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Infringement of Method Claim Shouldn’t Require a Single Entity

Written by AIPLA
Posted: Apr. 6, 2014 @ 10:30 am
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EDITORIAL NOTE: What follows is the Summary of the Argument from the AIPLA amicus brief in Limelight Networks, Inc. v. Akamai Technologies, Inc. The brief is filed by Wayne P. Sobon, who is the current President of the AIPLA, with Jeffrey I.D. Lewis listed as Counsel of Record. Lewis is himself a former AIPLA President. Also on the brief with Lewis is Scott B. Howard.

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The cornerstone of Petitioner’s argument is that it follows from the language and simple structure of Sections 271(a) and 271(b) of Title 35 “that § 271(b) proscribes conduct that induces actionable direct infringement of a patent as described in § 271(a).” Pet. Br. at 1 (emphasis added). In doing so, Petitioner focuses on the elements of a claim for induced infringement under 35 U.S.C. § 271(b), but hides the true issues of this case – what is the meaning of “infringement” and is there patent liability when someone causes all of the steps of a method patent to be performed but no single entity performs all of the steps of the method claim by him or herself?

Recent Federal Circuit law has, without any statutory basis, limited infringement under Section 271(a) to the actions of a single entity, and some amici have even mistakenly characterized the single entity rule as settled law, e.g., Brief of Amici Curiae Cargill, Inc. et al. at 4 (but it is not, as shown below and in district court cases in the accompanying footnote [2] ). It is that erroneous limitation that leads to confusion over whether or not direct infringement is necessary for a finding of indirect, induced infringement.

AIPLA believes that the so-called “single entity” rule for deciding method claim infringement under 35 U.S.C. § 271(a), where multiple actors perform the claim steps, as set out in recent Federal Circuit panel decisions [3] as well as in the instant case, is based both on an incorrect construction of Section 271(a) and of the statutory structure of Section 271 as a whole. In concluding that only principles of agency law determine the ambit of such infringement liability, the Federal Circuit has mistakenly strayed from the traditional tort law basis of patent infringement and has created loopholes for method claim infringement that drastically reduce the exclusive rights conferred by validly issued patents – it has, in effect, reduced the scope of method patents until they have little relevancy.

Section 271 generally, and Section 271(a) in particular, must be construed to allow for infringement of a method claim by more than one entity – in doing so, however, AIPLA suggests it also is fair and appropriate to separate participation in infringement from actual liability. Specifically, the Court should clarify that infringement occurs when actions representing all the claimed elements are present, without regard to the number of actors. But, identifying the party or parties responsible for that harm, i.e. those who may be held liable and subject to paying damages, should be separately assessed under traditional principles of tort law liability for joint tortfeasors, especially as developed in the case law both before and after the 1952 Patent Act.

As the panel decisions in Muniauction and BMC set out, it is inequitable to let the party(ies) who masterminded the infringement avoid responsibility, and they should be liable for damages, whether or not the mastermind conducted any infringing step. However, those who practice a claimed method step without substantive comprehension of the overall method being practiced should not be liable, e.g., for damages. (For instance, the mere user of a website who fills in a database or follows instructions should not ordinarily be liable for infringement even if that was a claimed method step, whereas those who ran the website or provided the instructions could be subject to liability.[4] )

Infringement of a method claim under Section 271(a) requires that every step be performed, but it does not require that every step of the claimed method be performed by a single entity or person. That is clear from both the actual language of Section 271(a) and the statutory structure of 271 as a whole.

At the textual level, the subject of Section 271(a) is “whoever.” Congress set forth in 1 U.S.C. § 1 that singular terms include plurals unless the context indicates otherwise, e.g., “a single person,” and therefore Section 271(a) applies to one or more persons. [5] There is nothing in the context or history of Section 271(a) that indicates Congress intended to limit Section 271(a) to “single entities” and immunizing joint tortfeasors. While proof of infringement requires evidence that all steps of a method claim are performed, nothing in the language of Section 271(a) requires they be done by a single entity. Moreover, the legislative history and overall statutory structure of Section 271 indicate that Congress wrote the direct infringement provision of Section 271(a) very broadly, but went into more detail in the subsequent paragraphs on indirect infringement.

Having established that infringement exists when all steps are performed even by multiple actors, there is the separate question of liability for the principal director of the actions, i.e. the “mastermind”. Such liability should not require a formal agency relationship between a principal and other actors (as the Federal Circuit posits, carving out a special patent rule for patent tortfeasors). Instead, Section 271(a) liability should be based on a traditional joint tortfeasor analysis by showing that the liable party(ies) (1) performed at least one claimed step, and (2) substantially participated in producing the performance of the method steps (e.g., by the others involved). See Restatement of Torts §§ 875 cmt. c and 834 cmt. d (must show substantial participation to establish liability). Thus, liability should attach only to each named defendant who has had (a) some involvement in performing the claim steps, and (b) a substantial involvement in causing the infringing harm. This balances both the interests of patent owners and the unsuspecting public in accordance with traditional tort law.

