Closing the Akamai
II Loophole: An Alternative Approach to Determining Liability for the Joint
Infringement of Interactive Method Claims
By:
Ehsun Forghany
Table of Contents
Introduction................................................................................................................................. 2
I. Unified Patent Infringement Law........................................................................................ 3
II. Divided Patent Infringement Law...................................................................................... 6
A. Divided Infringement Before Akamai II: The Single-Entity Rule............................................ 8
B. Divided Infringement After Akamai II: The
Inducement-Only Rule...................................... 10
III. Identification of the Legal Problem: Akamai II Failed to Close the Loophole
for Actors Jointly Infringing Interactive Method Claims.......................................................................... 13
A. Patentees Cannot Enforce Their Interactive
Method Claims Under the Single-Entity Rule... 14
B. The Inducement-Only Rule Creates An Almost
Impenetrable Barrier for Patentees Seeking to Enforce Interactive Method Claims.................................................................................................................... 16
C. Patentees Cannot Cure Divided Infringement
Issues by Drafting Unitary Claims................. 18
IV. Proposed Solution: An Alternative Approach
to Determining Liability for the Joint Infringement of Interactive Method
Claims.............................................................................................. 21
A. Step 1: Find a Nexus Between Interactivity
and Patentability.............................................. 22
B. Step 2: Apply the Golden Hour Factors............................................................................... 22
C. Advantages of the Proposed Approach................................................................................ 24
V. Conclusion.......................................................................................................................... 25
The patent system exists to incentivize
inventors to create and share innovative, useful inventions with the public by
giving them exclusive rights to practice their inventions for a limited time. Such an
incentive only exists, however, if inventors can readily and reliably enforce
their exclusive rights. A loophole
in patent infringement law that allows others to practice a patented invention
overrides this incentive. It
instead discourages inventors from sharing their inventions, and as a result, prevents
society from receiving all their benefits. The doctrine of divided infringement
created such a loophole by allowing entities to jointly infringe a patented
method without any liability. By
entering into arms-length agreements, infringing entities collectively performed
different steps of a patented method and avoided both direct and indirect
infringement liability. The Federal Circuit historically struggled to close
this loophole because it was unable to establish a standard that both enforced
patented methods and shielded innocent infringers from liability.
In the recent Akamai II[1] decision, the Federal Circuit found its second wind and attempted to finally
close this loophole by broadening its joint infringement standard to include
inducement liability. Under the
courtÕs newly minted standard, a Òsingle entityÓ must still perform an
underlying act of infringement to be liable for direct infringement, but inducers
will not be liable for indirect infringement by inducing others to jointly
infringe the patented method. While Akamai
II certainly closed the loophole for most patentees, it failed to
completely close it for those seeking to enforce interactive method
claims. Methods involving
interactive technologies require the cooperation of multiple entities to
complete each and every step of the method. These methods are interactive by their
very nature and their claims must be directed to or at least mention more than
one actor to properly claim the invention.
Even under the courtÕs new joint infringement standard, infringing
entities can still divide the steps of an interactive method claim without one
actor controlling or even inducing the other actors. Thus, the Akamai II standard prevents patentees from enforcing their
interactive method claims.
In order to understand the new joint
infringement standard under Akamai II,
Part I briefly outlines the law of unified patent infringement, while Part II explains
the new standard for determining joint infringement liability, specifically the
single-entity and inducement-only rules introduced in Akamai II. Part III
identifies the legal problems this standard poses for enforcing interactive
method claims. Part IV proposes an
alternative approach exclusively designed to enforce interactive method claims,
discourage poorly drafted claims, and shield innocent infringers from
liability.
The law generally divides patent
infringement into two distinct yet interconnected categories: direct and
indirect infringement. Section
271(a) under Title 35 defines direct infringement as follows:
(a) Except as otherwise provided in this
title, whoever without authority makes, uses, offers to sell, or sells any
patented invention, within the United States or imports in the United States
any patented invention during the term of the patent thereof, infringes the
patent.[2]
Direct
infringement is a strict liability offense – i.e., it does not require that the accused infringer possess
knowledge of the patent. It instead
only requires that the accused infringer perform each and every step of a
claimed method.[3]
For a party to be liable for direct
infringement, that party must directly infringe the patent by performing all
the necessary steps of a patented method, either personally or vicariously.[4]
Indirect infringement, on the other hand,
occurs when a party participates in or encourages infringement, but does not
directly infringe the patent.[5]
There are two types of statutorily
defined indirect infringement: inducement and contributory infringement.[6] Inducement refers to the active and
knowing aiding and abetting of anotherÕs direct infringement.[7] Section 271(b) states that Ò[w]hoever
actively induces infringement of a patent shall be liable as an infringer.Ó[8] Liability under Section 271(b) exists if
an inducer specifically intends to cause, urge, encourage, or aid another to
infringe a patent.[9] In other words, the accused infringer
must have knowledge of the patentÕs existence, know that the induced acts
constitute patent infringement, and take affirmative steps to lead, prevail, or
influence another to infringe the patent.[10]
Induced infringement is both narrower and
broader than direct infringement for several reasons.[11] First, induced infringement, unlike
direct infringement, has an intent requirement; the inducer must 1) know that
the induced acts constitute patent infringement,[12]
and 2) possess the specific intent to encourage anotherÕs infringement.[13]
Second, induced infringement only attaches
liability if the inducement results in actual infringement.[14]
In other words, even though a single entity does not have to perform all the
steps of a claimed process, every step must still be performed by at least one entity. Because patent law does not recognize
attempted patent infringement, actual infringement is required to establish
liability under inducement infringement.[15] Lastly, a party directly infringes a
patent by either performing all the steps of the claim method directly, or
engaging in an agency-type relationship with the actors performing the steps.[16]
By contrast, inducement does not
require any special relationship between the parties beyond performing the inducing
acts themselves.[17]
An example may help illustrate the
nuances between direct and indirect infringement. Suppose, for instance, that Inventor
patents a method for manufacturing steel more efficiently. Shortly thereafter, Company A produces a
chemical compound that can be used in the claimed method. To increase revenue, Company A decides
to sell the chemical with a manual that instructs customers to use its product
in the claimed method, knowing full well that Inventor holds the aforementioned
patent. Customer innocently purchases
the product and personally performs each and every step of the claimed
method. Under these facts, only
Customer would be liable for directly infringing the patent because she was the
only one to practice each and every claimed step. Company A, however, would still be
liable for inducement because 1) it knew the patent existed, 2) it specifically
intended for Customer to infringe the patent; and 3) Customer performed each
and every step of the patented method.
