this ill-conceived notion” that a method of doing business was not “within the statutory classes” of patentable inventions); accord In re Comiskey, 499 F.3d 1365, 1374 (Fed.Cir. 2007) (explaining that State Street Bank held that patentability of a business method “does ‘not turn on whether the claimed subject matter does “business” instead of something else’ ”) (quoting State Street Bank, 149 F.3d at 1377). Because it is now clear that “business method” patents are “subject to the same legal requirements for patentability as appl[y] to any other process or method,” State Street Bank, 149 F.3d at 1375, it follows that such patents are also subject to the same standards for claim construction. Therefore, this matter comes before the court for construction of disputed claim terms after a so-called “Markman hearing.” See Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed.Cir.1995) (en banc), aff’d, 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996). I. INTRODUCTION A. Procedural Background On August 8, 2006, plaintiffs Trans-america Life Insurance Company (TLIC), Western Reserve Life Assurance Company of Ohio (WRL), and Transamerica Financial Life Insurance Company (TFLIC), collectively the Transamerica Plaintiffs, filed a Complaint For Declaratory Judgment (docket no. 1) initiating this action. In their Complaint, the Transamerica Plaintiffs assert, in essence, that they are not infringing the '201 patent owned by defendant Lincoln National Life Insurance Company (Lincoln) by selling various annuity product contracts. In contrast, in an Answer To Plaintiffs’ Complaint And Patent Infringement Counterclaim (docket no. 14), filed December 29, 2006, Lincoln seeks declarations that the '201 patent is not invalid and that the Transamerica Plaintiffs are infringing it. Lincoln also seeks damages for infringement, injunctive relief from such infringement, and reasonable attorney fees for litigating this matter. Pursuant to a Scheduling Order (docket no. 23), on September 10, 2007, the parties filed a Joint Claim Construction Statement And Chart (docket no. 28) setting forth the construction of patent claim terms, phrases, and clauses on which the parties agree, the constructions of disputed claim terms proposed by each party, and the parts of the patent or prosecution history of the patent supporting each party’s construction of disputed claim terms. Lincoln filed its Markman claim construction brief on September 14, 2007, see Lincoln’s Claim Construction Brief (docket no. 32), and the Transamerica Plaintiffs filed their Mark-man brief on September 17, 2007. See Markman Brief By Transamerica Level Parties (docket no. 37). The parties filed rebuttal briefs on claim construction on September 28, 2007. See Lincoln’s Rebuttal Claim Construction Brief (docket no. 41); Markman Reply Brief By Trans-america Level Parties (docket no. 42). In the original Scheduling Order, the court set a Markman hearing on claim construction issues for November 2, 2007, but a conflict in the court’s schedule required the court to reschedule the Markman hearing to a mutually convenient date of December 3, 2007. In two prior patent cases, the court provided the parties with tentative draft rulings on claim construction before the Markman hearings in those cases. See Ideal Instruments, Inc. v. Rivard Instruments, Inc., 498 F.Supp.2d 1131, 1136 (N.D.Iowa 2007); Maytag Corp. v. Electrolux Home Prods. Inc., 1008, 1015-16 (N.D.Iowa 2006). The court found that such a procedure was very effective in focusing the parties’ arguments on true disputes about construction of pertinent claim terms as well as on specific parts of the court’s tentative claim constructions where the parties believed that the court had gone wrong. The parties in those cases appeared to agree, because they recommended that the court follow such a procedure for rendering Markman decisions in future patent cases. Prior to the Markman hearing in this case, the court also offered the parties the opportunity to receive a tentative draft of the court’s claim constructions to prepare for the hearing. The parties readily agreed to such a procedure. Therefore, on November 29, 2007, the court provided the parties with a 176-page tentative draft ruling on claim construction issues. At the Markman hearing, the Transamerica Plaintiffs, the declaratory judgment plaintiffs and infringement counterclaim defendants, were represented by Glenn L. Johnson, who presented the Transamerica Plaintiffs’ argument, Sarah J. Gayer, and Kevin H. Collins of Shuttleworth & Ingersoll. P.L.C., in Cedar Rapids, Iowa. Lincoln, the patent holder and, consequently, the declaratory judgment defendant and infringement counterclaimant, was represented by D. Randall Brown, who presented Lincoln’s argument, and Gary C. Furst of Barnes & Thorn-burg, L.L.P., in Fort Wayne, Indiana, and by local counsel Denny M. Dennis of Bradshaw, Fowler, Proctor & Fairgrave, P.C., in Des Moines, Iowa. The parties’ arguments at the Markman hearing were remarkably well-prepared and informative. At the conclusion of the hearing, the court authorized the Transamerica Plaintiffs to file a post-hearing brief on or before January 14, 2008; Lincoln to file a response on or before January 31, 2008; and the Transamerica Plaintiffs to file any reply by February 11, 2008. The post-hearing briefs were filed according to schedule. See Transamerica’s Post-Markman Hearing Brief (docket no. 59); Lin-coin’s Post-Markman Hearing Response Brief (docket no. 60); Transamerica’s Reply Post-Markman Brief (docket no. 63). With the conclusion of this briefing, the question of the proper construction of disputed claim terms of the '201 patent is now fully submitted. B. Factual Background To provide necessary context to determination of the proper construction of disputed claim terms, the court turns to the pertinent factual background. The court’s focus in this recitation of the factual background is on the parties and the patent-in-suit, including the patent claims at issue in the infringement dispute. The court will not recount here the prosecution history of the patent-in-suit. Instead, the court will reserve discussion of any pertinent parts of the prosecution history for the court’s analysis of the proper construction of disputed claim terms, when and if resort to the prosecution history for guidance is appropriate. 