divided patent infringement and inducement: protecting ip rights
TRANSCRIPT
Divided Patent Infringement
and Inducement: Protecting IP Rights Strategies for Drafting and Prosecuting Claims and Allocating Liability
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TUESDAY, OCTOBER 30, 2012
Presenting a live 90-minute webinar with interactive Q&A
Thomas L. Irving, Partner, Finnegan Henderson Farabow Garrett & Dunner, Washington, D.C.
Brian A. Tollefson, Member, Rothwell Figg Ernst & Manbeck, Washington, D.C.
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FOR LIVE EVENT ONLY
Divided Infringement – Allocation of Liability & Litigation Issues
© 2012 Rothwell Figg
October 30, 2012
Presented by Brian Tollefson
© 2012 Rothwell Figg 5
I. Introduction – The Law Before Akamai en banc
A. Direct Joint Infringement
B. Indirect Induced Infringement
II. Court Treatment
A. Akamai and McKesson Federal Circuit en banc decision Aug. 31, 2012
B. Centillion Data Systems and Uniloc USA
C. Post-Akamai cases
III. Strategies for Protecting IP Rights
A. Patent Prosecution
B. Patent Claim Drafting Considerations
C. Assessing Risk of Partnerships to Allocate Potential Liability
D. Litigation Issues
October 29, 2012
I. Introduction – The Law Before Akamai en banc
A. Direct Joint Infringement
B. Indirect Induced Infringement
II. Court Treatment
A. Akamai and McKesson Federal Circuit en banc decision Aug. 31, 2012
B. Centillion Data Systems and Uniloc USA
C. Post-Akamai cases
III. Strategies for Protecting IP Rights
A. Patent Prosecution
B. Patent Claim Drafting Considerations
C. Assessing Risk of Partnerships to Allocate Potential Liability
D. Litigation Issues
October 29, 2012 © 2012 Rothwell Figg 6
Divided Infringement
• Also called “split infringement” or “joint infringement”
• Combined actions of multiple parties (as compared with single party satisfying all elements of the claim)
• A method for indicating channel quality comprising:
receiving a signal; (step performed in the mobile station by subscriber)
computing a channel quality indicator (CQI) value …; (step performed in the mobile station by subscriber)
transmitting the CQI value; (step performed in the mobile station by subscriber)
receiving the CQI value …. (step performed in a base station by service provider/network operator)
October 29, 2012 © 2012 Rothwell Figg 7
Divided Infringement
• 35 U.S.C. § 271(a) – “Direct Infringement”
– Patent is infringed by one who “without authority
makes, uses, offers to sell, or sells … [the] patented
invention, within the United States, or imports into the
United States … [the] patented invention during the
term of the patent therefore ….”
• 35 U.S.C. § 271(b) – “Induced Infringement”
– “Whoever actively induces infringement of a patent
shall be liable as an infringer.”
October 29, 2012 © 2012 Rothwell Figg 8
Divided Infringement
• Direct patent infringement generally requires a single actor to
practice every element of a patent claim.
• Indirect infringement, (i.e. contributory and induced
infringement), also required a showing of underlying direct
infringement.
– Akamai en banc holds that the direct infringement underlying
induced infringement does not require a single actor.
• While most patent claims can be infringed by making, using,
selling, or offering to sell the patented device, method claims
can only be infringed by using the patented method. » NTP, Inc. v. Research In Motion, Ltd., 418 F.3d 1282, 1317-18
(Fed. Cir. 2005).
October 29, 2012 © 2012 Rothwell Figg 9
Important Federal Circuit Cases
• On Demand Machine Corp. v. Ingram Industries, Inc., 442 F.3d 1331 (Fed. Cir. 2006)
• BMC Resources v. Paymentech, 498 F.3d 1373, 1381 (Fed. Cir. 2007)
• Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008)
• Golden Hour Data Sys. v. emsCharts, Inc., 614 F.3d 1367 (Fed. Cir. 2010)
• Centillion Data Systems, LLC. v Qwest Communications International, Inc., 631 F.3d 1279 (Fed. Cir. 2011).