Contributory
infringement, on the other hand, occurs when Òa party offers to sell or imports
a component that does not have a non-infringing use.Ó[18] Section 271(c) states that:
(c) Whoever
offers to sell or sells within the United States or imports into the United
States a component of a patented machine, manufacture, combination or
composition, or a material or apparatus for use in practicing a patented
process, constituting a material part of the invention, knowing the same to be
especially made or especially adapted for use in an infringement of such
patent, and not a staple article or commodity of commerce suitable for
substantial noninfringing uses, shall be liable as a contributory infringer.[19]
Liability exists under Section 271(c) if
a seller 1) knows that the component was Òespecially made or especially adapted
for use in an infringement of such patent,Ó and 2) the component does not have
any substantial noninfringing uses.[20]
Like inducement, contributory
infringement also requires the accused infringer know the patent exists.[21]
Divided infringement occurs when the
conduct of multiple parties infringes a patent. This poses a particular problem for
patentees seeking to enforce patented methods. Unlike claimed methods, whenever a
claimed product is made, used, or sold, there is always a direct infringer: the
entity who completes the product.[22] By contrast, patented methods may only
be infringed by combining the steps each party takes to complete the claim.[23] In these situations, direct infringement
does not provide patentees with a remedy because, as explained above, Òwhen one
person does not perform each and every step of the claimed process, no person
directly infringes the claim.Ó[24]
Unsurprisingly, courts have historically
struggled to adopt a joint infringement standard that strikes a reasonable
balance between protecting patented methods and shielding innocent actors from
strict liability.[25]
Establishing
the requisite relationship between the entities that collectively perform a
claimed method before attaching liability has been central to this issue. On the one hand, raising the joint
infringement standard effectively renders some valid method claims
unenforceable, which discourages companies from seeking patent protection and
as a result, stifles innovation.[26] This outcome directly conflicts with the
constitutional mandate that Congress Òpromote the Progress of Science and
useful Arts.Ó[27] On the other hand, broadening rules for
applying joint infringement captures customers of an alleged infringing service
that innocently perform a step in the method.[28] A standard that finds liability without
regard to any circumstances surrounding the infringement ensnares innocent
actors, and once caught, places an undue burden on the courts to cut them free.[29]
Prior to the Federal CircuitÕs decision
in Akamai II, courts applied a more
stringent joint infringement standard. In order for a court to find entities
liable for either direct or indirect infringement, at least one actor had to
exert enough Òdirection or controlÓ over for all the infringing actors to be
viewed as a Òsingle entity.Ó In
other words, direct infringement was a predicate to finding joint infringement
liability, even under inducement. This
became known as the Òsingle-entityÓ rule.
Unfortunately, this rule created a loophole that many defendants
exploited to avoid liability. Infringers,
knowing of patented processes, essentially left the last step to be performed
by another actor. By engaging in
what appeared to be an arms-length transaction, infringing entities were able
to claim that they were not controlling or directing the actions of the other
entities. Because no single person
was performing each and every step of a claimed invention, many infringers
avoided liability.
Fortunately, the Akamai II court recognized this loophole and expanded joint
infringement liability to include inducement. This newly minted Òinducement-onlyÓ rule
no longer requires the inducer to Òdirect or controlÓ the induced actors. Courts instead find inducement liability
even where a single actor does not perform all the steps of a claimed method. Under this new joint infringement
standard, the single-entity rule still governs liability under direct
infringement, but the inducement-only rule now determines liability under
indirect infringement.
