In an order granting judgment on the pleadings, Judge Louise Flanagan found that plaintiff Robert Mankes failed to sufficiently allege that defendant Vivid Seats Ltd. directly infringed or induced infringement of U.S. Patent Number 6,477,503, citing Limelight Networks, Inc. v. Akamai Technologies, Inc., 134 S. Ct. 2111 (2014), which held that induced infringement of a method claim can occur only when one party performs every step of the claim. The patent discloses a reservation system that controls inventory through a process where vendors can track and sell their limited inventory both locally and online. According to Mankes, Vivid Seats’ online services are used by professional ticket resellers and pre-screened individual sellers to allocate available ticket inventory for sale to online customers. Mankes contended that Vivid Seats practiced some of the claimed method steps through its online service and sufficiently controlled the sellers to perform the remaining steps of the invention. Because multiple parties were required to perform the claimed steps of the patent, and none of those parties were under the control of Vivid Seats, the court found that the complaint failed to state a claim for direct infringement. “The controlling rule, consistently applied by the Federal Circuit, is where multiple parties perform all the steps of a claimed method, there is no direct infringement unless one party exercises control.” After finding that Mankes failed to successfully allege direct infringement, Judge Flanagan concluded that Vivid Seats could not be liable for inducement in view of Limelight. Simply put, “[Vivid Seats] cannot be liable for inducement absent direct infringement by the [s]ellers.” Final judgment in favor of Vivid Seats was entered that same day.
Robert Mankes v. Vivid Seats Ltd., No. 5:13-CV-717 (E.D. N.C.) (February 26, 2015). [Judge Louise Wood Flanagan]