• SiRF Technology, Inc. v. International Trade Commission, 601 F.3d 1319 (Fed. Cir. 2010)
October 29, 2012 © 2012 Rothwell Figg 10
Divided Infringement – On Demand
• CAFC (J. Newman) endorsed, as an accurate statement
of the law, a jury instruction that read:
– “It is not necessary for the acts that constitute
infringement to be performed by one person or entity.
When infringement results from the participation and
combined action(s) of more than one person or entity,
they are all joint infringers and jointly liable for patent
infringement. Infringement of a patented process or
method cannot be avoided by having another perform
one step of the process or method.”
October 29, 2012 © 2012 Rothwell Figg 11
Divided Infringement – BMC Resources
• Overruled in-part by Akamai en banc
• The parties conceded that the accused infringer did not perform all the steps of the claims. At issue was the proper standard for proving direct infringement under a joint infringement theory.
• CAFC (J. Rader) held that, “the law imposes vicarious liability on a party for the acts of another in circumstances showing that the liable party controlled the conduct of the acting party.”
• Defined proper standard as “direction and control.”
• “A party cannot avoid infringement, however, simply by contracting out steps of a patented process to another entity. In those cases, the party in control would be liable for direct infringement. It would be unfair indeed for the mastermind in such situations to escape liability.”
October 29, 2012 © 2012 Rothwell Figg 12
Divided Infringement - Muniauction
• Not (explicitly) overruled by Akamai en banc
• Joint Infringement Theory: Claims directed to electronic methods for
conducting original issuer auctions of financial instruments; “inputting
step” performed by bidder, other steps performed by issuer, the
relationship of parties should constitute direct infringement.
• CAFC (J. Gajarsa), applying BMC and not On Demand, held that for
combined actions of multiple parties, where no single party performs
each step:
– Infringement only if one party exercises “control or direction” over the
entire process such that every step is attributable to the controlling party.
– “Control or direction” standard satisfied where direct infringer would be
held “vicariously liable” for acts committed by another party that are
required to complete performance of the claimed method.
October 29, 2012 © 2012 Rothwell Figg 13
Divided Infringement - Golden Hour
• Accused infringers formed a strategic partnership, enabling their programs to work together and sold the programs as one product.
• District Court (ED Tex.) granted JMOL for both system and method claims, holding that one party must control details of the independent contractor work: – Independent contractor cannot perform the work as it chooses
– Evidence insufficient to show that Agreement imposed duties or responsibilities granting direction or control, and Agreement did not create agency, partnership or joint venture
– Party did not relinquish control over how its program was written, only gave the right to provide the program.
– Defendant was not accused of being the mastermind.
• CAFC (J. Dyk) affirmed joint infringement requirements with regard to both method and system claims.
October 29, 2012 © 2012 Rothwell Figg 14
According to Golden Hour, What is NOT Joint Infringement
“Making information available to the [other] party,
prompting the [other] party,
instructing the [other] party, or
facilitating or arrange for the [other] party’s
involvement in the alleged infringement is not
sufficient [to find direction of control].”
October 29, 2012 © 2012 Rothwell Figg 15
Divided Infringement – Centillion
• Patent claiming an electronic billing system comprising four elements, three elements on a “back end” system maintained by service provider and fourth element on a “front-end” system maintained by an end user.
• In Qwest’s systems, end users may (but do not have to) use a feature employing technology that Centillion contended is the fourth, front-end element, while service providers’ systems allegedly practice the first three elements.
• District Court (SD Ind.) held Defendant Qwest did not practice the end-user element and did not exercise direction or control over end users creating liability for vicarious infringement.
• CAFC (J. Moore) held “control” to require only the ability to put a system as a whole into service, not physical or direct control over all elements and held the location of “use” is where the system is put into service and the beneficial use of the system is obtained.
• Remanded to determine indirect infringement.
October 29, 2012 © 2012 Rothwell Figg 16
• Claims for GPS system requiring receiving satellite data, communicating and/or extracting data, and processing data at remote receiver.