1. The parties The Transamerica Plaintiffs allege, and Lincoln concedes, that the parties are all in the business of designing, marketing, and selling annuity products and other financial products. The parties also agree that Lincoln is the assignee of the patent-in-suit, United States Patent No. 7,089,201 B1 (the '201 patent), which is entitled “METHOD AND APPARATUS FOR PROVIDING RETIREMENT INCOME BENEFITS.” 2. The patent-in-suit a. The inventors and dates of ñling and issuance Although Lincoln is the assignee of the '201 patent, the inventors are identified as Jeffrey K. Dellinger, Stephen H. Lewis, Denis G. Schwartz, and Jason H. Richard. The '201 patent stems from Application No. 09/406,290, filed on September 24, 1999. The patent issued on August 8, 2006. The patent identifies two related applications: Provisional Application No. 60,101,883, filed on September 25, 1998, and Provisional Application No. 60/115,570, filed on January 12, 1999. The related Provisional Applications are still being prosecuted. b. The Abstract and Field Of The Invention The Abstract of the '201 patent briefly describes the invention disclosed therein as follows: Computerized methods for administering variable annuity plans are disclosed. In certain embodiments, minimum payment features and mechanisms for adjusting current payments in response to cumulative payment totals are provided. Other embodiments provide withdrawal features under which certain guarantees are provided if withdrawals do not exceed predetermined withdrawal rates. The '201 patent, Abstract. The Field Of The Invention, which follows, is only slightly more illuminating: The present invention relates to financial services and products. More particularly, the present invention relates to a method and system for administering retirement income benefits. The invention further relates to a data processing method and system for the efficient administration of variable annuity products, including provisions for guarantees related to retirement income derived from and death benefits associated with variable annuities, in both the accumulation and distribution (or payout) phases. The invention also relates to data processing and administrative systems used to administer withdrawals from mutual funds, particularly systematic withdrawals from such funds. The '201 patent, Field Of The Invention, Col. 1, ll. 15-26. c. The Background Of The Invention The Background Of The Invention provides some further context to the claimed invention. It explains, “Annuities typically serve the useful function of providing economic protection against the risk of longevity, in that an annuitant has the option of electing a life-contingent retirement income, thereby transferring the risk of outliving one’s accumulated assets to an insurer.” The '201 patent, Col. 1, ll. 30-34. The Background Of The Invention then attempts to explain the “different kinds of annuities available to meet the diverse needs of different individuals.” Id. at Col. 1, ll. 35-36. Somewhat more specifically, the Background explains, first, that the kinds of annuities “include deferred annuities and immediate annuities,” which are described, in pertinent part for present purposes, as follows: In a deferred annuity, an individual is typically still in the “accumulation phase” of the annuity, amassing assets intended to sustain him or her during retirement years, when an earned wage from performing work is absent. In an immediate annuity, a lump sum of money is applied to purchase a series of retirement income benefit payments, with the first payment typically being made about one month after purchase, with subsequent benefit payments arriving each month thereafter. The '201 patent, Col. 1, ll. 37-46. The Background explains, next, that “[a]nother distinction of the type of annuities available is whether it is classified as a ‘fixed annuity’-or a ‘variable annuity.’” Id. at Col. 2, ll. 1-3. Although the Background purports to explain, in some detail, the differences between these two kinds of annuities, see id., Col. 2, l. 4, to Col. 3, l. 59, the proper constructions of “annuity” and “variable annuity” (but not “fixed annuity”), as used in the pertinent claims of the patent-in-suit, are in dispute. Therefore, for the moment, at least, the court will pass on to the last portion of the Background, which distinguishes among “annuitizations,” “systematic withdrawal programs,” and “unannuitized” contracts, as follows: While annuitization guarantees lifetime income, the contract holder loses liquidity (and, depending on the type of annuity, some or all of the death benefit implied by full liquidity). During the accumulation phase, the contract holder has full access to the account value. After annuitization, the contract holder cannot withdraw account value in excess of that provided in monthly payments, and the death benefit available is either zero or limited in some way (e.g. paid only, as a continuation of payments throughout the certain period). Because of this loss of liquidity and reduced (or non-existent) death benefit, many contract holders wanting periodic income choose not to annuitize. Instead, they make systematic withdrawals from their annuity while maintaining it in its active, or accumulation, phase. Systematic withdrawal programs from active, unannuitized deferred annuity contracts are an alternative mechanism (i.e., an alternative to annuitization) for distributing retirement income to contract holders. While these programs provide full liquidity, that liquidity requires some tradeoffs. For example, if withdrawals are set at a specified dollar level, then these distributions can fully deplete the account value. In other words, the contract holder can outlive the retirement income provided by this method of systematic withdrawal. Alternatively, if withdrawals are set as a percent of account