This document summarizes the law around divided or joint infringement after key Supreme Court cases. It discusses that for direct infringement, one entity must perform all steps of a method claim or direct/control the performance of each step. For induced infringement, the inducer must intend to cause infringement but need not directly perform each step. There is no liability if no single party performs all steps but the inducer does not intend to cause joint infringement. Obtaining an opinion of counsel can be used to show lack of intent for induced infringement.

1. Divided Infringement after Akamai
Round 2
Jerry R. Selinger
November 2012
California  Texas  New Jersey  North Carolina

2. The Relevant Statutes
 Direct Infringement
 “[W]hoever without authority makes . . . any patented
invention infringes the patent.”
 Active Inducement
 35 U.S.C. § 271(b) - “Whoever actively induces
infringement of a patent shall be liable as an
infringer.”
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3. BMC Resources, 498 F.3d 1373 (Fed. Cir. 2007)
 Representative portion of claims at issue:
 A method of paying bills using a telecommunications
network . . . comprising the steps of: . . .
 Prompting the caller to enter a payment number . . .
 Accessing a remote payment network associated with
the payment number . . .
 The accessed remote payment network
determining . . . Whether sufficient available credit
or funds exist in an account associated with the
payment number . . .
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4. BMC Resources, 498 F.3d 1373 (Fed. Cir. 2007)
 “Infringement requires . . . a showing that a
defendant has practiced each and every element
of the claimed invention.” Id. at 1380.
 The Federal Circuit rejected a “participation and
combined action” standard that BMC argued had
been adopted in On Demand Machine Corp. v.
Ingram Industries, 442 F.3d 1331 (Fed. Cir.
2006).
 On Demand’s approval of jury instruction
dismissed as dicta.
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5. BMC Resources, 498 F.3d 1373 (Fed. Cir. 2007)
 “Courts faced with a divided infringement theory
have . . . generally refused to find liability where
one party did not control or direct each step of
the patented process.” Id. at 1380.
 “[E]xpanding the rules governing direct
infringement to reach independent conduct of
multiple actors would subvert the statutory
scheme for indirect infringement. . . . Under
BMC's proposed approach, a patentee would
rarely, if ever, need to bring a claim for indirect
infringement.” Id.
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6. Akamai (en banc)
 6-5 (sort of)
 Rader, Lourie, Bryson, Moore, Reyna and Wallach
 Newman
 Linn, Dyk, Prost, O’Malley
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7. Akamai (en banc)
 Holdings
 A defendant may be held liable for induced
infringement if the defendant has performed some of
the steps of a claimed method and has induced other
parties to commit the remaining steps.
 The situation in Akamai
 A defendant may be held liable if the defendant has
induced other parties to collectively perform all the
steps of the claimed method, but no single party has
performed all the steps itself.
 The situation in McKesson
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8. Akamai (en banc)
 Caveats and more
 Much of the briefing “has been directed to whether
direct infringement can be found when no single entity
performs all of the claimed steps of the patent.”
 It is “not necessary for us to resolve that issue today
because these cases can be resolved through an
application of the doctrine of induced infringement.”
 In doing so, “we reconsider and overrule” BMC in
which we held that some single entity must be liable
for direct infringement for a party to be liable for
inducement.
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9. Akamai (en banc)
 Rationale
 “[T]hat there can be no indirect infringement without
direct infringement, is well settled.”
 But, “[r]equiring proof that there has been direct infringement
as a prerequisite for induced infringement is not the same as
requiring proof that a single party would be liable as a direct
infringer.” (Emphasis in original.)
 One who knowingly induces others to engage in acts
that collectively practice the patented method “has the
same impact on the patentee as a party who induces
the same infringement by a single direct infringer.”
 There is no reason to hold that the second inducer is
liable for infringement, but the first is not.
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10. Akamai (en banc)
 Rationale
 The text of § 271 (b) “is entirely consistent with this
analysis.”
 Section 271(b) is structured differently from 271(a)
 “Nothing in 271(b) indicates that the term ‘infringement’ is
limited to infringement by a single entity.”
 The legislative history of the 1952 Act
 But all they point to is 1948 testimony by Mr. Giles Rich.