• CAFC (J. Dyk) found that no joint infringement theory is necessary because SiRF performed all the steps of the method claims. – Found that SiRF’s argument related to unclaimed
steps (i.e., the user’s activity) was irrelevant.
– Found that SiRF’s software and devices dictated the performance of the claimed steps.
Divided Infringement – SiRF
October 29, 2012 © 2012 Rothwell Figg 17
Who is performing a step?
• This is often the most important issue
• “The use of a claimed system under section 271(a) is the place at which the system as a whole is put into service, i.e., the place where control of the system is exercised and beneficial use of the system obtained.” NTP, Inc. v. Research In Motion, Ltd.
• For a method step, it is often an issue of claim construction (e.g., “enabling,” “displaying,” etc.)
October 29, 2012 © 2012 Rothwell Figg 18
Summary
• Previously, BMC, Muniauction, Golden Hour, Akamai line of cases appeared to have solidly established the standard of an agency relationship for evaluating divided infringement.
• Still, divided infringement does not always have to be proved:
– “Use” can be established with system claims (Centillion)
– Performance of some steps may be performed indirectly (SiRF)
• Akamai en banc decision steers clear of direct infringement.
October 29, 2012 © 2012 Rothwell Figg 19
I. Introduction – The Law Before Akamai en banc
A. Direct Joint Infringement
B. Indirect Induced Infringement
II. Court Treatment
A. Akamai and McKesson Federal Circuit en banc decision Aug. 31, 2012
B. Centillion Data Systems and Uniloc USA
C. Post-Akamai cases
III. Strategies for Protecting IP Rights
A. Patent Prosecution
B. Patent Claim Drafting Considerations
C. Assessing Risk of Partnerships to Allocate Potential Liability
D. Litigation Issues
October 29, 2012 © 2012 Rothwell Figg 20
Allocating Liability Risks in Partnership
• Joint Infringement
– Direction and Control is still the standard
• Law of Inducement has changed
– (1) knew of the patent;
– (2) induced performance of the steps of the
method; and
– (3) those steps were actually performed.
October 29, 2012 © 2012 Rothwell Figg 21
Allocating Liability Risks in Partnership
• Considerations
– Whether to perform a search
• Clear products first?
• Knowledge of patents versus opinion defense.
– Operate independently / arms length transactions
• Opinions of Counsel
– Non-Infringement & Invalidity positions
– Willful infringement considerations
October 29, 2012 © 2012 Rothwell Figg 22
Allocating Liability Risks: Strategies
• Strategy 1 – Perform a coordinated
clearance search – Primary goal: avoid infringement.
– Caution: Maintain an Arm’s Length Relationship.
• Limit detail of coordination
– A coordinated clearance search can be evidence of
no intent to infringe, but can it be contorted to appear
as evidence of acting in concert to infringe?
October 29, 2012 © 2012 Rothwell Figg 23
Allocating Liability Risks: Strategies
• Strategy 2 – Operate independently – Parties share the same goal, but don’t discuss how to
reach that goal.
– Perform independent clearance searches and each
party ensures that they don’t practice all elements of
any claim identified in the searches.
– “We need to get from A to C. We will get from A to B
and not tell you how. You get from B to C and don’t
tell us how.”
October 29, 2012 © 2012 Rothwell Figg 24
Allocating Liability Risks: Strategies
• Strategy 3 – Avoid Knowledge of Patents
– Without knowledge, there is no specific intent
to infringe.
– Once you are sued, you have notice and
knowledge. • Then perform an analysis for validity and infringement.
• Stop activity once aware, but this does not avoid the strict
liability of direct infringement.
– “Willful Blindness” concern of Global-Tech.
October 29, 2012 © 2012 Rothwell Figg 25
Allocating Liability Risks in Partnership
• Language in Akamai en banc – “The party who actually participates in performing the
infringing method is, if anything, more culpable than
one who does not perform any steps.”
» Maj. Op. at p. 17 (emphasis added)
– Thus, a party that induces infringement only provides
a system or method may be treated less harshly than
one who performs claimed elements of a method.