In
the 2007 decision BMC v. Paymentech,[30]
the Federal Circuit sought to clarify Òthe proper standard for whether a method
claim is directly infringed by the combined actions of multiple parties.Ó[31] There, plaintiff BMC asserted two
patents that disclosed a method requiring the combined action of several
distinct participants against defendant Paymentech, claiming both direct and
indirect infringement. Paymentech moved for summary judgment,
arguing that it did not perform all of the steps of the claimed method either
alone or in concert with its customers.[32] BMC responded by arguing that under the
Federal CircuitÕs pervious decisions, a plaintiff must only show Òparticipation
and combined actionÓ on the part of the alleged infringer to prove joint
infringement.[33]
On appeal, the Federal Circuit rejected
BMCÕs joint infringement argument.[34]
The court instead stated that Òwhen a defendant . . . does not directly infringe a patent,
the normal course under the law is for the court to apply the standards for
liability under indirect infringement.Ó[35] The court further explained that a
finding of indirect infringement requires that a party amongst the accused
actors commit the entire act of direct infringement.[36] Relying on past decisions, the court
refused to find joint liability where one party did not control or direct each
step of the claimed method.[37]
To succeed in an action for
inducement or contributory infringement, BMC
further held that a plaintiff must first show that direct infringement under Section
271(a) occurred.[38] The Federal Circuit therefore reaffirmed
the long-standing principle that Òinducement requires a predicate finding of
direct infringement.Ó[39] In cases where a mastermind instructed a
third party to carry out one or more steps of a claim, the court stated that
the controlling party would not be liable for indirect infringement either.[40]
This single-entity rule created a
loophole that many infringing entities
exploited to avoid liability. By
entering into arms-length agreements, they could practice the claimed method
without violating the single-entity rule.
Revisiting an earlier example may help explain this situation. Suppose, for instance, that Company A
only performed the first step of the claimed method by producing its chemical
compound.[41]
To avoid liability, Company A sold this compound to Customer and included
detailed instructions on how to perform the remaining steps of the patented
method. Under the single-entity
rule, neither Company A nor Customer are liable because neither one 1)
performed each and every step of the claimed method, or 2) exerted the
necessary direction or control over the other.
The BMC
opinion acknowledged this loophole, but expressly decided that such situations
did not warrant expanding the law of direct infringement.[42] Instead of judicially closing this
loophole, the court suggested that this concern could be Òoffset by proper
claim drafting.Ó[43] Specifically, the Federal Circuit stated
that patentees could avoid joint infringement issues by drafting claims
directed to a single infringer.[44] Through this reasoning, the BMC court concluded that Paymentech did
not infringe the patented method.[45]
After
BMC, many commentators became
concerned that the single-entity rule would effectively render many patented
methods unenforceable.[46] To close the loophole created by the
single-entity rule, the Akamai II opinion
created a new judicial doctrine under Section 271(b) to find liability when
multiple entities collectively performed a method claim.[47] While many believed that the Federal
Circuit would address the continued use of the single-entity rule, the court
declined to do so.[48] Instead, the decision focused on whether
an entity may be liable for induced infringement if it has induced other actors
to collectively perform the steps without a single direct infringer (e.g., the Akamai fact pattern) or has only partially performed the method
itself and induced another to commit the remaining steps (e.g., the McKesson fact
pattern).
The
Akamai II en banc opinion rendered a
combined decision for Akamai v. Limelight[49]
and McKesson v. Epic Systems[50].
The patents at issue in Akamai recited methods for delivery of
web content by placing some of a providerÕs content on servers and modifying
the providerÕs website to instruct users to retrieve the content from the
server.[51] Akamai alleged that Limelight was liable
for both direct and induced infringement through the maintenance of a network
of servers that allow delivery of web content placed on its servers.[52] Limelight instructed its users on how to
modify their websites to access the server based information, but did not
modify the sites directly.[53]
Along the same lines, the asserted patent
in McKesson covered a method of
electronic communication between a healthcare provider and the patient.[54] McKesson claimed that Epic Systems
induced infringement of the patent by licensing its ÒMy ChartÓ software to
healthcare providers, which enabled them to communicate electronically with
patients.[55] Epic Systems, however, did not complete
any of the steps of the patent method.[56] Instead, the patients that initiated the
communications and the healthcare providers that performed the remaining steps
completed those steps.[57]
In
the en banc opinion, the Federal Circuit preserved the Òsingle-entity ruleÓ for
direct infringement but expressly overruled its application to inducement. The court instead held that for a party
to be found liable for inducement, all the steps of the claimed method must
still be performed, but every step does not have to be performed by a single
entity.[58] Under this new, so-called Òinducement-onlyÓ
rule, an entity can be liable for indirect infringement when it induces one or
more entities to perform all the steps in a method claim, regardless of whether
the inducer performs some of the steps itself or whether there is control or
direction between the inducer and the induced entities or between the induced
entities themselves.[59]
Relying on legislative history, the
majority reasoned that inducement applies to joint infringement cases because
one who aids or abets infringement is Òlikewise an infringer.Ó[60] Applying its newly minted inducement-only
rule, the Akamai II court reversed
and remanded both cases down for further proceedings on the theory of induced
infringement.[61]
The
Federal CircuitÕs reasoning rests on sound policy. Requiring a single entity to commit the
underlying act of direct infringement as a prerequisite to liability for
inducement served purpose as it Òinvite[d] evasion of the principles of patent
infringement.Ó[62] There is no reason to hold a party that
induces multiple actors to collectively commit an act of direct infringement
differently from one who induces a single actor. Either way, the patentee suffers the
same impact. An actor who directly
infringes a patented method might be considered more culpable than one who does
not perform any infringing acts, but as long as the infringement occurs, the
harm to the patentee is identical.
It would therefore be nonsensical to immunize an inducer who completes
some of the steps of the claimed method, but induces others to complete the remaining
steps. Moreover, the courtÕs new
inducement-only rule also protects innocent infringers. Liability for induced infringement
requires the accused party to Òknowingly induce infringement and possess
specific intent to encourage anotherÕs infringement.Ó This specific intent requirement
protects those who may be innocently unaware of the existence of a patent or
unaware that there are other parties committing other steps of a patented
method. Accordingly, the Akamai II court seems to have struck a balance between enforcing patented
methods and shielding innocent infringers from liability.
