I NDIRECT AND D IRECT I NFRINGEMENT A FTER A KAMAI 9 th Annual
Advanced Patent Litigation Course July 26, 2013 Presented by Casey
L. Griffith
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I NDIRECT I NFRINGEMENT
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Whoever actively induces infringement of a patent shall be
liable as an infringer. Not a strict liability tort. Requires
knowledge of patent the alleged infringer must knowingly induce
infringement and possess specific intent to encourage anothers
infringement. Does not require proof of agency or direction and
control. Requires a finding of direct infringement first (pre
Akamai). I NDUCED I NFRINGEMENT 35 U.S.C. 271(b)
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Significance of relying upon inducing infringement theory of
liability: Knowledge of patent often only occurs after suit filed
(or notice letter sent). Induced infringement is not a strict
liability tort. Liability for induced infringement therefore can
only arise after accused infringer becomes aware of patent. So,
effectively, damages for induced infringement often only accrue
with filing of suit. Direct infringer may be liable for six years
prior to suit. I NDUCED I NFRINGEMENT 35 U.S.C. 271(b)
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Liability for induced infringement required findings of both:
1. Inducement of direct infringement and 2. Direct infringement was
committed by a single actor. Made imposing liability for
infringement of method patents extraordinarily difficult where no
single entity practiced each of the steps of the claimed method. P
RE -A KAMAI - T HE S INGLE -E NTITY R ULE M ETHOD C LAIMS
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Same general rule as method claims, i.e., liability for induced
infringement required findings of both inducement of direct
infringement and direct infringement was committed by a single
actor. But requisite direct infringement in context of inducing
infringement of system claims may be easier to prove. For example,
direct infringement may arise out of controlling system as a whole
and obtaining benefit from it. P RE -A KAMAI - S INGLE -E NTITY R
ULE WITH A T WIST S YSTEM C LAIMS
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In Akamai Techs., Inc. v. Limelight Networks, Inc., 692 F.3d
1301 (Fed. Cir. 2012) (en banc), the Federal Circuit held an
alleged infringer may be liable for induced infringement of a
method patent if: (1) The defendant has performed some of the steps
of a claimed method and has induced other parties to commit the
remaining steps; or (2) The defendant has induced other parties to
collectively perform all the steps of the claimed method, even
where no single party has performed all of the steps itself. A
KAMAI T HE S INGLE E NTITY R ULE A BOLISHED
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Distinguished requiring proof of direct infringement from
requiring proof that a single party was liable as a direct
infringer. Deemed that a party who induces others to collectively
practice the steps of the method has same impact as inducing a
single direct infringer. Addressed the problem where infringers
could escape liability by simply dividing infringing conduct among
multiple parties. S INGLE E NTITY R ULE A BOLISHED (C ONT D )
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No requirement that a single entity directly infringe means
that many more claims are potentially infringed Obvious benefit for
plaintiffs: District courts denying summary judgment motions that
would have been granted pre-Akamai Akamai = Significant Expansion
of Potential Liability
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Pre-Akamai, in my opinion, inducing infringement claims often
were asserted by plaintiffs as a just- in-case claim Abolition of
the single entity rule changes that Good-faith belief of
non-infringement is relevant evidence that tends to show that an
accused inducer lacked the intent required to be held liable for
induced infringement Defendants should give greater consideration
to obtaining an opinion of counsel Akamai Opinions of Counsel More
Important?
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Dont limit opinions of counsel to non- infringement: Good faith
belief of invalidity may be a defense to induced infringement. See,
e.g., Commil USA, LLC v. Cisco Sys., Inc., - - - F.3d - - -, 107
U.S.P.Q.2d 1290 (Fed. Cir. June 25, 2013) Commil cases raises issue
of whether good faith belief in many other defenses could be
defense against liability for induced infringement, such as: Laches
License Exhaustion Akamai Opinions of Counsel More Important?