October 29, 2012 © 2012 Rothwell Figg 26
Allocating Liability Risks: Opinions of Counsel
• New in the AIA, 35 U.S.C. § 298 Advice of counsel:
– The failure of an infringer to obtain the advice of counsel with
respect to any allegedly infringed patent, or the failure of the
infringer to present such advice to the court or jury, may not be
used to prove that the accused infringer willfully infringed the
patent or that the infringer intended to induce infringement of the
patent.
– i.e. Not getting an opinion cannot be used as a negative
inference for willfulness or inducement at trial.
• Thus, conversely, the affirmative obtaining of advice of
counsel should be evidence to prove the accused
infringer did not intend to induce infringement.
October 29, 2012 © 2012 Rothwell Figg 27
Allocating Liability Risks: Opinions of Counsel
• Value of a Non-Infringement Opinion
– If knowledge is specific intent to induce acts
that constitute patent infringement, then a
good faith belief of non-infringement of the
claims should provide a defense by
eliminating the knowledge requirement.
– Willful Infringement Considerations
October 29, 2012 © 2012 Rothwell Figg 28
Allocating Liability Risks: Opinions of Counsel
• Value of an Invalidity Opinion – An invalid claim cannot be infringed.
• Viskase Corp. v. American Nat'l Can Co., 261 F.3d 1316, 1323 (Fed.
Cir. 2001)
• Richdel, Inc. v. Sunspool Corp., 714 F.2d 1573, 1580 (Fed. Cir.
1983)
– Then, similarly, a good faith belief of invalidity of
claims should provide a defense by eliminating the
knowledge requirement.
• One should remain wary of producing
opinions and the related risks of discovery.
October 29, 2012 © 2012 Rothwell Figg 29
Litigation Strategies
• Direct Infringement
– Pleading Joint Infringement
– Motions to Dismiss Joint Infringement
• Induced Infringement
– Pleading Induced Infringement
– Motions to Dismiss Induced Infringement
• Early Motions for Summary Judgment
October 29, 2012 © 2012 Rothwell Figg 30
Litigation – Pleading Joint Infringement
• Make sure the Complaint fits Form 18.
– In re Bill of Lading, 681 F.3d 1323 (Fed. Cir. 2012)
• Joint Infringement liability will attach if the accused
infringer directs or controls other actors to perform those
steps that the primary actor does not himself perform.
– Plead that “one party exercises ‘control or direction’ over the
entire process such that every step is attributable to the
controlling party, i.e., the ‘mastermind’.”
– Again note that Muniacution was not explicitly overruled by
Akamai en banc.
– This issue as discussed in BMC Resources was not under
review in Akamai en banc.
October 29, 2012 © 2012 Rothwell Figg 31
Litigation – Pleading Joint Infringement
• Plead that each and every element is practiced.
– A single entity practicing each and every element is
now the simple case, if it exists.
• As needed, in order to account for each and every element: – Evaluate if “use” of system claims can be established
as in Centillion.
– Evaluate if performance of some steps are performed indirectly but still attributable to a direct infringer as in SiRF.
October 29, 2012 © 2012 Rothwell Figg 32
Litigation – Early Motions to Dismiss
• Motions to Dismiss Extend the Pleadings – Increase cost to Plaintiff.
– Defendant does not have to Answer immediately.
• More time to prepare a response.
• Timing can be advantageous in some jurisdictions, e.g. N.D. Ill.
where patent disclosure is keyed on the Final Pleading and not
the Rule 26(f) conference.
– More time to discuss settlement.
– More time to seek transfer of venue.
– More opportunity to pursue post-grant procedures, such
as inter partes review.
October 29, 2012 © 2012 Rothwell Figg 33
Litigation – Motions to Dismiss Joint Infringement Claims
• Does the Complaint fit Form 18?
• Challenge that the Plaintiff does not allege that
one party exercises ‘control or direction’ over the
entire process such that every step is attributable
to the controlling party, i.e., the ‘mastermind.
• Challenge that performance of each and every
element has not been pled.
