A method claim is directly infringed only if each step of the claimed method is performed.
The patentee sued for infringement of a computerized method for calculating guaranteed minimum annuity payments. The district court construed a key phrase as requiring the computer method to pay an annuity even if the annuity account’s value was exhausted. Under the district court’s construction, the annuity account value did not have to be exhausted, but the method had to ensure that when the annuity account was exhausted, the computer method still issued an annuity payment. The alleged infringer argued that its payment method did not infringe because a manual check was issued when the account was exhausted. After a jury trial finding infringement, the district court denied the alleged infringer’s motion for judgment as a matter of law.
The Federal Circuit reversed. “The law of this circuit is axiomatic that a method claim is directly infringed only if each step of the claimed method is performed.” In this case, the method was not infringed because when the annuity account was exhausted, the alleged infringer issued a manual check, not a check through the computerized system. Because each step of the method was not performed, there was no infringement.
In addition, the Federal Circuit was not persuaded by the patentee’s argument that the alleged infringer had a contractual obligation to make annuity payments when an annuity account was exhausted, explaining that “[a] contractual obligation to perform an act is not performance; indeed, a party could avoid infringement simply by breaching its contract.”
A copy of the opinion can be found here.