value, then the period of distribution may be extended indefinitely, but a meaningful level of monthly retirement income may not be achieved. For example, if the percentage chosen is too high, the bulk of the account value will be distributed in the early years, leaving a much smaller account value base against which the same percentage will be applied, resulting in inconsequential monthly retirement income payments. Systematic withdrawal programs may also be applied to mutual funds, which aside from differences in taxation and asset charges, are very similar to the accumulation phase of variable annuities. The '201 patent, Col. 3, l. 60, to Col. 4, l. 27. d. The Brief Summary Of The Invention The Brief Summary Of The Invention is somewhat more illuminating than the Abstract as to the nature of what is claimed in the '201 patent, perhaps in part because of the context provided by the Background Of The Invention. Unfortunately, the parties’ different impressions of what — or specifically, how many — inventions are described in the Brief Summary and the Detailed Description suggest that the illumination is less than brilliant. Because the court finds that the Brief Summary Of The Invention is helpful to understanding both what is later described in detail and what is ultimately claimed, the Brief Summary is quoted below, in its entirety. The court has placed in italics those portions of the Brief Summary that the court believes highlight principal aspects of the claimed invention. The first portion of the Brief Summary states the following: One aspect of the present invention provides an annuity based retirement program which utilizes a variable annuity product with a guaranteed minimum payment. Unlike existing products, however, the product of the present invention is administered by a process in which deficits (i.e., differences between the minimum payments and what would otherwise be the actual payments when actual payments fall below the mínimums) are repaid from future payments. The chart in FIG. 3 illustrates this aspect of the invention. FIG. 3 illustrates variable annuity payouts with a simple floor guarantee and a program administered by a method that funds current deficiencies (without interest) from future payments. Another aspect of the invention is the provision of alternative techniques (including a retrospective method and a prospective method) of implementing such a program. The '201 patent, Col. 4, ll. 31-45. Figure 3, to which this first portion of the Brief Summary refers, is shown below: Figure 3 The remainder of the Brief Summary describes further “aspects” of the invention, as follows: Another aspect of the present invention relates to distributions associated with withdrawal programs, including systematic tuithdrawal programs. More specifically, this aspect of the invention provides a method for administering a systematic withdrawal program in which the distribution program calls for a percentage.withdrawal, the dollar amount of which is allowed to vary as the account value varies due to withdrawals, fees and expenses, and appreciation. Another aspect of the present invention provides a combination of benefits superior to both annuitizations and systematic withdrawal programs (whether from deferred annuities or from mutual funds) by joining the two programs seamlessly so as to provide lifetime income annuities (or mutual fund programs) which maintain liquidity for the contract holder for as many years as the contract holder chooses. Upon commencement of the program, the contract holder may elect the number of years during which full liquidity is desired. For example, an owner age 65 may elect to retain contract liquidity for twenty years. Using an assumed interest rate (AIR) and other factors, an initial payment will be determined. The amount of this payment will change from period to period based on the same formula used in determining payment changes under a typical variable immediate annuity, or annuitization under a variable deferred annuity. At the end of twenty years, if the contract holder wants payments to continue on this basis and be guaranteed for life, then liquidity is given up and the account value is no longer available as a death benefit. The exchange of account value liquidity for payments guaranteed for life may be optional at or before the end of the liquidity period. The liquidity period may be changed at any time, or the contract holder may also continue the withdrawal program on some other basis, or may elect to surrender the contract for its account value. For mutual fund programs, the assets remaining in the mutual fund at the end of the liquidity period may, at the owner’s option, be transferred to an immediate variable annuity to complete the program. This aspect of the invention provides a type of systematic withdrawal program (which may be applied to either deferred annuities or to mutual funds) that converts at the end of a stated period (the liquidity period) to an annuity. The annuity chosen is assumed here to be a life annuity, but other forms of annuities might also be made available. Essentially, the value remaining in the account at the end of the liquidity period is used to purchase a life annuity that continues payments for the life of the annuitant. The program blends the withdrawal program with this annuitization in a seamless way. Payments, first as withdrawals and later as annuity payments, are adjusted each period to reflect actual net investment returns, in the same way that variable annuity payments are normally adjusted. Consequently, while payments under the life annuity portion of the program are guaranteed for the life of the annuitant, the amount of each payment is not guaranteed. This invention involves a unique administrative system that, among other things, customizes the liquidity period and the level of withdrawal to the particular owner. This aspect of the present invention differs in several ways from variable annuitizations that allow commutation of future payments, and which therefore provide some degree of “liquidity.” First, this program primarily applies to