– Can you distinguish from Centillion or SiRF?
October 29, 2012 © 2012 Rothwell Figg 34
Litigation – Pleading Induced Infringement
• Twombly/Iqbal regime requires that a plaintiff
plead, “sufficient factual matter, accepted as
true, to state a claim that is plausible on its face.”
– More than mere formulaic recitation of elements and
conclusory legal statements.
• Plead that each and every element is practiced.
– Induced infringement effectively requires an
underlying direct infringement, but not a direct
infringer.
– J. Newman’s dissent in Akamai en banc points out the
inconsistency of this concept.
October 29, 2012 © 2012 Rothwell Figg 35
Litigation – Pleading Induced Infringement
• Knowledge, Inducement, & Actual Performance:
– Plead that the accused infringer acted with knowledge
that the induced acts constituted patent infringement. • See Akamai en banc, Maj. Op. at 14., citing Global-Tech v. SEB,
131 S.Ct. 2060 (2011).
– Evidence of inducement should be more than a bare
allegation. • Example situations of inducement are provided by Akamai
(Dependant Limelight performing at least 1 step) and McKesson
(Defendant Epic not performing any step, but providing a system).
– Again, each and every element of a claim must be
practiced.
October 29, 2012 © 2012 Rothwell Figg 36
Litigation – Pleading Induced Infringement
• Properly plead Direct Infringement first, then add
Indirect Infringement pleadings later.
– Avoid motions to dismiss thin indirect infringement
pleadings.
– Potentially receive further information in responses to
support indirect infringement claims.
• If a party is inducing infringement, almost by
definition that action is willful (or can be
construed as such to a jury), so seek treble
damages for willful infringement.
October 29, 2012 © 2012 Rothwell Figg 37
Litigation – Motions to Dismiss Induced Infringement Claims
• Attack the Knowledge prong.
– Assert that defendant did not know the induced acts
constituted patent infringement.
• More than mere knowledge or notice of the patent.
• Opinions of Counsel can provide protection here.
– If the Defendant did not know of the patent before the
lawsuit, then there could be no specific intent to induce.
• Moving forward, the Defense of the Case may provide cover.
• Challenge whether there is actual performance.
October 29, 2012 © 2012 Rothwell Figg 38
Litigation – Early Motion for Summary Judgment
• Generally, convince the Judge that the present
case is appropriate for SJ.
– Simplify the case, provide one claim that needs to be
construed, and only for narrow application.
• Is there any uncontroverted evidence that no
one party performs all elements, and that there
is no direction or control?
– Then file for SJ regarding any direct infringement
claims.
October 29, 2012 © 2012 Rothwell Figg 39
Post-Akamai en banc Cases
• Technology Patents LLC v. T-Mobile (UK) LTD., No.
2011-1581 (Fed. Cir. Oct. 17, 2012) – Claims only require action by originating actor using system, thus infringement
should be decided under Centillion and does not touch divided infringement of
Akamai en banc.
• Aeritas, LLC v. Alaska Air Group, Inc., Civ. No. 11-967-
SLR (D. Del. Sept. 28, 2012) – Follows Muniauction regarding joint infringement “control or direction” standard,
held that Plaintiff did not satisfy Twombly-Iqbal pleading requirements.
• Centillion v. Qwest, Civ. No. 04-0073-LJM-DKL (S.D. Ind.
October 15, 2012). – Construction of claims found no direct infringement, thus also no indirect
infringement, and mens rea of defendant was not addressed.
October 29, 2012 © 2012 Rothwell Figg 40
These materials are public information and have been prepared solely
for educational and entertainment purposes to contribute to the
understanding of U.S. intellectual property law. These materials
reflect only the personal views of the presenters and are not
individualized legal advice and do not reflect the views of FINNEGAN
or ROTHWELL. It is understood that each case is fact-specific, and
that the appropriate solution in any case will vary. Therefore, these
materials may or may not be relevant to any particular situation.