In essence, the Akamai II decision places direct and induced infringement into
distinct categories of joint infringement.
Direct infringement still requires that the infringing entities jointly
perform all of the steps of the claimed method through a vicarious relationship
– i.e., the single-entity rule. Induced infringement, however, will now
arise when multiple actors, without a vicarious relationship, combine to commit
direct infringement, meaning the performance of all of the steps of a method
claim, as a separate liability. As
the Federal Circuit succinctly stated, ÒCongress did not intend to create a
regime in which parties could knowingly sidestep infringement liability simply
by arranging to divide the steps of a method claim between them.Ó[63] The inducement-only rule therefore
tightens the loophole by holding liable entities that knowingly induce
infringement of a method claim.
While Akamai
II closed the divided infringement loophole for most patented methods, it
failed to do so for interactive method claims. Methods involving interactive
technologies require the cooperation of multiple entities to complete each and
every step of the method.[64] A person may, for example, invent a new
and useful process that requires steps (a) and (b) of a claimed process to be
performed by one person and step (c) to be performed by another person. These interactive method claims are
surprisingly common, particularly in the field of computer networking, where a
patented method may involve some steps performed on the client side and other
performed on the server side.[65] Since these methods distribute the
claimed steps amongst different actors, they create significant problems for
patentees seeking enforcement.
The Akamai
II courtÕs joint infringement standard is, at least in theory, a clever
solution for solving the BMC problem. By simultaneously preserving the
single-entity rule and creating the inducement-only rule, the court found a
reasonable balance between protecting most
method claims and shielding innocent infringers from liability. In terms of practicality, however, this new
standard obstructs the attempts of patentees seeking to enforce interactive method claims. As demonstrated below, the single-entity
and inducement-only rules fail to completely close the loophole for patentees
of interactive methods, enabling actors to reap the benefits of patents that
cannot be easily enforced. Until
the court adopts a new approach, patentees will continue facing barriers to
enforcing their interactive method claims.
The Akamai
II courtÕs decision to preserve the single-entity rule renders most interactive
method claims unenforceable under the doctrine of direct infringement. Pursuant to the single-entity rule,
Òmultiple entities could only be held liable for infringement when an
underlying act of direct infringement under Section 271(a) occurred.Ó[66] Entities meeting the same relationship
requirement for direct infringement must perform this underlying act.[67] In other words, one actor must Òcontrol
or directÓ the others to perform each and every step of a claimed method before
a court can attach direct infringement liability.[68]
This rule presents a unique
challenge for patentees seeking to enforce interactive method claims. These methods are interactive by their
very nature and their claims must be directed to or at least mention more than
one actor to properly claim the invention.
Infringing entities can therefore more easily divide the steps of an
interactive method claim without one actor controls the others. As a result, many patentees can no
longer enforce their interactive method claims through the doctrine of direct
infringement.
This outcome may lead to severe
consequences for interactive technology providers, especially those involved in
the computer networking, software, or biotechnology industries. For these firms, a competitor can easily
replicate an innovative method containing steps performed by more than one
entity without infringing the corresponding patent. Amazon.comÕs patent covering its 1-Click
purchasing method,[69]
for example, falls victim to this gamesmanship. This patent covers an interactive method
claims containing, inter alia, two
steps for a client system and two other steps for a server system.[70] Since a single actor cannot complete the
method, a competitor can create a server system with all the same functions as
the 1-Click purchasing method without directly infringing AmazonÕs method claim
because the end user must complete the remaining steps of the method. The single-entity rule therefore removes
direct infringement liability as a potential remedy for such patentees. As the BMC court acknowledged, Òthe standard requiring Ôcontrol or
directionÕ for a finding of joint infringement may in some circumstances allow
parties to enter into arms-length negotiations to avoid infringement.Ó[71]
This statement rings particularly true where multiple entities jointly infringe
an interactive method.
Although Akamai II broadened joint infringement liability by creating the inducement-only
rule, the additional requirements for inducement, specifically the intent
requirement, may pose an additional barrier to
enforcement. Inducement requires
not only an act of direct infringement, but also that the inducer possess the
affirmative intent to cause the direct infringement.[72]
As a result, an infringing entity
will only be held liable for inducement if the patentee proves that the inducer:
1) knew the patent existed, 2) knowingly induced the completion of all of the
steps of the claimed method, and 3) possessed the specific intent to encourage
the completion of all the steps of the claimed method.[73]
This scienter requirement presents
a significant challenge for enforcing interactive methods because an inducer
may not intend for the induced actor to perform the specific limitation of the
claim. Accordingly, this
intent requirement places patentees of interactive methods in an unfortunate Catch-22
situation: while drafting a narrower claim limitation likely makes the claim
more patentable,[74]
it also makes it more difficult to prove the intent prong of inducement.
Comparing two sample claims of an
interactive medical process method from the recent Supreme Court case Mayo Collaborative Servs. v. Prometheus
Labs, Inc.[75] may help explain
this precarious situation. The
claims at issue in Mayo cover a
medical process that informs a doctor using thiopurine drugs to treat patients
with sleep apnea about the efficacy of a given dosage of the drug.[76]
Asserted independent Claim 1 reads:
A method for
assessing the effectiveness of a treatment for sleep apnea, wherein said method
comprises: administering the CPA treatment for sleep apnea to a mammal before
sleep, determining whether or not the level of expression of a nucleic acid in
a mammal being treated for sleep apnea changes during sleep, wherein a change
in said level during sleep indicates that the treatment is ineffective, and
modifying the treatment based on the level of change identified.