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11. Akamai (en banc)
 Rationale
 Aiding and abetting liability under 18 U.S.C. § 2(a)
 Which makes one who causes an innocent party to commit
an act which, if done with the requisite intent, would
constitute an offense
 Although the primary actor is not liable
 Analogy to tort law
 Common law of joint tortfeasance
 But most citations are to a single entity
 “[I]t is unlikely that Congress intended to endorse the
‘single entity rule,’ at least for the purpose of induced
infringement ….”
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12. Akamai (en banc)
 Rationale
 Prior Aro Supreme Court case is distinguishable
 Aro held the car owner did not infringe because replacing
fabric was a permissible “repair.”
 “In a word, if there is no infringement of a patent there can be
no contributory infringer[.]” Aro, 365 U.S. at 345.
 But that does not stand “for the proposition that there can be
no induced infringement if there is actual infringing conduct
but the acts necessary to constitute the infringement are
committed by more than one party.”
 “Unlike the present case, which deals with method claims,
Aro dealt with product claims.”
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13. Akamai (en banc)
 The dissent
 Judge Newman
 Direct infringement may be by more than one entity
 “whoever” in § 271 (a) “embraces the singular and plural”
 But liability for inducement requires direct infringement
 Judge Lynn
 There can be no liability for indirect infringement without
direct infringement
 By a single actor
 Aro “expressly rejected interpreting the 1952 Act to
divorce indirect infringement from direct infringement.”
 “The Court was not just talking about underlying conduct, but
underlying liability.”
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14. Travel Sentry, Inc. v. Tropp, Nos. 2011-1023, -1367 (Fed.
Cir. November 5, 2012) (nonprecedential)
 To establish liability for 271(a) infringement of a
method claim, either one entity must perform all
steps or one entity must exercise “control or
direction” over the performance of each claim
step. Slip Op. at 13-14.
 “We 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 . . .
find that direction could be separated from
control and lead to . . . .” Id. at 15.
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15. DSU Medical, 471 F.3d 1293 (Fed. Cir. 2006) (en banc)
 DSU asked for an instruction that the inducer
need only “intend to cause the acts of the third
party that constitute infringement.”
 District court added language requiring that the
inducer “must have known or should have
known that its action would cause the direct
infringement.”
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16. DSU Medical, 471 F.3d 1293 (Fed. Cir. 2006) (en banc)
 Federal Circuit clarified that the patentee has the
burden of showing that the alleged infringer’s
actions induced infringing acts and that the
inducer knew or should have known that his
actions would induce actual infringements.
 Relied on Grokster copyright case
 Required “purposeful, culpable expression and
conduct . . . .”
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17. DSU Medical, 471 F.3d 1293 (Fed. Cir. 2006) (en banc)
 Must know of the patent. Must have “an
affirmative intent to cause direct infringement.”
“[R]equires evidence of culpable conduct ….”
Must have “specific intent and action to induce
infringement.”
 Knowledge of the acts that infringe is not
enough. Knowledge of possible infringement is
not enough.
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18. DSU Medical, 471 F.3d 1293 (Fed. Cir. 2006) (en banc)
 Federal Circuit affirmed denial of motion for new trial
 “The record contains evidence that ITL did not believe its
Platypus infringed. Therefore, it had no intent to infringe.”
 See also Kinetic Concepts, Inc. v. Blue Sky Medical
Group, 554 F.3d 1010 (Fed. Cir. 2009)
 Principal of Defendant testified that it never intended to
infringe the patents
 Another principal testified that he thought they were
practicing a public domain method
 Although “practicing the prior art” is not a patent infringement
defense, it could nullify intent requirement for inducement
 Federal Circuit upheld final judgment of non-infringement
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19. Impact of 35 U.S.C. § 298
 “The failure of an infringer to obtain the advice of
counsel with respect to any allegedly infringed
patent, or the failure of the infringer to present
such advice to the court or jury, may not be used
to prove that the accused infringer willfully
infringed the patent or that the infringer intended
to inducement infringement of the patent.”
 But it only is applicable to patents issued on or
after September 16, 2012.
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20. Takeaway thoughts
 Legal opinions
 Can be used to negate the intent requirement for
inducement, as well as to affirmatively negate willful
infringement.
 Other options
 Have Congress correct the effective date of § 298 to
be effective without regard to when a patent issued.
 But consider relying on an opinion of counsel in all events.
 There will be a round 3. Cert. petitions are due
December 28, 2012.
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21. Questions?
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