Sec. 271(a) (Direct) Multi-Actor (Divided; Joint) Infringement - Klarquist Patent DefensesKlarquist Patent Defenses

Second Actor’s Action Attributed To First Actor If (1) Second Actor Agent Of, Or Under Contractual Obligation To, Or In Joint Enterprise With, First Actor, Or (2) First Actor Conditions Participation In An Activity Or Receipt Of A Benefit Upon Second Actor’s Action And Establishes The Manner Or Timing Of That Action: “The single-entity rule”: “Direct infringement under § 271(a) occurs where all steps of a claimed method are performed by or attributable to a single entity…. Section 271(a) is not limited solely to principal-agent relationships, contractual arrangements, and joint enterprise [as the vacated panel and other panels held.] Rather, to determine direct infringement, we consider whether all method steps can be attributed to a single entity.” Akamai Tech. IV (Fed. Cir. 08/13/15) (en banc) (per curiam) (rev’g JMOL of no infringement ivo “substantial evidence demonstrating that Limelight conditions its customers’ use of its content delivery network upon its customers’ performance of the tagging and serving steps, and that Limelight establishes the manner or timing of its customers’ performance”). A party is liable for another’s performance of method step if (1) “it acts through an agent (applying traditional agency principles),” (2) it “contracts with another to perform one or more steps of a claimed method,” (3) “the actors form a joint enterprise,” or (4) it “conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance;” which are questions of fact. Id. (applying general principles of vicarious liability, and citing Grokster (U.S. 06/27/2005) (copyright case; dictum: “a vicarious liability theory… allows imposition of liability when the defendant profits directly from the infringement and has a right and ability to supervise the direct infringer, even if the defendant initially lacks knowledge of the infringement”; one “infringes vicariously by profiting from direct infringement while declining to exercise a right to stop or limit it”)) (rev’g Akamai Tech. III (Fed. Cir. 05/13/15) (2-1) (Sec. 271(a) “includes only the principles of vicarious liability, as embodied in the single entity rule,” not common law “joint tortfeasor” liability as urged by dissent). “A joint enterprise requires proof of four elements: (1) an agreement, express or implied, among the members of the group; (2) a common purpose to be carried out by the group; (3) a community of pecuniary interest in that purpose, among the members; and (4) an equal right to a voice in the direction of the enterprise, which gives an equal right of control.” Akamai Tech. IV (Fed. Cir. 08/13/15) (en banc) (per curiam) (citing Restatement (Second) of Torts § 491 cmt. C). See Travel Sentry II (Fed. Cir. 12/19/17) (vacating Summ. J. of no direct infringement; discussing at length Akamai en banc decision); Lyda (Fed. Cir. 09/30/16) (aff’g dismissal under Iqbal / Twombly: “A claim of joint infringement thus requires pleading facts sufficient to allow a reasonable inference that all steps of the claimed method are performed and either (1) one party exercises the requisite ‘direction or control’ over the others’ performance or (2) the actors form a joint enterprise such that performance of every step is attributable to the controlling party.”); Mankes (Fed. Cir. 04/22/16) (vacating judgment on pleadings on divided infringement ivo Akamai Tech. IV changing standard); IBM (Booking Holdings) (Fed. Cir. 05/22/19) (non-precedential) (aff’g Summ. J. no divided infringement where claims require a step of storing information in cache at user’s station, that storing is performed by “the user, or the device, or the browser’s manufacturer,” despite defendant’s app. including a cache directive requesting such caching step be performed; where plaintiff waived the “benefit test” argument and presented no other legal theory).
Conditioning Use Of Service On Performance Of A Step And Establishing Manner Or Timing Of That Performance: Conditioning use: Under service contract: “if Limelight’s customers wish to use Limelight’s product, they must tag and serve content.” Establishing Manner/Timing: “Limelight’s customers do not merely take Limelight’s guidance and act independently on their own.” Limelight assists customers in the installation and initialization by supplying customer-specific information and engineering, technical assistance, and installation guidelines. Akamai Tech. IV (Fed. Cir. 08/13/15) (en banc); Nalco (Fed. Cir. 02/27/18) (rev’g trial court dismissal of divided infringement complaint under Iqbal / Twombly; “because the facility performing the test, and therein allegedly using the method described in the ’692 patent, was directed to do so by Defendants.”); Travel Sentry II (Fed. Cir. 12/19/17) (vacating Summ. J. of no direct infringement; jury may find that TSA looking for special logo on luggage and then opening it with special master key defendant provided (w/ training), is attributed to defendant provider of special logo and locks on luggage, based on “evidence that a third party hoping to obtain access to certain benefits can only do so if it performs certain steps identified by the defendant, and does so under the terms prescribed by the defendant,” and here “TSA only receives something of value from Travel Sentry when it performs these claim steps.” Long discussion of Akamai. Mastermind theory is no longer governing law.); Eli Lilly (Fed. Cir. 01/12/17) (aff’g inducement by pharmaceutical companies (through their proposed labels) of multi-actor infringement; patients’ self-administration of folic acid (one of the method’s steps) is attributable to physician who performs remaining steps and directs patients to perform this important step, and conditions treatment on this step, and prescribes amount to take and how often); Medgraph (Fed. Cir. 12/13/16) (aff’g Summ. J. of no inducement because no multi-actor direct infringement where use of system not conditioned on doctors or patients performing all steps of claimed method). Benefits received by second actor may be intangible. Travel Sentry II (Fed. Cir. 12/19/17) (promotion of public perception of TSA).