Assuming that the diagnostic test
provider is the alleged infringer, intent could likely be proven for the
administering step because the test provider must intend for the doctor to
administer the treatment in order to provide a proper sample for the diagnostic
test. The test provider would
likely complete the determining step itself with the provided sample. Therefore, the main issue in this claim
involves proving intent for the final step, modifying the treatment. Since this claim describes the final step
in fairly simple terms, the patentee can easily prove that the test provider
intended for the doctor to make some
change in his practice based on the results provided. The patentee could argue, for example,
that the doctor would not send the sample for testing unless he had been told
what to do with the results. Thus,
while a patentee can enforce broad claims like Claim 1 under the inducement
only rule, not all method claims will be patentable once drafted in this
manner.
By
contrast, Claim 3 depends from Claim 1 and describes more specific administering
and treatment steps.[77] While this specificity increases the
likelihood of patentability, it nevertheless becomes more difficult to prove
the test provider possessed the requisite intent for all of the limitations in the claim. Asserted dependent Claim 3 reads:
Administering
CPAP treatment comprising two three hour intervals of at least 6 cm H20 to a
mammal before sleep for sleep apnea, determining whether the level of
expression of a nucleic acid in a mammal being treated for sleep apnea
increases, wherein an increase of at least .2% in nucleic acid level during
sleep indicates that CPAP is ineffective, and wherein determining whether the
level of expression of a nucleic acid in a mammal being treated for sleep apnea
increases during sleep comprises performing assay 1 and then performing assay
2, and modifying CPAP treatment administered to a mammal being treated for
sleep apnea who exhibits an increase of at least .2% in nucleic acid level, the
modified CPAP treatment comprising three 2.5 hour intervals of at least 10 cm
H20.[78]
Compared
to Claim 1, this claim contains much more detailed information about
administering the CPA treatment and modifying the treatment after the lab
provides results. Since the alleged
inducer must possess an affirmative intent to cause the direct infringement, he
must intend for the doctor to complete the treatment step with every claim
limitation, no matter how specific.
In these circumstances, it would be significantly harder for the
patentee to prove that the test provider possessed the specific intent for the
doctor to modify the treatment in such a particular manner. Thus, while drafting a narrower claim
like Claim 3 makes the method more patentable, it also makes it more difficult to
enforce under the inducement-only rule.
The Federal Circuit and several
commentators have suggested that patentees of interactive method claims can
avoid divided infringement issues by drafting broader, unitary claims.[79] Unitary claims are claims in which all
the steps of the method are illustrated from the perspective of one entity.[80] In many instances, a patentee can
describe a method in unitary form by Òstructur[ing] a claim to capture
infringement by a single party.Ó[81] Compare, for example, two different
claims[82]
directed to a method commonly employed in electronic commerce to secure
communication between browsers and websites. Claim 1 discloses:
1. A method for negotiating a secure
communication session, comprising: (a) transmitting a request to a server; (b)
in response to the request, supplying the server a server certificate, the
server certificate including the serverÕs public key; (c) generating at the
client a unique key and communicating the unique client key to the server using
the serverÕs public key; and (d) thereafter communicating information using a
crypto-algorithm that employs a derivative of the unique client key and the
serverÕs public key.[83]
Claim
2 covers the same invention, but reads:
2. A method for negotiating a secure
communication session, comprising (a) receiving a request from a client; (b) in
response to the request, supplying a server certificate, the server certificate
including a public key; (c) receiving from the client a unique client key
communicated using the serverÕs public key; and (d) thereafter communicating
information using a crypto-algorithm that employs a derivative of the unique
client key and the serverÕs public key.[84]
Despite
the fact that both claims seek to cover the same invention, only the second
claim is unitary because the first requires both the client and the server to
perform the claimed steps.[85] As a result, the divided infringement
issues arise for the first claim but not the second.[86]
Truly interactive methods, unlike most
methods, cannot be drafted in unitary form because they cannot be properly
claimed unless they are directed to multiple actors. Unitary claim drafting only works where
the method claim involves a ÒhubÓ – i.e.,
an actor for at least one of the claimed steps that interacts with other actors
for all the remaining steps, so that the remaining steps can be written from
the perspective of the hub.[87] Since most interactive methods do not
involve a hub, they cannot be drafted in unitary form.
Medical diagnostics patents like those previously
discussed in Mayo, for instance,
often involve a method that contains steps such as data gathering, analysis,
correlation, and treatment with a drug in the end.[88] These steps are typically carried out by
different parties, such as a diagnostic laboratory that performs the analysis,
a pharmaceutical company that provides the drug, and a physician that collects
the data and provides treatment.[89] It is therefore impossible to draft
so-called better claims directed to a single infringer for these interactive
diagnostic patents. As a result, a
rigid rule that relies on inducement makes many patents directed to interactive
technologies unenforceable. As
Judge Newman warned in her dissenting opinion, Ò[a] patent that cannot be
enforced on any theory of infringement is not a statutory patent right.Ó[90] Rendering valid interactive method
claims unenforceable will inevitably Òeliminate the patent incentive from such
interactive procedures,Ó leaving these types of methods vulnerable to
infringement and deter innovation.[91]
Neither the single-entity rule nor the
inducement-only rule properly equips the judiciary to handle the joint
infringement fact patterns of the Information Age. Patentees seeking to enforce interactive
claims are therefore at a server disadvantage.[92] As one amicus curie explained,
interactive claim language may be the best way to capture the interactive
nature of the invention and the patentee should not be forced to draft unitary
claims so that those claims can be enforced.[93]
Accordingly, a more flexible
approach for determining joint infringement liability is desperately needed to
make interactive patents easier to enforce.