the accumulation period of the deferred annuity and does not require actual an-nuitization. Second, commutation of future payments requires demonstration of good health. Third, commutation may provide for less surrender value than the present invention provides, due to additional loads or charges applied at the time of commutation. Fourth, during its liquidity period, the present invention utilizes a “retrospective” approach in determining contract value while commutation programs utilize a prospective approach. Since initial and subsequent payments are higher with shorter liquidity periods, contract holders may decide for themselves the appropriate length of the liquidity period. Some my elect very short periods, such as five years. Others may elect very long periods, in effect maintaining complete access to their account values for the entirety of their lives. Even in the latter instance, contract holders enjoy advantages over conventional systematic withdrawal programs. In particular, the initial payment anticipates returning some portion of principal over the contract holder’s expected lifetime (the remaining portion being returned at death), while still guaranteeing that payments will be made regardless of how long the contract holder lives. Changes in payments from period to period are governed by the same formula as is used for life annuities and resulting payments are guaranteed for life. Certain embodiments of the present invention provide a data processing method and apparatus for the determination and administration of annuity payments that derive from the seamless combination of systematic withdrawals (from deferred annuities and/or mutual funds) and annuitization as indicated above and as will be described more fully below. The invention described is intended primarily to apply to variable annuities and mutual funds. Nonetheless, the invention can also be applied to fixed annuities. Other goals, advantages and novel features of the present invention will become apparent from the following detailed description of the invention when considered in conjunction with the accompanying drawing. The '201 patent, Col. 4, l. 31, to Col 6, l. 11 (emphasis added). This Brief Summary suggests that the invention has three primary “aspects”: (1) an annuity-based retirement program that utilizes a variable annuity product with a guaranteed minimum payment, but administered by a process in which deficits are repaid from future payments (i.e., an “annuitized” program), see id. at Col. 4, ll. 31-45; (2) a program involving distributions associated with withdrawal programs, including systematic withdrawal programs (•i.e., an “unannuitized” program permitting withdrawals before the contract is annunitized), see id. at Col. 4, ll. 46-54; and (3) a program joining or combining annuitization and systematic withdrawal programs “seamlessly” so as to provide lifetime income annuities which maintain liquidity for the contract holder for as many years as the contract holder chooses (i.e., a “combination” program, in which a systematic withdrawal program converts at the end of a stated liquidity period to an annuity), see id. at Col. 4, l. 55, to Col. 5, l. 65. In addition to these “aspects,” the Brief Summary indicates that certain embodiments of the invention provide a data processing method and apparatus for the determination and administration of the third, “combination” aspect. See id. at Col. 5, l. 66, to Col. 6, l. 4. In its claim construction brief, however, Lincoln contends that the '201 patent inventors “generally conceived two distinct methods to administer annuity products.” Lincoln’s Claim Construction Brief at 4 (emphasis added). Lincoln explains that the “first general method,” which Lincoln asserts is not covered by the patent claims at issue in its infringement counterclaim, “relates to a variable annuity product that is administered ‘by a process in which deficits (i.e., differences between minimum payments and what would otherwise be the actual payments when actual payments fall below the mínimums) are repaid from future payments.’ ” Id. (quoting the '201 patent, Brief Summary, Col. 4, ll. 30-38). Lincoln also explains that this “first general method” is “used in connection with an annuitized variable annuity — i.e., after account value has been exchanged for the promise of future payments.” Id. at 5 (citing the '201 patent, Brief Summary, Col. 4, ll. 31-45). Lincoln cites the same portion of the Brief Summary as describing its first aspect of the invention as the court cited, above, as the basis for the court’s belief that one aspect of the invention is an “annuitized” program. Therefore, the court concludes that Lincoln’s “first general method” corresponds to what the court described above as the “annuitized” program, or first aspect of the invention. The “second general method” identified by Lincoln, which Lincoln contends is the subject of this lawsuit, “relates to distributions associated with withdrawal programs from unannuitized variable annuity accounts.” Lincoln’s Claim Construction Brief at 5 (citing the '201 patent, Detailed Description, Col. 10, ll. 35-39, and Col. 11, ll. 4-11). It is not clear to the court, however, from Lincoln’s further explanation whether this “second general method” includes both the second aspect (the “unannuitized” program) and the third aspect (the “combined” program) identified by the court from the Brief Summary, or just the second aspect. Such confusion arises, because, in Lincoln’s explanation of the “second general method,” Lincoln cites sections of the Brief Summary and Detailed Description that describe both “un-annuitized” or “never annuitized” programs, such as the Detailed Description, Col. 10, ll. 35-55, and Col. 11, ll. 4-11, and sections that describe programs in which annuitization is “postponed” until after a “liquidity period” of some specified duration, such as in the Brief Summary, Col. 4, ll. 58-64, and Col. 5, ll. 56-62. Moreover, the sections of the Brief Summary that Lincoln points to as describing this “second general method” are those that the court has identified as