- Pre-Akamai Tech. IV Cases: See Muniauction (Fed. Cir. 07/14/08) (“where the actions of multiple parties combine to perform every step of a claimed method, the claim is directly infringed only if one party exercises ‘control or direction’ over the entire process such that every step is attributable to the controlling party, i.e., the ‘mastermind.’” None of these questions is “relevant” to whether party controlling the action system controls claim step taken by the bidder: “Consider whether the parties are acting jointly or together in relation to the electronic auction process. Are they aware of each other’s existence and interacting with each other in relation to the electronic auction process? Is there one party teaching, instructing, or facilitating the other party’s participation in the electronic auction process?”); BMC Resources (Fed. Cir. 09/20/07) (“the standard requiring control or direction for a finding of joint infringement may in some circumstances allow parties to enter into arms-length agreements to avoid infringement.”); Move (Fed. Cir. 03/04/13) (user performs claim step of selecting area on map; although uses web site, the web site operator does not control those selections, so no divided direct infringement); Aristocrat Tech. (Fed. Cir. 03/13/13) (aff’g Summ. J. of no direct joint infringement; player of gambling machine not agent of the casino operator providing the machine, but vacating judgment of no induced infringement). Travel Sentry I (Fed. Cir. 11/05/12) (aff’g Summ. J. of no direct infringement because no direction or control as to two steps of the method) (non-precedential, but remanding for determination of indirect infringement); McKesson Tech. (Fed. Cir. 04/12/11) (2-1) (No direct infringement where patients perform one step of (client-server) claim otherwise performed by doctor; actions of patients were voluntary and cannot “be said to represent the vicarious actions of their doctors.” Joint tortfeasor liability is covered by Sec. 271(b), (c) so court should not expand reach of Sec. 271(a) under common law “joint tortfeasor” principles. Also, unlike other torts, patentee can define the boundaries of his or her exclusive rights.); Golden Hour (Fed. Cir. 08/09/10) (no multi-actor infringement of method claims or system claims where “two companies formed a strategic partnership, enabled their two programs to work together, and collaborated to sell the two programs as a unit,” because insufficient evidence of control or direction of one company by the other.) (Overruled to extent inconsistent with Akamai Tech. IV (Fed. Cir. 08/13/15) (en banc)).
Divided (Multi-Actor) Infringement Theory May Not Be Needed: “This is not a situation where a method claim specifies performance of a step by a third party, or in which a third party actually performs some of the designated steps, and thus control or direction of the performance of that step by the accused infringer is required.” SiRF Tech. (Fed. Cir. 04/12/10).
Unclear If May Be Divided (Multi-Actor) Infringement Of Non-Method Claims: Panels divided. Compare Akamai Tech. III (Fed. Cir. 05/13/15) (2-1) (apparatus claims do not raise issue of divided infringement because “whoever combines the last element of an apparatus necessarily, individually, ‘makes’ the invention. Thus, in the case of an apparatus claim, there is always a single entity directly infringing the patent.”), vacated Akamai Tech. IV (Fed. Cir. 08/13/15) (en banc), with Centillion Data (Fed. Cir. 01/20/11) (providing software and technical assistance to customers does not make customer and service provider vicariously liable for “use” or “make” direct infringement of system claim) and Golden Hour (Fed. Cir. 08/09/10) (applying BMC principles to a “system” claim (“A computerized integrated data management system comprising … first module … second module …”), with no acknowledgement that those prior cases had dealt with method claims) (overruled to extent inconsistent with Akamai Tech. IV (Fed. Cir. 08/13/15) (en banc)). See Lyda (Fed. Cir. 09/30/16) (“Our cases have applied joint infringement to method claims and not system claims,” but treating claim as method claim because recites same steps as method claims, despite preamble referring to “system”).
- Note: But this line of cases does not answer the subsidiary question (see above discussion of SiRF Tech. (Fed. Cir. 04/12/10)) of who performs a step achieved by a machine (e.g., a computer being used by an end-user, running instructions written by a software vendor, on a processor made by a hardware vendor).