This section proposes an alternative standard
designed to close the Akamai II
loophole for patentees of interactive method claims. The proposed approach undertakes a two-step
procedure for determining joint-infringement liability adapted from the Golden Hour[94]
decision. First, the patentee would
provide a rationale for an asserted claimÕs interactivity – i.e., prove a nexus between
interactivity and patentability.
Second, the court would selectively apply a certain test for joint
infringement based on the result of the interactive inquiry. By providing patentees with a flexible alternative
to the newly minted single-entity and inducement-only rules, the proposed
standard accomplishes three
objectives: 1) it does not force patentees to drafted unitary claims, 2) it
protects interactive technologies to encourage further innovation, and 3) it shields
innocent actors from liability. Incorporating
this test into a judicial framework will afford courts more flexibility in
analyzing joint infringement cases.
In sum, an alternative, more flexible standard for enforcement will
encourage patentees to continue to file applications for methods covering
interactive technologies.
The proposed test first requires the
patentee to prove that a nexus exists between the ÒinteractivityÓ of a claimed
method – i.e., the reason why
the claims require more than one actor – and the patentability of the
claim. In this context, ÒnexusÓ
would mean that the claimed interactivity is Òthe reason for,Ó Òreasonably
related,Ó or Òsubstantially related toÓ the patentability of the claim. In order to make the evidentiary showing
of a nexus, the patentee would primarily rely on intrinsic evidence, taking
into account statements in the specification, the preamble, and the prosecution
history. By providing evidence that
an asserted claimÕs interactivity was a factor in its patentability, the
patentee can show that the claimÕs interactivity made it novel and nonobvious.[95]
The second step of the proposed test
requires the court to evaluate the patenteeÕs evidentiary showing of a
nexus. If a nexus does exist, then
the court would not apply the inducement-only test. Instead, the court would apply the three
factors originally outlined in the Golden
Hour opinion to determine joint infringement liability. First, the court would determine whether
a Òjoint ventureÓ exists between the actors performing the claimed method.[96] This determination would depend on the
facts of the case.[97] Evidence such as joint sales activities,
joint promotional activities, and another other joint activity would weigh in
favor of a finding of joint infringement.[98]
Second, the court would determine whether
all the steps of the claimed method were performed by the Òconcerted actionÓ of
all the relevant actors. In Golden Hour, for example, the jury found
that the two accused entities, emsCharts and Softech, enabled their respective
programs to work together such that their combined system, which they sold as a
package, met all the limitations of the asserted claims.[99]
Such evidence would rise to the
level of Òconcerted action.Ó
Lastly, the court would examine any ÒbenefitÓ an accused entity received
from performing the claimed method.[100] Evidence of an entity obtaining a
commercial, competitive, or financial benefit would weigh in favor of finding
joint infringement.[101]
In Golden Hour, for instance, Softech
and emsCharts both benefited economically and competitively by selling their
combined system.[102] This factor essentially prevents parties
not engaged in a Òjoint ventureÓ from undermining the patent system by
misappropriating the benefit of an invention.
Alternatively, if the court finds that a
nexus does not exist, it should instead focus on the nature of the relationship
between the relevant actors and apply either the single-entity or inducement-only
rule. The lack of a nexus may
suggest that 1) interactivity is secondary to other limitations in the claim,
or 2) the claim could have been drafted in unitary form. Either way, a patenteeÕs ability to
enforce an interactive method will no longer be frustrated by applying the
inducement-only rule because truly interactive claims will easily exhibit the
requisite nexus.
Lastly, the
proposed approach would protect innocent actors from liability. As previously discussed, advocates for a
higher standard such as the inducement-only rule are primarily concerned that broadening
the joint infringement rules would ensnare innocent infringers.[103] Most innocent actors are customers of an
alleged infringing service and typically perform only one step in the alleged
infringed claim.[104]
Under the proposed standard,
however, truly innocent parties will not be subject to liability because courts
will have the leeway under this flexible standard to deny relief
altogether. For example, a court
could refuse to extend liability to innocent infringers because they neither engage
in Òjoint venturesÓ nor infringe through Òconcerted action.Ó
Moreover,
innocent infringers have rarely been involved in joint infringement cases.[105]
If the innocently induced are individuals, a patentee will not bring suit
either because they are not cost-effective litigation targets or they are
constituents of the patenteeÕs market – e.g., Internet users or doctors. If the innocently induced are more
sophisticated parties, such as corporations, they can incorporate an
indemnification clause in their business contract placing liability solely on
the accused entity. In sum, the
proposed approach would grant patentees a better opportunity to enforce their
claims, support the Federal CircuitÕs position on drafting ÒproperÓ claims, and
shield innocent actors from liability.
The Federal CircuitÕs new joint
infringement standard does not properly equip the judiciary to resolve the
divided infringement issues surrounding interactive method claims. It instead focuses on the inducement
inquiry and completely ignores other practical factors that should be
considered in determining joint infringement liability. Absent evidence of intent, the
inducement-only rule does nothing to close the judicial loophole. Accordingly, courts should adopt an
alternative, more flexible standard for determining divided infringement liability
for interactive method claims.