describing a third “combination” program, while Lincoln never cites or explains what is described in the Brief Summary, Col. 4, ll. 46-54, which is the section that the court identified as describing the second, “unannuitized” program. The Transamerica Plaintiffs, like the court, assert that the '201 patent discloses “three distinct methods.” Markman Reply Brief By Transamerica Level Parties at 8. The Transamerica Plaintiffs identify the three methods as follows: (1) “[a] variable annuity benefit plan maintained in the post-annuitization period,” citing the '201 patent, Detailed Description, Col. 7, l. 1, to Col 10, l. 34, and Description of the Flow Charts, Col. 18, ll. 13-59; (2) “[a] distribution program associated with a withdrawal program that is ‘never annuitized,’ ” citing the '201 patent, Detailed Description, Col. 10, l. 35, to Col 12, l. 10; and (3) “[a] distribution program associated with a withdrawal program wherein the annuiti-zation of the contract is ‘postponed’ until the end of the ‘liquidity period,’ ” citing the '201 patent, Detailed Description, Col. 12, l. 11, to Col. 14, l. 21. Markman Reply Brief By Transamerica Level Parties at 8-9. These three “methods” identified by the Transamerica Plaintiffs appear to correspond, at least generally, to the three “aspects” identified by the court from the Brief Summary. The Transamerica Plaintiffs contend, however, that it is the first method that is covered by the patent claims at issue here, whereas Lincoln contends that it is the second method (or second and third methods) that is (or are) covered by the patent claims at issue here. The court will examine the Detailed Description and the claims in the patent to determine what aspects of the invention are covered by the patent claims at issue here, which may entail determining how many aspects or methods are described and claimed. For the moment, however, suffice it to say that the fundamental disagreement between the parties about what methods or inventions are disclosed and what methods or inventions are covered by the patent claims at issue in this case is reflected in a fundamental disagreement about the meanings of some of the disputed claim terms. e. The Detailed Description i. The description of a fírst method. The court turns, next, to the Detailed Description Of The Invention for further explanation of the invention or inventions disclosed in the '201 patent. The court and the parties apparently agree that the first section of the Detailed Description, Col. 7, l. 4, to Col. 10, l. 34, describes a program or programs for variable annuities that have, in fact, been “annuitized,” that is, a program that corresponds to the court’s first “aspect” of the invention, to Lincoln’s “first general method,” and to the Transamerica Plaintiffs’ “first method.” In part because Lincoln contends that this method is not covered by the pertinent claims at issue in this litigation, the court will summarize this section of the Detailed Description as briefly as it can. This portion of the Detailed Description illustrates approaches for administration of an annuity based program in which deficits are funded from future benefits in “other than the conventional manner,” using either a “retrospective” or a “prospective” formula. The “retrospective” formula is described from Col. 7, l. 37, to Col. 8, l. 18, but the court finds it unnecessary to quote that formula here. Instead, the court finds it appropriate to quote the portion of the Detailed Description describing distinguishing features of this “retrospective” formula: Under this retrospective approach, the determination of the benefit payment for each period differs from the typical approach previously described. The insurer guarantees that if the account value determined by the progression of values in the series shown above goes to zero, the insurer will commence making payments to the annuitant from its own funds. The table of FIG. 4 compares the normal variable benefit typically payable under an annuity contract to the benefit payable under a contract which incorporates the retrospective method of this example where the guaranteed minimum payment is equal to the initial payment. The total payments under the retrospective method exceed those under the normal benefit. The insurer pays all amounts after the account value is exhausted. The '201 patent, Col. 8, ll. 19-34. Figure 4, to which this section of the Detailed Description refers, is shown below: Figure 4 The Detailed Description describes an illustrative example for the “prospective” formula as another example of an approach to the administration of an annuity based program in “other than the conventional manner,” as follows: In this approach, a guaranteed minimum variable income benefit is established below which the benefit payment will not fall. However, in the event the benefit payment calculated without regard to the minimum falls below the minimum benefit payment guaranteed, a portion of the variable annuity benefit reserve held by the insurer will be liquidated in an amount sufficient to cover the shortfall. This will result in reduced benefits in the long term when performance of the funds might otherwise dictate a larger benefit payment. As mentioned, the series of variable annuity benefit payments traditionally has a lower bound of zero. There are a variety of ways in which a positive, nonzero lower bound can be introduced. It will be assumed here that the lower bound will be a function of the initial variable annuity benefit payment. In this example, the initial variable annuity benefit payment is $1,000 and all future variable annuity benefit payments will be assumed to be no less than 100% of the initial benefit. Alternative, but similar, methods and systems to support them may be used to facilitate the same objective of providing a guaranteed floor of periodic annuity income. For example, annuity payments immediately subsequent to the one(s) creating a shortfall could be reduced — but not below the guaranteed floor level of payment — until the cumulative shortfall had been made up. The present invention provides