John B. Pegram Fish & Richardson P.C. New York “Divided” or “Joint” Infringement.

John B. PegramFish & Richardson P.C.

New York

“Divided” or “Joint” Infringement

Infringement of a patent.

35 U.S.C. 271(a)-(b):(a) [W]hoever without authority makes,

uses, … 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.

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The Terminology

“Joint infringement” used to describe infringement of an

entire method claim by persons acting jointlyMay be applicable if one person controls

the others“Divided Infringement”

used to describe infringement of a method claim when no single person infringes every claim limitation

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A Question of PrecedentPrecedent requires:

The Federal Circuit and District Courts to follow holdings of the Supreme Court

Federal Circuit panels (3 judges) and District Courts to follow earlier holdings of the Federal Circuit

Only a decision by the Supreme Court or Federal Circuit en banc (all active judges) can overrule earlier holdings of the Federal Circuit

The now-pending en banc appeals in the Akamai and McKesson cases may change the Divided/Joint Infringement Precedent

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Background• The current dispute is about method claims• The law is more clear regarding system

claims• A user, who only possesses one element

of the system can be an infringer if he “uses” the whole system• Decca Ltd. v. United States (Ct.Cl. 1976) • NTP, Inc. v. Research In Motion, Ltd.

(Fed. Cir. 2005)• Centillion Data Sys. v. Qwest

Communications, (Fed. Cir. 2011) • Persons infringe who “put the

invention into service, i.e., control the system as a whole and obtain benefit from it.”

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Specific Method Claim IssuesIs a method claim infringed when no single

person infringes every claim limitation?Current answer:

Yes, if one person directs or controls.No, if there is no control.

Should infringement be found when two or more persons collectively infringe all limitations of a method claim, but they independently infringe different limitations?Current answer: Only if one person

controlsShould the scope of method claim

infringement be broader?

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Policy Issues

Under what conditions should infringement be found when two or more unauthorized persons perform all steps of a method claim?

Should the result be different for similar claims written in method and system format?

Are the courts limited in finding joint or divided infringement of method claims by the specific language of the Patent Act?

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On Demand Machine Corp. v. Ingram Industries, Inc. (Fed. Cir. 2006)

The first case to speak of “joint” infringement

In passing (dicta), Judge Newman found no error in a jury instruction that said there could be joint infringement when parties had “combined action”

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BMC Resources, Inc. v. Paymentech, L.P., (Fed. Cir. 2007)• There must be “control” for joint

infringement• Does not say if the control must be legal

or can also be technological (e.g., where one server responds in a determined manner to a server run by a second infringer)

• Distinguishes On Demand as dicta that did not change the “settled law” • There was no “settled law”

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Muniauction, Inc. v. Thomson Corp. (Fed. Cir. 2008)• Clarified that there is joint infringement

when there is legal control of the respondeat superior variety

• Strongly suggested that technological control would not be enough.

Golden Hour Data v EMSCharts, (Fed. Cir. 2010)• Majority held there was no joint

infringement • Dissent (Newman) argues that there should

be joint infringement when the parties conspire to infringe

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Akamai Technologies, Inc. v. Limelight Networks, Inc. (Fed. Cir. 2010)• “there can only be joint infringement

when there is an agency relationship between the parties who perform the method steps or when one party is contractually obligated to the other to perform the steps.”

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Akamai panel (vacated)Patent claims a method for storing web

page content using mirrored servers (“Content Delivery Network” or “CDN).Requires “tagging” the usual URLs to

indicate that content is available via the CDN

Defendant Limelight performed all method steps except 1Customers “tagged” the URLs that they

wanted to be available via the CDN Federal Circuit panel found affirmed

judgment of no infringement in 201012

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Akamai panel (vacated)Held: there can only be joint infringement if

there is an agency relationship between the parties who perform the method steps or when one party is contractually obliged to the other to perform the steps.Akamai did not prove that Limelight’s

customers were performing the claimed method steps as agents for Limelight.

Akamai did not prove thatLimelight’s customers were contractually obligated to perform the tagging steps.

Inducing infringement is not an issue in Akamai

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Suggestions by the Panel in Akamai

Proper claim drafting“A patentee can usually structure a

claim to capture infringement by a single party.” See also BMC.

Correct the claims by reissueBut, no damages would be available until

reissue patent is granted

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McKesson panel (vacated)Patent claims a method for doctor-patient

communication and record-keepingThe claim requires the patient to initiate

the access to the provider for information Defendant Epic licensed the accused

software to healthcare providers, who offered a similar service to their patients

The District Court granted summary judgment of noninfringement and a Federal Circuit panel affirmed 2:1 No single party was a direct infringerNo liability for inducing because there

was no underlying direct infringement

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McKesson panel (vacated)Cites BMC, Muniauction and Akamai as

precedent, requiring:Agency relationship between the parties

performing the method steps; orContractual obligation of one party to the

other party to perform the step; In other words, control

The fact that health care providers “encouraged” patients to initiate communication with the software was not “control” of the patients

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McKesson panel (vacated)Judge Bryson, concurring, suggested the

possibility of en banc review of the correctness of BMC, Muniauction and Akamai (the precedential cases).

Judge Newman dissentedShe questioned the rule that a “single

entity” must infringe for another party to be liable for induced infringement

She questioned whether BMC, Muniauction and Akamai were precedent, in light of earlier Federal Circuit decisions not requiring agency or a contractual relationship

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En banc ReviewIn April-May 2011, the Federal Circuit

vacated the panel decisions in Akamai and McKesson, and ordered an en banc review of each. The question on review in Akamai is:“If separate entities each perform

separate steps of a method claim, under what circumstances would that

claim be directly infringed and to what extent would each of the

parties be liable?”

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En banc ReviewThe two questions in McKesson are:

“If separate entities each perform separate steps of a method claim, under what circumstances, if any, would

either entity or any third party be liable for inducing infringement or for contributory infringement? 

Does the nature of the relationship between the relevant actors—e.g., service provider/user; doctor/patient—affect the question of direct or indirect infringement liability?

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The EndThank you

John B. PegramFish & Richardson P.C.

New York

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Citations to Cases Decca Ltd. v. United States, 210 Ct.Cl. 546, 544 F.2d

1070 (1976), NTP, Inc. v. Research In Motion, Ltd., 418 F.3d 1282

(Fed. Cir. 2005). On Demand Machine Corp. v. Ingram Industries, Inc.,

442 F.3d 1331 (Fed. Cir. 2006). BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d

1373 (Fed. Cir. 2007). Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318

(Fed. Cir. 2008). Golden Hour Data v EMSCharts, 614 F.3d 1367 (Fed.

Cir. 2010). Akamai Technologies, Inc. v. Limelight Networks, Inc.,

629 F.3d 1311 (Fed. Cir. 2010), vacated April 20, 2011). McKesson Technologies Inc. v. Epic Systems Corp.,

2011 U.S. App. LEXIS 7531 (Fed. Cir. 2011), vacated May 26, 2011). Centillion Data Sys. v. Qwest Comm’ns, 631 F.3d 1279

(Fed. Cir. 2011)

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