The proposed two-step standard for
determining joint infringement applies to claims that possess a nexus between
their interactivity and patentability.
Rather than subject these claims to the Akamai II courtÕs rigid joint infringement standard, the proposed
approach determines liability by weighing the Golden Hour factors. In
doing so, it prevents misappropriation of interactive technologies, encourages
properly drafted claims, and shields innocent actors from strict liability.
[1] Akamai Techs., Inc. v. Limelight Networks, Inc., 692 F.3rd 1306 (Fed. Cir. 2012) (en banc).
[2] 35 U.S.C. ¤ 271(a) (2013).
[3] BMC Res., Inc. v. Paymentech, L.P., 498 F.3d 1373, 1378 (Fed. Cir. 2007), overruled in part by Akamai, 692 F.3rd 1306.
[4] Akamai, 692 F.3d at 1305.
[5] DynaCore Holdings Corp. v. U.S. Philips Corp., 363 F.3d 1263, 1272 (Fed. Cir. 2004).
[6] See Mark A. Lemley, Inducing Patent Infringement, 39 U.C. Davis L. Rev. 225, 227 (2005).
[7] Walter Techs. Corp. v. Calco, Ltd., 850 F.2d 660, 668 (Fed. Cir. 1988); See also Lemley, supra note 8, at 229.
[8] 35 U.S.C. ¤ 271(b).
[9] Chisum, supra note 4, ¤ 17.01, at 17-2.
[10] Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060, 2065 (2011) (interpreting Section 271(b) despite absence of an explicit ÒintentÓ requirement but rather an ÒinduceÓ requirement).
[11] Akamai, 692 F.3d at 1308.
[12] Global-Tech Appliances, 131 S. Ct. at 2068.
[13] DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1306 (Fed. Cir. 2006) (en banc).
[14] Akamai, 692 F.3d at 1308.
[15] See in re Seagate Tech., LLC, F.3d 1360, 1368 (Fed. Cir. 2007).
[16] See Cross Med. Prod., Inc. v. Medtronic Sofamor Danek, Inc., 424 F.3d 1293, 1311 (Fed. Cir. 2005).
[17] See Akamai, 692 F.3d at 1308 (Ò[I]nducement does not require that the induced party be an agent of the inducer or be acting under the inducerÕs direct or control . . . It is enough that the inducer Ôcause[s], urge[s], encourage[s], or aid[s]Õ the infringing conduct and that the induced conduct is carried out.Ó).
[18] Lemley, supra note 6, at 230; 35 U.S.C. ¤ 271(c).
[19] 35 U.S.C. ¤ 271(b)-(c).
[20] Chisum, supra note 9, ¤ 17.01, at 17-2.
[21] Id.; See also Global-Tech Appliances, 131 S. Ct. at 2068
[22] Akamai, 692 F.3d at 1316.
[23] See Mark A. Lemley et al., Divided Infringement Claims, 6 Sedona Conf. J. 117 (2005).
[24] Id. at 58.
[25] See Id. By contrast, most courts did not question applying a higher joint infringement standard when multiple entities jointly infringed a non-interactive patent because they did not want to ÒbailoutÓ patentees with claims that could have been drafted in unitary form to avoid divided infringememt. Id.
[26] See McKesson Techs., Inc. v. Epic Sys. Corp., 98 U.S.P.Q. 2d (BNA) 1281, 1291 (Fed. Cir. 2011) (Newman, J., dissenting), revÕd sub nom. Akamai, 692 F.3d 1301.
[27] U.S. Const. art. I, ¤ 8, cl. 8.
[28] See Lemley, supra note 6, at 261 (discussing cases where alleged infringers were customers of the defendant).
[29] See Akamai, 692 F.3d at 1350 (Linn, J., dissenting) (describing Judge NewmanÕs approach as permitting Òjoint actor infringement liability whenever independent parties collectively infringe a patentÓ).
[30] BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d
1373, 1376 (2007).
[31] Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318, 1329 (Fed. Cir. 2008) (reviewing the analysis in BMC).
[32] BMC, 498 F.3d at 1377.
[33] Id. at 1380 (quoting On Demand Machine Corp. v. Ingram Industries, Inc., 442 F.3d 1331 (Fed. Cir. 2006)).
[34] See id. at 1380 (concluding that On Demand did not change the standard for joint infringement).
[35] Id. at 1379.
[36] Id.
[37] See id. at 1380 (citing district court decisions that did not find infringement in arms-length agreements and divided performance situations).
[38] Id. at 1380.
[39] See BMC, 498 F.3d at 1380 (citing Dynacore Holdings Corp., 363 F.3d at 1272).
[40] See id. at 1381 (arguing that contracting out steps to specifically avoid infringement would still result in liability for the mastermind).
[41] See supra pg. 5.
[42] BMC, 498 F.3d at 1381.
[43] Id.
[44] Id. (stating that Ò[a] patentee can usually structure a claim to capture infringement by a single partyÓ).
[45] Id. The Court noted that (1) there was no evidence that Paymentech provided its customers or financial institutions with instructions or directions for the use of the data it provided, and (2) the record contained no evidence of a contractual relationship between Paymentech and the financial institutions. Id. at 1382.
[46] See McKesson Techs., 98 U.S.P.Q. 2d (BNA) at 1291 (Newman, J., dissenting).