This Section 271(a) analysis for direct infringement, however, is distinguishable from induced or contributory infringement under Sections 271(b) and (c); for those two indirect infringement categories a party may be held liable without personally practicing any of the steps of the claim. See, e.g., Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. __, 131 S. Ct. 2060 (2011) (as to Section 271(b) induced infringement), and Dawson Chem. Co. v. Rohm & Haas Co., 448 U.S. 176 (1980) (as to Section 271(c) contributory infringement). Accordingly, AIPLA’s position does not risk undermining the statutory structure that distinguishes direct from indirect infringement.

Direct infringement should not be limited only to an agency-type relationship between parties who perform the method steps or to a contractual obligation to another to perform the steps, and that liability for that infringement should attach to the principal director of the infringing actions. The law of direct patent infringement under 35 U.S.C. § 271(a) should conform to the traditional tort law basis for liability, without an alternate standard for patent infringement. Once direct infringement, properly understood, has been found under Section 271(a), whether a party is liable for indirect infringement can then be correctly assessed.

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[2] Consider, for instance, pre-Federal Circuit cases like Mobil Oil Corp. v. W.R. Grace & Co., 367 F. Supp. 207, 253 (D. Conn. 1973), where the district court found that defendant liable for infringement of several patent claims related to catalyst preparation where the defendant’s customers performed several of the claimed steps. See Ralston Purina Co. v. Far-Mar-Co., Inc., 586 F. Supp. 1176, 1226 (D. Kan. 1984) (“It is well settled that a party cannot avoid infringement merely by having a third party practice one or more of the required steps”); E. I du Pont de Nemours & Co. v. Monsanto Co., 903 F. Supp. 680, 735 (D. Del. 1995), aff’d, 1996 U.S. App. LEXIS 17512 (Fed. Cir. July 17, 1996) (The “cases establish that a party cannot avoid liability for infringement by having someone else perform one or more of the steps of a patented process for them.”).

[3] Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008); BMC Res., Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007); Cross Med. Products, Inc. v. Medtronic Sofamor Danek, Inc., 424 F.3d 1293 (Fed. Cir. 2005); see Akamai Technologies, Inc. v. Limelight Networks, Inc., 629 F.3d 1311 (Fed. Cir. 2010), vacated for en banc review, 2011 U.S. App. LEXIS 17130 (Fed. Cir. Aug. 10, 2011) (“Akamai I”).

[4] For instance, the district court in Applied Interact, LLC v. Vermont Teddy Bear Co., No. 04 Civ. 8713 (HB), 2005 U.S. Dist. Lexis 19070 (S.D.N.Y. Sept. 6, 2005), at *16-17, set out that because customers perform the claimed steps “in accordance with [defendant’s] instructions,” that was sufficient to show a “connection” between the defendant and the customers to deny defendant’s judgment motion.

[5] “In determining the meaning of any Act of Congress, unless the context indicates otherwise— words importing the singular include and apply to several persons, parties, or things; words importing the plural include the singular; … the words “person” and “whoever” include corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals; … ” 1 U.S.C. § 1 (emphasis added).


About AIPLA

Founded in 1897, AIPLA is a national bar association constituted primarily of lawyers in private and corporate practice, in government service, and in the academic community. AIPLA represents a wide and diverse spectrum of individuals, companies and institutions involved directly or indirectly in the practice of patent, trademark, copyright, trade secret, and unfair competition law, as well as other fields of law affecting intellectual property. Our members represent both owners and users of intellectual property.


12 comments
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  1. Gene,

    Looks like the AIPLA is taking up Judge Newman’s cry in her partial concurrence/dissent in Akamai-McKesson.

  2. Re: “Section 271(a) liability should be based on a traditional joint tortfeasor analysis.”
    I wonder how well the consequences for this surprising AIPLA suggestion for an extreme change in the law* [even "direct" infringement by plural independent actor performing or supplying only parts of a claim] has been thought through by the proponents?
    “Said “traditional joint tortfeasor analysis” [which would be necessary to apportion damages between the different independent partial contributors to the infringement] varies widely between different states. It would present difficult new and undeveloped legal issues, plus added difficult fact-finding decisions, which could considerably add to the cost and complexity of patent litigation, and add to the already considerable difficulty in obtaining earlier and lower cost patent suit resolutions against patent owners and PAEs.