Thus, FINNEGAN, ROTHWELL, and the presenters cannot be bound
either philosophically or as representatives of their various present
and future clients to the comments expressed in these materials. The
presentation of these materials does not establish any form of
attorney-client relationship with FINNEGAN, ROTHWELL, or the
presenters. While every attempt was made to insure that these
materials are accurate, errors or omissions may be contained therein,
for which any liability is disclaimed.
42
DISCLAIMER
DIVIDED INFRINGEMENT:
COURT TREATMENT
43
Presented by
Tom Irving
A REMINDER…
44
35 U.S.C. 271
a) Except as otherwise provided in this title, whoever without authority
makes, uses, offers to sell, or sells any patented invention, within the
United States, or imports into the United States any patented invention
during the term of the patent therefor, infringes the patent.
b) Whoever actively induces infringement of a patent shall be liable as an
infringer.
c) Whoever offers to sell or sells within the United States or imports into
the United States a component of a patented [invention] constituting a
material part of the invention, knowing the same to be especially made
or especially adapted for use in an infringement of such patent, and
not a staple article or commodity of commerce suitable for substantial
noninfringing use, shall be liable as a contributory infringer.
Akamai Technologies, Inc. v. Limelight Networks, Inc.
and McKesson Technologies, Inc. v. Epic Systems
Corp., 692 F.3d 1301 (Fed. Cir. 2012)(en banc)
6-5
Majority opinion filed per curiam
Majority: RADER, LOURIE, BRYSON, MOORE, REYNA, WALLACH
Dissenting opinion filed by Judge NEWMAN.
Dissenting opinion filed by Judge LINN, in which Judges
DYK, PROST, and O’MALLEY join.
45
Joint Infringement
45
Akamai: Competitor performed part of claimed method and
competitor’s customers completed it.
Claimed method: placing content on a set of replicated servers and
modifying the content.
Limelight’s accused process places some content on its servers, and
then instructs its customers on the steps needed to modify.
McKesson: Competitor did not perform any part of claimed
method; multiple customers of competitor completed steps, but
none performed all steps.
Claimed method of communication between healthcare providers and
their patients.
Steps of the patent are divided between patients, who initiate
communications using the competitor’s software, and healthcare
providers, who perform the remainder of the steps.
46
Joint Infringement
46
Akamai and McKesson (con’t)
Questions:
Whether a defendant may be held liable for induced
infringement if the defendant has performed some of the
steps of a claimed method and has induced other parties
to commit the remaining steps (as in Akamai)?
Whether a defendant may be held liable for induced
infringement if the defendant has induced other parties
to collectively perform all the steps of the claimed
method, but no single party has performed all of the
steps itself (as in McKesson)?
47
Joint Infringement
47
Akamai and McKesson (con’t)
Majority
“Recent precedents of this court have interpreted section
271(b) to mean that unless the accused infringer directs or
controls the actions of the party or parties that are
performing the claimed steps, the patentee has no remedy,
even though the patentee’s rights are plainly being violated
by the actors’ joint conduct. We now conclude that this
interpretation of section 271(b) is wrong as a matter of
statutory construction, precedent, and sound patent
policy.”
“Nothing in the text indicates that the term “infringement” in
section 271(b) is limited to “infringement” by a single entity.”
48
Previous Interpretation of
§271(b) is Wrong
48
Akamai and McKesson (con’t)
Majority
“In doing so, we reconsider and overrule the 2007 decision of
[BMC Resources] in which we held that in order for a party to
be liable for induced infringement, some other single entity
must be liable for direct infringement. …To be clear, we hold
that all the steps of a claimed method must be performed in
order to find induced infringement, but that it is not
necessary to prove that all the steps were committed by a
single entity.”
“If an entity has induced conduct that infringes a patent,
there is no justification for immunizing the inducer from
liability simply because no single party commits all of the
components of the appropriative act.”
49
BMC Overruled
49
Akamai and McKesson (con’t)
Majority:
“Because the reasoning of our decision today is not
predicated on the doctrine of direct infringement,
we have no occasion at this time to revisit any of
those principles regarding the law of divided
infringement as it applies to liability for direct
infringement under 35 U.S.C. § 271(a).”
