What relationship is required for two or more parties to be found liable for patent infringement under a divided infringement or joint infringement theory of liability? The standard of review so far enunciated by the Courts is that one party must be the “mastermind” exercising “control or direction over the entire process of the method or the process claimed by the patent in order to be liable. In effect divided infringement appears to me to be a combination of Direct and Vicarious infringement. If two unrelated parties ( or at least, not directly related such that one would have vicarious liability over the other)entities each perform certain steps of a patented method then neither can be held liable or considered to have infringed the patent. Some Case Analysis In BMC Resources v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007), the Court of Appeals for the Federal Circuit considered the standard for patent infringement when no one entity performs all of the steps in the allegedly-infringed process. It started by restating the basic principle that “[I]nfringement requires, as it always has, a showing that a defendant has practiced each and every element of the claimed invention.” Id., at 1380 (citing 35 U.S.C. §271(a)). In addition, indirect infringement “requires a finding of direct infringement.” Id. In cases where there was no showing that any defendant performed all of the steps, such as where a manufacturer performs the first step and the customer performs the rest, a claim of direct infringement can not be found. BMC Resources v Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007), Id at 1380, 1381. Paymentech does not imply that to become immune to claims of patent infringement, all a party needs to do is to contract out part of a process. “In those cases,” the Federal Circuit wrote, “the party in control would be liable for direct infringement. It would be unfair indeed for the mastermind in such situations to escape liability.” BMC, 498 F.3d at 1381. Before reaching the question of “direction or control,” the Federal Circuit has determined whether direct infringement can be found. For example, in SiRF Tech., Inc., v. Int’l Trade Comm., 601 F.3d 1319 (Fed. Cir. 2010). In that SiRF, an asserted claim required (1) “receiving satellite [signals] at a first location,” (2) “communicat[ing] the satellite [signals] to a mobile GPS receiver at a second location,” and (3) processing signals at the mobile GPS receiver. Id., at 1329. The defendant argued that the “communicating” step requires third party transmission, and thus the defendant did not practice the claimed step. The Federal Circuit held that the “communicating” step encompassed direct or indirect communication, and therefore the accused system practiced the claimed step. Id., at 1330. The court analogized: “ if a claim for a method of making a telephone call included the limitation: ‘placing a telephone call to a telephone at a second location,’ the fact that the call must first be routed through a switched telephone network, and then eventually to the eventual recipient, would not prevent this claim limitation from being satisfied.
1 JamesSaikin, Managing Director, LeaderInsight, LLC, as of January 3, 2011.
The next inquiry focuses on the meaning of “control or direction”: How much “control or direction” would a party need to exercise in order to be considered liable under a divided infringement theory? In Muniauction Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008), the court stated that “the control or direction standard is satisfied in situations where the law would traditionally hold the accused direct infringer vicariously liable for the acts committed by another party that are required to complete performance of a claimed method.” Id., at 1330. “That Thomson controls access to its system and instructs bidders on its use is not sufficient to incur liability for direct infringement.” Id., at 1328. More recently the Court in Akamai Technologies, Inc. v. Limelight Networks, Inc., No. 20091372 (Fed. Cir., December 21, 2010) (emphasis added). The court in Akamai found that, as in Muniauction, “customers are provided instructions on use of the [accused] service and are required to perform some steps of the claimed method to take advantage of that service.” Akamai, at 15. Further the Court has held That the defendant’s customers decided if, and to what extent, the accused steps should be performed, and thus exercised independent discretion and control. Id., at 16-17. The court ruled that there was no infringement because the plaintiff “did not show that [the defendant’s] customers were acting as agents of or were contractually obligated to [defendant] when performing the [accused steps].” Id., at 18.
2 JamesSaikin, Managing Director, LeaderInsight, LLC, as of January 3, 2011.
Published on Jan 3, 2011
Divided or Joint Infringement is an issue when litigating patents. However, it is advisable to address the issue when the patent is being wr...