the computer-automated process to handle these variants. The table of FIG. 5 shows the reduction in units per payment under a program that guarantees a minimum payment of $1,500 and accounts for any shortfall by reducing the number of units used to calculate future benefit payments. The '201 patent, Col. 8, l. 39, to Col. 9, l. 3. Figure 5, to which this section of the Detailed Description refers, is shown below: Figure 5 The description of the first method continues with descriptions of “[o]ther variations of the system and method of the present invention,” which include “[n]on-level variable benefit floors,” and “[bjenefit floors in conjunction with benefit ceilings (‘collars’).” The '201 patent, Col. 9, l. 4, to Col. 10, l. 34. ii. The description of a second method. Accepting, at least for now, Lincoln’s contention that the claims at issue do not cover an “annuitized” program or programs, the court turns to the portion of the Detailed Description that Lincoln contends is covered by the pertinent claims of the patent. The parties appear to agree that a second method or program is described beginning at Col. 10, l. 35. Lincoln contends that this portion of the Detailed Description describes the “second general method” pertaining to unannuitized variable accounts, the Transamerica Plaintiffs contend that it describes the method for “never annuitized” accounts, and the court identifies it as describing an “uannuitized” program. This portion of the Detailed Description begins with the following description, in which references to annuitization or lack of annuitization have been italicized: In addition to distribution methods associated with true annuitizations, distributions associated with withdrawal programs — including systematic withdrawal programs — -from active (unan-nuitized ) deferred annuity contracts are also encompassed by this invention. For example, for a given attained age(s) and, where allowed, gender(s), an insurer may permit withdrawals from an active (unannuitized) deferred annuity contract. Under such a program, if these withdrawals do not exceed a predetermined percentage established by the insurer for a given withdrawal frequency, the insurer guarantees that withdrawals under this program will last for the period prescribed, including a lifetime period. As a hypothetical example, if a male age 60 withdraws 4.4% of the initial account value each year, such withdrawals are guaranteed to last a lifetime. (Initial account value is that account value at the time a systematic withdrawal program, inclusive of this guaranteed minimum benefit payment option, commences.) There is an explicit increment to the asset charge for those customers who opt to purchase this benefit. This distribution program contrasts with those shown earlier in two major ways. First, the variable annuity contract is never “annuitized.” Rather, a series of partial withdrawals is made from an active (unannuitized) deferred variable annuity contract. This means that, upon death of the contract owner, the account value is paid to the beneficiary. This contrasts with distribution methods associated with true annuitiza-tions, where the form of the annuity payout option chosen determines whether any residual value remains for a secondary annuitant or beneficiary. For example, under a variable annuity contract annuitized under a single life annuity option with no certain period or other refund option, the insurer’s obligation to the annuitant ceases upon death. No further payments, “account value,” or any other form of residual value flows to the beneficiary. Second, because the variable annuity contract is never annuitized under this distribution program, a lump sum or partial account value withdrawal capability still resides with the variable deferred annuity contract owner(s). However, withdrawals in excess of the amounts stated by the insurer to keep the guaranteed payout program in place may alter or may terminate the program. One variant of this distribution program calls for the percentage withdrawal allowed to be not just of the initial account value, but rather of the highest account value achieved on any policy anniversary following inception of the program, such account value necessarily recognizing all withdrawals and fees as well as appreciation. For example, suppose a male age 60 may withdraw 4.4% of the initial account value each year under this program and be guaranteed a lifetime income of that amount. Suppose the initial account value at inception of this program is $100,000. The contract owner withdraws $4,400, the maximum permitted. Favorable fund performance causes the account value to increase from $100,-000 — $4,400 = $95,600 to $110,000 as of the contract owner’s next policy anniversary when he has attained age 61. The account value against which the 4.4% withdrawal applies is then re-established as the “high-water mark” account value on any policy anniversary. Thus, he may now withdraw up to 4.4% of $110,000, or $4,840, each year and have the lifetime income guarantee program remain in place. If the account value subsequently decreases at all — even to zero — the $4,840 is guaranteed to be paid for life. The table in FIG. 6 illustrates the operation of this aspect of the invention. In the illustration of FIG. 6, the initial account value is $100,000, the withdrawal guarantee is 7.5% of the highest account value attained, the investment return is assumed to be as illustrated, and the term is 15 years. In addition to guaranteed income for specified periods including lifetime periods under systematic withdrawal pro-gramsi this invention also encompasses the integration of such income guarantees with death benefit guarantees. For example, such death benefit guarantees may promise that the contract owner will have returned to him or her a specified percentage (e.g., 0%-100%, inclusive) of either the initial account value or the “high-water mark” account value as of any subsequent policy anniversary. The '201 patent, Col. 10, l. 35, to Col. 11, l. 48 (emphasis added). Figure 6, to which this portion of the Detailed Description refers, is