(Contd)
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Dont wait to see if/how Federal Circuit resolves issue of
relevance of good faith belief in other defenses Take steps now to
establish good faith defenses Dont forget to preserve argument at
trial Preserve Your Argument Part I Defendants
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D IRECT I NFRINGEMENT
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When a single actor commits all the elements of infringement,
that actor is liable for direct infringement under 35 U.S.C.
271(a). Direct infringement has not been extended to cases in which
multiple independent parties perform the steps of a method claim.
Direct infringement is a strict liability tort. D IRECT I
NFRINGEMENT 35 U.S.C. 271(a)
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Courts have found vicarious liability for direct infringement
when the infringing acts are committed by an agent of the accused
infringer or a party acting pursuant to the accused infringer's
direction or control, and where multiple parties combine to perform
every step of a claimed method and one party exercises control or
direction over the entire process. V ICARIOUS L IABILITY D IRECT I
NFRINGEMENT
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The determination of vicarious liability is fact-specific.
Courts have considered: Whether the accused provides direction to
another entity for performance or simply contracts out the steps to
a third party. The nature of the contract if one exists; the mere
fact that one exists is often not sufficient. The nature of the
relationship; making information available, prompting, instructing,
or facilitating the third party, without more, is often not
sufficient. Companies generally are not vicariously liable for the
actions of their customers. V ICARIOUS L IABILITY D IRECT I
NFRINGEMENT
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Federal Circuit ordered en banc rehearing of Akamai focused on
the following issue: 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? To surprise of practitioners, Akamai (en banc) was
resolved on 271(b) induced infringement grounds Perception is that
Akamai is of no relevance to direct infringement Akamai Was
Supposed to Address Direct Infringement Through Vicarious
Liability
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Judges Linn and Newman both dissented, in separate opinions.
Both advocated for expanding the scope of liability for direct
infringement beyond strict "direction or control" agency analysis
of the single-entity rule. Judge Newman: The court should simply
acknowledge that a broad, all-purpose single- entity requirement is
flawed, and restore infringement to its status as occurring when
all of the claimed steps are performed, whether by a single entity
or more than one entity, whether by direction or control, or
jointly, or in collaboration or interaction. Advocated treating
patent infringement as a tort, rather than requiring strict
liability. A KAMAI D ISSENTING O PINIONS S UGGEST B ROADER S COPE
OF D IRECT I NFRINGEMENT L IABILITY
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Judge Linn: I would hold that 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. The acts of each
participant in a joint enterprise are, by definition, imputed to
every member. A KAMAI D ISSENTING O PINIONS S UGGEST B ROADER S
COPE OF D IRECT I NFRINGEMENT L IABILITY ( CONT D )
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Post-Akamai decision: Travel Sentry, Inc. v. Tropp, 2011-1023,
2012 WL 5382736 (Fed. Cir. Nov. 5, 2012): We therefore left open to
possible future cases whether some form of liability for divided
infringement could occur in some circumstances under 271(a). While
a reasonable fact-finder could in some circumstances find that
direction could be separated from control and lead to infringement
liability, such circumstances have not found their way into our
precedent at the present time. We therefore will review this appeal
under the rubric of induced infringement. A KAMAI D ISSENTING O
PINIONS S UGGEST B ROADER S COPE OF D IRECT I NFRINGEMENT L
IABILITY ( CONT D )
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Do not limit your direct infringement contentions to direction
and control For any limitations not practiced directly by a
defendant, offer proof and argument re: action jointly, or in
collaboration, or interaction with another (Judge Newman dissent);
and participation in a joint enterprise (Judge Linn dissent)
Preserve Your Argument Part II Plaintiffs
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Petitions for writ of certiorari to the Supreme Court have been
filed Amicus Curiae briefs filed by Google, Altera, and CTIA.
Supreme Court did not grant cert. before end of term, but it did
invite the views of the Solicitor General S TAY T UNED