Some valid patent method claims allowed by the U.S. Patent and Trademark Office and found novel over the prior art during litigation are not enforceable when infringed. The Federal Circuit Court of Appeals has ordered an en banc rehearing of two recent cases to consider this apparent discrepancy. Usually a panel of three judges from an appeals court hears and decides an appeal based on prior case precedent. However, when the appeals court considers overruling their precedent and revising their interpretation of the law, all of the judges for that circuit hear and decide the case en banc. Thus, a change may be coming.
En banc rehearings have been ordered in Akamai Technologies, Inc. v. Limelight Networks, Inc.1 and in McKesson Technologies Inc. v. Epic Systems Corp.2 to answer the following question:
If separate entities each perform separate steps of a method claim, under what circumstances, if any, would either entity or any third party be liable for inducing infringement, contributory infringement or direct infringement of the claim.3
Several cases have addressed this question over the past few years and the answer has been “where the actions of multiple parties combine to perform every step of a claimed method, the claim is directly infringed only if one party exercises ‘control or direction’ over the entire process such that every step is attributable to the controlling party.”4 It may be thought that even though there is not infringement by a single party, there could still be indirect or joint infringement by multiple parties. However, the current law is that to find indirect or joint infringement, you must first find that one of the accused actors has committed the entire act of direct infringement.5
In the McKesson decision, two Federal Circuit judges expressed concern about this reasoning. In a concurring opinion, Circuit Judge Bryson wrote:
I agree that the decision in this case is correct in light of this court’s decisions in BMC Resources, Muniauction, and Akamai Technologies. Whether those decisions are correct is another question, one that is close enough and important enough that it may warrant review by the en banc court in an appropriate case.
In a dissenting opinion, Circuit Judge Newman wrote:
A patent that cannot be enforced on any theory of infringement, is not a statutory patent right. It is a cynical, and expensive, delusion to encourage innovators to develop new interactive procedures, only to find that the courts will not recognize the patent because the participants are independent entities. From the error, confusion, and unfairness of this ruling, I respectfully dissent.7
In another recent decision, SiRF Technology, Inc. v. International Trade Commission,8 a panel of Federal Circuit judges interpreted patent method claims to only require actions by one party, even though the appellant argued several parties were involved. With this single-party interpretation, the method claims were enforceable and the appellant was found to infringe.
Brief summaries of the Akamai, McKesson and SiRF cases are provided below, followed by the current conclusion. We look forward to the en banc rehearings by the Federal Circuit on joint infringement to find out whether a new conclusion is warranted.
Akamai Technologies, Inc. v. Limelight Networks, Inc.
Akamai, a licensee of Massachusetts Institute of Technology, accused Limelight of infringing method claims in three of their patents. Akamai and Limelight are competitors that both provide content delivery networks and services to deliver web page content for their customers. The Akamai patents claim methods to speed the delivery of web page content over the Internet using “tagging.” The method claims of the Akamai patents include a step of “tagging” the content.
Limelight, aware of the Akamai patents, has clauses in their customer contracts that inform Limelight customers that the customer has to: (1) choose the content to be stored on the Limelight content delivery network, and (2) tag the content for storage on the Limelight content delivery network. Limelight provides technical assistance to help their customers perform these steps. Thus, Limelight’s customer performs the “tagging” step of the method claims and Limelight performs the remaining steps. Together Limelight and its customers perform every step of the Akamai method claims.
The court found that Limelight’s “contract does not obligate Limelight’s customers to perform any of the method steps. It merely explains that the customer will have to perform the steps if it decides to take advantage of Limelight’s service.”9 Therefore, Limelight did not “direct or control” their customers. Since the method steps are performed by multiple parties and neither “directs or controls” the other, neither party was found liable for infringement.
McKesson Technologies Inc. v. Epic Systems Corp.
McKesson owns a patent claiming a method for electronic communication between healthcare providers and patients involving personalized web pages for doctors and their patients. Epic licenses software that enables doctors to set-up personalized web pages for their patients. The McKesson patent claims methods in which a patient initiates communication with their personalized web page, and the web page automatically responds to the communication with information from their healthcare provider.
The doctor using the Epic software (Epic’s customer/licensee) performs each of the steps of the McKesson method claims except for the step in which the patient initiates communication with their personalized web page. Neither the doctor nor Epic requires patients to use their personalized web page. Therefore, neither the doctor nor Epic “directs or controls” the patients. The majority held that since the method steps are performed by multiple parties and none of the parties “directs or controls” the other, none of the parties are liable for infringement.10
SiRF Technology, Inc. v. International Trade Commission and Broadcom Corp.
Broadcom owns several patents for global positioning system (GPS) devices and methods. The Broadcom patents have method claims that include steps of receiving satellite signals at a receiving station, transmitting portions of the satellite signals to remote GPS devices, and the remote GPS devices further processing the received portions of the satellite signals. SiRF sells integrated circuit chips for GPS devices, and SiRF’s customers use these chips in end user GPS devices. SiRF also provides GPS data to its customers, and its customers supply location data to the end user GPS devices.
SiRF argued that the end user performed the steps on the end user GPS device, and its customer performed the steps of communicating with the end user GPS device. Thus there are multiple parties performing the method steps and, as in the above cases, no infringement liability should be found. However, the court disagreed.
First, the court found that the steps of communicating with the end user GPS device were from the SiRF servers to their customer servers to the end user GPS devices. Since the claims did not require direct communication, this indirect communication initiated by the SiRF servers satisfied these claim steps of communicating with the end user GPS device.11 Second, the court found that even though the processing at the end user GPS device required activating or enabling the end user device, the processing itself was performed by the SiRF chips and accompanying software.12 The court construed “the ‘processing’ ... steps of the asserted claims as taking place in a GPS receiver that is enabled and ready to process data.”13 With this interpretation of the claim language, the court found “SiRF performs all of the claim limitations of [the asserted claims], and therefore directly infringes the asserted claims.”
At this point, valid patent method claims that require the combined actions of multiple parties are not enforceable, unless one party “controls or directs” the other parties. Carefully drafted method claims that only require the actions of a single party can be enforceable. We await the en banc rehearings by the Federal Circuit of the Akamai and McKesson cases to find out whether the playing field will change and valid method claims requiring the combined actions of multiple parties will also be enforceable.