50
Decide Don’t Have to Decide
Divided Infringement
50
Akamai and McKesson outcomes
Both cases reversed and remanded.
McKesson: “Epic can be held liable for inducing infringement if it
can be shown that (1) it knew of McKesson’s patent, (2) it induced
the performance of the steps of the method claimed in the patent,
and (3) those steps were performed.”
Akamai: “Limelight would be liable for inducing infringement if the
patentee could show that (1) Limelight knew of Akamai’s patent, (2)
it performed all but one of the steps of the method claimed in the
patent, (3) it induced the content providers to perform the final
step of the claimed method, and (4) the content providers in fact
performed that final step.”
51
Reversed and Remanded
51
Akamai and McKesson, Judge LINN, dissenting
“The majority’s approach is contrary to both the Patent Act and to the Supreme
Court’s longstanding precedent that “if there is no direct infringement of a
patent there can be no contributory infringement.”
“The majority opinion is rooted in its conception of what Congress ought to
have done rather than what it did.”
“direct infringement is required to support infringement under § 271(b) or §
271(c) and properly exists only where one party performs each and every claim
limitation or is vicariously liable for the acts of others in completing any steps
of a method claim, such as when one party directs or controls another in a
principal-agent relationship or like contractual relationship, or participates in a
joint enterprise to practice each and every limitation of the claim.”
Would affirm non-infringement in both Akamai and McKesson.
52
LINN Dissent
52
Akamai and McKesson, Judge NEWMAN, dissenting
“A scant majority” made “dramatic changes in the law of
infringement.”
New: “only an inducer can be liable for divided infringement, on loose
criteria for inducement”
No requirement for direct infringement.
“a significant minority of the en banc court continues to favor the
‘single-entity rule,’ whereby divided infringement is not actionable at
all unless all of the participants are in a contract or agency relationship
that is directed or controlled by a single ‘mastermind.’”
“The only issue for which these cases were taken en banc, the only
issue on which briefing was solicited from the parties and amici curiae,
was the conflict in precedent arising from the single-entity rule of BMC
Resources and Muniauction.”
53
NEWMAN Dissent
53
Direct Infringement By Single Party
Triggering Operation Of A Claimed System
Centillion Data Sys., L.L.C. v. Qwest
Commc'ns Int'l, Inc., 631 F.3d 1279 (Fed. Cir.
2011), reh’g denied (April 25, 2011)
DC: summary judgment of no infringement
because, under NTP and BMC, no single party
either practiced all of the limitations of the
asserted claims or controlled another party
doing so.
54
Direct Infringement By Single Party
Triggering Operation Of A Claimed System
Centillion (con’t)
FC: Vacate and remand
“By causing the system as a whole to perform this processing and obtaining
the benefit of the result, the customer has “used” the system under
§271(a). It makes no difference that the back-end processing is physically
possessed by Qwest. The customer is a single “user” of the system and
because there is a single user, there is no need for the vicarious liability
analysis from BMC or Cross Medical.”
Qwest not vicariously liable because does not control customers’ use.
the user of a system who triggers operation of that system is an infringer of
a claim to that system even though some elements of the system are
performed by different parties.
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No Infringement By Single Party
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Centillion, on remand
2012 WL 4505851
No direct infringement by Qwest
No direct infringement by customer
No indirect infringement by Qwest
Joint Tortfeasors?
May Depend on Claim Construction
• SiRF Technology, Inc. v. International Trade Com'n,
601 F.3d 1319 (Fed. Cir. 2010)
• Claim: A method of receiving global positioning system (GPS)
satellite signals comprising: receiving satellite ephemeris at a
first location; communication [sic] the satellite ephemeris to a
mobile GPS receiver at a second location; and processing
satellite signals ….
• Infringed only when actions are taken by SiRF's customers and
by the end users of the GPS devices?
• Commission: joint infringement.
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Joint Tortfeasors?
May Depend on Claim Construction
• SiRF (con’t)
• Federal Circuit: SiRF directly infringes because SiRF performs all steps of the claim.