[47] See generally Akamai, 692 F.3d 1301.
[48] Id. at 1306.
[49] Akamai Techs., Inc. v. Limelight Networks, Inc., 629 F.3d 1311, 1319 (Fed. Cir. 2010).
[50] McKesson Techs. Inc. v. Epic Sys. Corp., No. 2010-1291, 2011 U.S. App. LEXIS 7531, at 1-2 (Fed. Cir. Apr. 12, 2011).
[51] Akamai, 692 F.3d at 1306.
[52] Id.
[53] Id.
[54] Id.
[55] Id.
[56] Id.
[57] Akamai, 692 F.3d at 1306.
[58] Id.
[59] Id.
[60] Id. at 1309 (quoting H.R. Rep. No. 82-1923, at 9 (1952)).
[61] Id. at 1319.
[62] Id. at 1317-18.
[63] Akamai, 692 F.3d at 1318.
[64] Lemley, supra note 23, at 125.
[65] Id. at 117.
[66] BMC, 498 F.3d at 1379-81.
[67] Id.
[68] See id.
[69] See U.S. Patent No. 5,960,411 (filed Sept. 12, 1997).
[70] Id. col. 10. The two steps for the client systems are Òdisplaying information identifying the itemÓ and Òin response to only a single action being performed, sending a request to order the item along with an identifier of a purchaser of the item to a server system.Ó The two steps for the server are Òreceiving the requestÓ and Òretrieving additional information previously stored for the purchaser identified by the identifier in the received request.Ó Id.
[71] Id. at 1381.
[72] DSU Med. Corp., 471 F.3d at 1306.
[73] See Vita-Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317, 1328 (Fed. Cir. 2009).
[74] Applicants draft narrower claims as part of target claiming strategies to retain some measure of protection against infringement even if the prior art comes to the fore that would invalidate the broadest claim. Chisum, supra note 9, ¤ 17.01, at 17-23.
[75] Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1294 (2012).
[76] Id. at 1295.
[77] Mayo, 132 S. Ct. at 1295.
[78] Id. at 1298.
[79] See BMC, 498 F.3d at 1381 (stating that Ò[a] patentee can usually structure a claim to capture infringement by a single partyÓ), overruled by Akamai, 692 F.3d 1301; See also Lemley et al., supra note 24, at 272 (ÒMost inventions that involve cooperation of multiple parties can be covered using claims in unitary form simply by focusing on one entity and whether it supplies or receives any given element.Ó).
[80] See Lemley et al., supra note 23, at 272 (providing a comparison between non-unitary and unitary claims for a method).
[81] BMC, 498 F.3d at 1381.
[82] See Lemley et al., supra note 23, at 272. The claimed subject mater is an abstraction and simplification of secure sockers layer (SSL) techniques developed by Netscape Communications to enable secure, authenticated communications across the Internet using public key encryption. SSL support is included as part of both the Microsoft and Netscape browsers and most Web server products.
[83] Id.
[84] Id.
[85] Id.
[86] Id.
[87] See Lemley et al., supra note 23, at 272.
[88] See supra pgs. 17-18.
[89] See, e.g., U.S. Patent No. 8,287,869 (filed Jan. 7, 2009) (claiming a method that comprises a step of measuring a patientÕs level of an intercellular signaling molecule, which is typically performed by a physician and a diagnostics laboratory, and a step of treating the patient with an antibody, which is usually provided by a pharmaceutical company and administered by the physician).
[90] McKesson, 98 U.S.P.Q. 2d at 1291 (Newman, J., dissenting), revÕd sub nom. Akamai, 692 F.3d 1301.
[91] Id. at 1286.
[92] Compare Muniauction, 532 F.3d at 1380 (finding no liability for direct infringement and no legal theory to support joint infringement where no evidence of direction or control was presented), with BMC, 498 F.3d at 1381-82 (stressing the importance of the direction or control test in determining whether infringement has occurred).
[93] See generally Corrected Brief of Amici Curiae Aristocrat Technologies Australia Pty Lt. & Aristocrat Technologies, Inc. in Support of Appellants Akamai Technologies, Inc. & the Massachusetts Institute of Technology & Supporting Reversal, Akamai, 692 F.3d 1301 (Nos. 2009-1372, -1380, -1417), 2011 WL 3101891.
[94] Golden Hour Data Sys. v. emsCharts, Inc., 614 F.3d 1367, 1369 (Fed. Cir. 2010).
[95] See 35 U.S.C. ¤ 103(c) (2013) (setting forth the conditions of patentability).
[96] See Golden Hour, 614 F.3d at 1371 (discussing defendantsÕ collaboration to combine their systems into one unit).
[97] See id. at 1370.
[98] See id. at 1370-71.
[99] Id. at 1383 (Newman, J., dissenting).
[100] See id. Courts have found parties liable for contributory infringement to prevent them from obtaining the benefit of a patent. See Mobil Oil Corp. v. W.R. Grace & Co., 367 F. Supp. 207, 253 (D. Conn. 1973) (allowing plaintiffÕs claim for contributory infringement where the defendant was able to achieve all benefits of its patent by making each of its customers its agents in completing the infringing step).
[101] See Golden Hour, 614 F.3d at 1383 (Newman, J., dissenting).
[102] Id.
[103] See Lemley, supra note 6, at 262 (stating that joint infringement unreasonably expands liability).
[104] Id. at 261 (discussing cases where alleged infringers were customers of the defendant).
[105] See id.