shown below. Withdrawal Number Account Value 80Y Withdrawal Amount Investment Return Account Value EOY 1 $100,000.00 $7,500.00 12% $103,600.00 2 $103,600.00 $7,770.00 16% $111,162.80 3 $111,162.80 $8,337.21 12% $115,164.66 4 $115,164.66 $8,637.35 -5% $101,200.95 5 $101,200.95 $8,637.35 -10% $83,307.24 6 $83,307.24 $8,637.35 -21% $58,989.21 7 $58,989.21 $8,637.35 5% $52,869.45 8 $52,869.45 $8,637.35 -14% $38,039.61 9 $38,039.61 $8,637.35 1% $29,696.28 10 $29,696.28 $8,637.35 -15% $17,900.09 11 $17,900.09 $8,637.35 -5% $8,799.61 12 $8,799.61 $8,637,35 15% $186.60 13 $186.60 $8,637.35 23% $0.00 14 $0.00 $8,637,35 10% $0.00 15 $0.00 $8,637.35 8% $0.00 iii. Is a third method described? As the italicized text in the quotation above indicates, the Detailed Description explains that the method described in Col. 10, l. 85, to Col. 11, £ 48, involves “uannui-tized” contracts or contracts that are “never annuitized.” In contrast, the remainder of the Detailed Description describes contracts that have both a “liquidity period” and an “annuity period” or “annui-tized” phase. Specifically, the first references to a “liquidity period,” and more particularly, to a method in which withdrawals and benefit payments continue from the “liquidity period” into the “annuity period,” appear in the section of the Detailed Description beginning at Col. 11, £ 49, immediately following the portion of the Detailed Description quoted above and identified by the parties and the court as describing a second method. The section of the Detailed Description beginning at Col. 11, £ 49, begins as follows: Under this approach, the initial withdrawal amount is adjusted in the same way variable annuity benefit payments subsequent to the initial payment are adjusted (see above), substituting “withdrawal” for “benefit” in the formulas. Such adjustment occurs during the liquidity period (chosen by the contract holder at the beginning of the program) and continues into the life annuity period to adjust the variable payments under that phase of the program also. Since the first adjustments are made during the liquidity period, the deferred annuity account value (or mutual fund account value) must be maintained as usual for deferred annuities (or mutual funds), with special adaptation for additional deposits and for withdrawals in excess of the calculated withdrawal amount.... The '201 patent, Col. 11, ll. 40-63 (emphasis added). The second paragraph quoted just above continues with the statement of a formula for the administration of the account value, assuming no additional deposits and no excess withdrawals. Id. at Col. 11, l. 63, to Col. 12, l. 10. The part of the Detailed Description quoted just above presents a quandary. The first paragraph, from Col. 11, ll. 49-56, states that it pertains to “this approach,” apparently meaning the one described in the preceding section, from Col. 10, l. 35, to Col. 11, l. 48. On the other hand, the paragraph at Col. 11, ll. 49-56, and the paragraphs that follow, including the second one quoted just above from Col. 11, ll. 57-64, refer to a “liquidity period” and a “life annuity period” and “postponement” of “annuitization” until the end of a “liquidity period,” which irreconcilably conflicts with the description from Col. 10, l. 35, to Col. 11, l. 48, of a method for contracts that are “never annuitized.” One way to resolve this irreconcilable conflict would be to read the section of the Detailed Description beginning at Col. 11, I. 49, as describing a different method from the “never annuitized” method described from Col. 10, l. 35, to Col. 11, l. 48, notwithstanding the reference to “this approach” in the paragraph beginning at Col. II, l. 49. Indeed, the Transameriea Plaintiffs contend that a different method from the “never annuitized” method is described in later parts of the Detailed Description, although they place the demarcation between a “second method” and a “third method” somewhat later than the court does, at Col. 12, l. 11. The Transameriea Plaintiffs’ demarcation is at least as problematic as the court’s, however, because at the demarcation point they identify, the Detailed Description describes how “[t]his withdrawal program,” that is, one apparently previously described, “contrasts with normal annuitization in two ways.” Id. at Col. 12, ll. 11-42. Thus, as with the court’s demarcation point, the Trans-america Plaintiffs’ demarcation point appears to be a continuation of the description of a prior method, not a description of a new method. This problem with the Transameriea Plaintiffs’ demarcation point is ameliorated if “this withdrawal program” is read to refer to a program that is described beginning at the court’s suggested demarcation point, Col. 11, l. 49. That solution, of course, still leaves the problems with the court’s demarcation point, which also begins with a confusing reference to “this approach,” suggesting that it is a continuation of the description of the prior method, not the beginning of a description of a different method. Although the court is tempted to throw up its hands and declare the Detailed Description hopelessly vague, because the precise demarcation point between a second and third method or program is not clear, what is clear is that the remainder of the Detailed Description, that is, the part beginning at Col. 11, l. 49, describes a “withdrawal program” with both a “liquidity period” or “unannuitized” period and a “life annuity period” or “annuitized” period, ie., a third, “combined” program. Indeed, the court finds that the Detailed Description describes how a “never annui-tized” plan can actually be “seamlessly” combined with an “annuitized” plan by postponing the annuitization of the plan until the end of the systematic withdrawal plan applicable to the “liquidity period” of the contract. This reading rationalizes, to some extent, the perception of the court and the Transameriea Plaintiffs that three aspects of the invention are disclosed with the contention of Lincoln that only two general methods are disclosed, because it is apparent that Lincoln’s second method includes the “seamless” combination of the first two methods identified by the court and the Transameriea Plaintiffs. Specifically, the Detailed Description explains that “[tjhis withdrawal program contrasts with normal annuitization in two ways.” The '201 patent, Col. 12, ll. 11-12. Those two ways are described as follows: First, the annuitization of the contract (or, in the case of a mutual fund, purchase of an annuity) is postponed until the end of the liquidity period (which may be the end of the mortality table, if so elected). Rather, a series of partial withdrawals in amounts specified by the program is made from an active (unan-nuitized ) deferred variable annuity contract (or mutual fund). This means that, upon death of the contract owner during the liquidity period, the account value is paid to the beneficiary. This contrasts with distribution methods associated with true annuitizations, where the form of the annuity payout option chosen governs whether any residual value remains for a secondary annuitant or beneficiary.... Second, because the annuitization of the variable annuity contract (or mutual fund) is postponed, a lump sum or partial account value withdrawal capability still resides with the owner(s) during the liquidity period. Additionally, the contract holder may elect to withdraw less than the allowable withdrawal amount; payments under a variable annuity payout do not offer this flexibility. The '201 patent, Col. 12, ll. 11-24, 36-42 (emphasis added). The court reiterates that, not only does this “combined” program purportedly contrast with a “normal annuitization” for the stated reasons, but the “postponement” of annuitization in this program contrasts with the second aspect of the invention described in Col. 10, l. 35, to Col. 11, l. 48, in which the variable annuity contract is “never annuitized.” See id. at Col. 11, ll. 4-5. The Detailed Description also explains, in some detail, the workings of this “combined” program, as follows: Under this approach (which applies equally well to joint ownership as to single ownership), the contract holder chooses a period during which systematic withdrawals will be taken and during which full account value liquidity is maintained. At the end of this period, the remaining account value is annui-tized according to standard annuity payout options. The insurance company determines the amount of the initial systematic withdrawal, based on the length of the period chosen, the age of the contract holder, and other factors. Using the assumed interest rate (AIR), the company calculates the initial withdrawal so that, if the AIR is realized over time, sufficient account value will be present at the end of the systematic withdrawal period to fund the annuiti-zation. FIG. 7 illustrates variable payments made during and after the liquidity period in a program of this type. FIG. 8 illustrates the cash surrender value and death benefits before and after annuitization for a program of this type. The '201 patent, Col. 12, ll. 43-59 (emphasis added). The two Figures referred to in this section of the Detailed Description are shown below. Figure 7 Figure 8 The Detailed Description then explains two methods to determine the amount of the initial withdrawal, see the '201 patent, Col. 12, l. 60, to Col. 13, l. 45, but the court finds it unnecessary to repeat those methods at this time. The court does find it useful, however, to point out that the Detailed Description explains that, under either method for determining the amount of the initial withdrawal quoted above, “the liquidity period can be extended to the end of the mortality table (for example, age 115); in such case, if the owner lives until that age, a life annuity is guaranteed, but by that age the financial risk to the insurer is de minimis.” Id. at Col. 13, ll. 46-50. Next, the Detailed Description explains that a contract holder can make additional deposits and withdrawals, as well as the necessary adjustments to the program that would be required if such additional deposits or withdrawals are actually made, as follows: The contract holder may make additional deposits and may make withdrawals in excess of the designated withdrawal amount, provided the end of the liquidity period has not yet been reached. In such instances, the withdrawal program must be adjusted. Adjustments are made by increasing or decreasing the current withdrawal amount by the same proportion as the amount of the new transaction (deposit or excess withdrawal) bears to the account value just prior to the transaction. For example, if the current account value is $50,000 and the current withdrawal amount is $1,500, an additional deposit of $5,000 increases the account value by 10% and the withdrawal amount is therefore increased by 10%. In the same example, an unscheduled withdrawal of $5,000 (which is therefore an excess withdrawal of $5,000) reduces the account value by 10% and the current withdrawal amount reduces by 10%. In the adjustments, the investment return for the period from the most recent scheduled withdrawal to the date of the new transaction may be reflected in the adjustment. The '201 patent, Col. 13, l. 51, to Col. 14, l. 2. Like the second “never annuitized” aspect of the invention, this third “combined” aspect of the invention can provide for a death benefit: This invention also encompasses the integration of this program with death benefit guarantees. For example, such death benefit guarantees may promise that the contract owner will have returned to him or her a specified percentage of either the initial deposit, the “high-water mark” account value as of any subsequent policy anniversary, deposits accumulated at a specified interest rate or rates, or other definitions of value. The '201 patent, Col. 14, ll. 3-10; and compare Col. 11, ll. 40-49 (describing death benefit guarantees under the “never annuitized” aspect of the invention, as quoted above, beginning on page 30). Finally, the Detailed Description explains a variation of the “combined” program, as follows: One variation of the invention, applicable to deferred annuities only, would substitute for the liqui