• no steps required by customers or end users.
• method can be performed and are performed by a single party – “Neither the claim language nor the patent specification requires that the communication/ transmission be direct.”
• “under this construction it is clear that SiRF performs the step of communicating/ transmitting the files to the end users' devices because SiRF initiates the process of transmitting and communicating, and the files are actually transmitted to the end users.”
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Joint Tortfeasors?
May Depend on Claim Construction
• SiRF (con’t)
• FC (con’t)
• although “communicati[ng]” or ‘transmittin[g]” “can only
occur if the customer forwards the data to the end user and
the end user downloads the data. … the actions of
“forwarding” or “downloading” are not required by the claims,
and, therefore, the fact that other parties perform these
actions does not preclude a finding of direct infringement.”
• “When properly construed, it is clear that SiRF infringes
…Once the GPS receiver is enabled and ready to process the
data, only SiRF's actions are involved in “processing” or
“representing” the data.”
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DIVIDED INFRINGEMENT:
STRATEGIES FOR
PROTECTING IP RIGHTS
60
Patent Claim Drafting
Considerations
Consider who will infringe the claims and how
infringement will be proven.
Try to draft claims that will be directly and
literally infringed by competitors.
Try to draft claims that will be directly and
literally infringed by one actor.
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Patent Claim Drafting
Considerations
Consider where infringement will occur to
avoid extra-territoriality.
Try to draft claims that will be directly and
literally infringed in the U.S. by competitors.
Try to draft claims that will be directly and
literally infringed in the U.S. by one actor.
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Examples
• SIRF did it right: avoid overly limitative language.
• Claim: A method of receiving global positioning system
(GPS) satellite signals comprising: receiving satellite
ephemeris at a first location; communication [sic] the
satellite ephemeris to a mobile GPS receiver at a second
location; and processing satellite signals ….
• “Neither the claim language nor the patent
specification requires that the communication/
transmission be direct.”
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Examples
• SIRF (con’t)
• although “communicati[ng]” or ‘transmittin[g]”
“can only occur if the customer forwards the data
to the end user and the end user downloads the
data. … the actions of “forwarding” or
“downloading” are not required by the claims, and,
therefore, the fact that other parties perform these
actions does not preclude a finding of direct
infringement.”
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Examples
Per Centillion, draft system claims
The user of a system who triggers operation
of that system is an infringer of a claim to
that system even though some elements of
the system are performed by different
parties.
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Examples
Akamai Claimed method: placing content on a
set of replicated servers and modifying the
content.
Systems approach:
A system comprising a set of replicated servers,
wherein the content thereof is capable of being
modified ?????
Remember Centillion: user of a system who
triggers operation of the system is an infringer
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Examples
McKesson Claimed method: Claimed method of
communication between healthcare providers and their
patients.
Steps of the patent are divided between patients, who
initiate communications using the competitor’s
software, and healthcare providers, who perform the
remainder of the steps.
So, how about: A communication system comprising
software that allows for communication between
healthcare providers and their patients ?????
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Examples
A method comprising reacting A with B to form
C and then reacting C with D to form E.
What if A with B to form C is performed in
Italy?
Does 35 USC §271(g) apply?
68
Examples
[w]hoever without authority imports into the United
States or offers to sell, sells or uses within the
United States a product which is made by a process
patented in the United States shall be liable as an
infringer, if the importation, offer to sell, sale, or
use of the product occurs during the term of such
process patent. . . . A product which is made by a
patented process will, for purposes of this title, not
be considered to be so made after—
1. it is materially changed by subsequent processes; or
2. it becomes a trivial and nonessential component of
another product.
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Examples
Consider:
A method for reacting D with C to form E, with
production of C being enabled in the specification.
A method for reacting A with B to form C, with
subsequent production of E being enabled in the
specification.
A method of forming E or C, with appropriate
enablement in the specification.
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Patent Prosecution
Make efforts to maintain originally drafted
claims meeting goals of previous slides.
Make efforts to present new and amended
claims meeting goals of previous slides and
having written description support.
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