    *Far more sweeping than the far more limited CAFC decision issue which the Supremes already took cert on, and aptly described by one leading analyst as a “Hail Mary Pass.”

  3. Paul,

    While I favor the position being taken by the AIPLA (and consistent with Judge Newman’s cry in her partial concurrence/dissent in Akamai-McKesson), SCOTUS precedent (most notably Deepsouth Packing v. Laitram and AT&T v. Microsoft) is not favorable. The primary argument for why “single actor” may no longer be required under 271(a) is a subtle one: the enactment of 271(f) which doesn’t even require a completed act of infringement to be actionable (see Federal Circuit’s Waymark decision which correctly interprets this aspect of 271(f)), as well as the addition of the “offer for sale” language to 271(a). Unfortunately, such subtle arguments generally fall on “deaf ears” with Our Judicial Mount Olympus in the patent law area.

  4. Not requiring a completed act….

    Compelling stuff, EG.

  5. Is there anything in the brief that limits its application to the few spectacular divided infringement cases it addresses.
    Otherwise, the proposed rule (liability should attach only to those with (a) some involvement in performing the claim steps, and (b) a substantial involvement in causing the infringing harm) provides a tool to attack end-users and insignificant participants, in troll-like fashion. Though the rule pretends to insulate end-users, whether they have “substantial involvement” will be a jury question. Many small businesses using software or hardware provided by substantial corporations will be exposed to patent litigation, and the burden of proving that they are not “substantially involved” may be even greater than proving non-infringement. What might now be considered a frivolous case will be legitimized.
    I’ll give an example: Monsanto gets a claim to a method of making bread, starting with planting from GMO wheat, harvesting the wheat, grinding the wheat into flour, and making bread with the flour. If I buy the flour from the grocery store and make bread, I may have had substantial involvement. The bread is the whole point of the invention, and without my involvement, there is no bread. Do I present my case to the jury, or settle with Monsanto? Does the local bakery fight or settle? It won’t take long before patentees figure out that this is a potent weapon, but it will take decades to turn it around.

  6. K David Crockett,

    Can you explain why end users who violate the law should be excused from that violation?

  7. Yes. But your challenge is screwy. I am not suggesting that end users be excused from violating the law. I am suggesting that changing the law to ensnare end users is a bad idea.
    I provided an example, close to real life. If someone is clever enough to get my bread making claim issued, do you think the guy who buys flour at the grocery store and makes bread is violating the law?

  8. K David Crockett,

    You quite miss the point that no change in law is required. Patent infringement has always included use – by anybody.

    Thank you for confirming that you have no real clue as to what you are talking about.

  9. A traditional joint tortfeasor analysis requires a finding that the parties alleged to infringe acted in concert. Plural parties acting independently of one another by definition are not joint tortfeasors.

  10. @8 Anon: Ouch. Wouldn’t think I could elicit such an angry response while discussing patent law.
    Infringement of method claims did not include performance of recited steps by uncoordinated entities until Akamai. That is not “always.”.
    But the AIPLA brief, which is the subject of this article, suggests that end-users should be liable under circumstances that require a jury to determine. For that, the law must change,and that is the point of the AIPLA brief.
    But I was really interested in any suggestion in the AIPLA brief to limit the application of its proposed rule to avoid application against people/companies that buy a product off the shelf for its intended purpose and end up performing the last recited step of a method claim.
    It’s something like the 271(g) problem: if you (Anon) buy a cellphone made in China under an infringing method, then you (Anon) are an infringer subject to suit. It happens. Changing the law re method claims to cover more end-users just seems like a bad idea.

  11. K David Crockett,

    I had indicated use (in my end user rant) – not partial use.

  12. @11: But the AIPLA brief, which is the topic of the post, suggests liability for “partial use.” The AIPLA is proposing liability for any one who “(1) performed at least one claimed step….” In my bread making example, the guy who plants the wheat, the guy who harvests the wheat, the guy that mills the wheat into flour, and the guy who makes the bread are all utterly independent, yet under the AIPLA proposal, each would need a jury decision to escape liability. Each may be part of the unsuspecting public. But because direct infringement is a strict liability tort, liability attaches even though none has any knowledge of the patent, and no intent to infringe the patent, or even if they takes steps to avoid infringement. For example, if the bread maker strictly avoids GMO foods and only buys wheat labeled GMO-free, he is still liable if any of the upstream defendants inadvertently or intentionally included some GMO into the chain.
    Of course, if the claim consists of steps all accomplished by the end-user, the end-user would be liable for direct infringement.