As the Federal Circuit explained in Hewlett-Packard Co. v. Bausch & Lomb Inc., 909 F.2d 1464 (Fed. Cir. 1990), in the Patent Act of 1952 “the single concept of ‘contributory infringement’ was divided between §§271(b) and 271(c) into ‘active inducement’ (a type of direct infringement) and ‘contributory infringement,’ respectively.” Section 271(c) states:
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 use, shall be liable as a contributory infringer.
In recent times, the phrase “suitable for substantial noninfringing use” has proven vexatious. In electronics, not only has there been a trend to pack more and more features into a single product, but more and more features are being packed into a single chip and more and more functionality into a single software program. Accordingly, where a chip or software program is increasingly likely to contain multiple noninfringing features in addition to a feature “especially made or especially adapted for use in an infringement,” does the presence of the noninfringing features negate a claim for contributory infringement because the component, let alone the final product, has a substantial noninfringing use? Until recently, the answer has been uncertain.
In Ricoh Co. v. Quanta Computer Inc., 550 F.3d 1325 (Fed. Cir. 2008), the Federal Circuit grappled with the meaning of “substantial non-infringing use,” looking to the Supreme Court’s analysis of the issue in a copyright context in Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005). As stated in Quanta:
The Grokster Court thus made clear that the purpose of the “substantial noninfringing use” exception of §271(c) is to allow determination of instances where the intent to infringe may be presumed based on the distribution of a product that has an unlawful use. Id. at 932–33. When a manufacturer includes in its product a component that can only infringe, the inference that infringement is intended is unavoidable. While selling a potentially infringing product where each component part thereof has a substantial lawful use may well be “equivocal,” id. at 932, it is entirely appropriate to presume that one who sells a product containing a component that has no substantial noninfringing use in that product does so with the intent that the component will be used to infringe. We are unable to read Grokster as suggesting that Congress intended §271(c) to eliminate this presumption in such cases where an infringing component is bundled together with something else.
The Federal Circuit concluded that: “It thus follows that Quanta should not be permitted to escape liability as a contributory infringer merely by embedding that microcontroller in a larger product with some additional, separable feature before importing and selling it. If we were to hold otherwise, then so long as the resulting product, as a whole, has a substantial non-infringing use based solely on the additional feature, no contributory liability would exist despite the presence of a component that, if sold alone, plainly would incur liability.”
While a significant step forward in reconciling the doctrine of contributory infringement with the realities of present-day manufacturing in electronics, the Quanta case stopped short of fully clarifying the level of analysis (i.e., feature, component or product) that should be applied. The preceding analysis indicates that a contributory infringement claim may lie where a component, if sold alone, would have no substantial noninfringing use. Indeed, the Federal Circuit made this explicit when it stated: “It does not follow . . . that the inclusion of a component with substantial noninfringing uses in a product that contains other components useful only to infringe a process patent can or should defeat liability for contributory infringement under §271(c).” However, the decision leaves uncertain whether there can be a claim where the infringing feature is embedded with other features, such as on a chip, and never isolated on a separate component that might be sold alone.
In Lucent Technologies Inc. v. Gateway Inc., __ F.3d __ (Fed. Cir. Sept. 11, 2009), the Federal Circuit has further resolved this issue. As stated in that case:
Thus, as framed by the parties, the main issue reduces to whether the “material or apparatus” is the entire software package or just the particular tool (e.g., the calendar date-picker) that performs the claimed method. If the former, then Microsoft prevails because the entire software package has substantial noninfringing uses. If the material or apparatus is the specific date-picker tool, then Lucent wins because that tool was “especially made or especially adapted for” practicing the claimed method.
In Lucent, the Federal Circuit upheld a jury finding of contributory infringement, stating: “Here, the infringing feature for completing the forms, i.e., the date-picker tool, is suitable only for infringing use. Inclusion of the date-picker feature within a larger program does not change the date-picker’s ability to infringe.”
Accordingly, the question of substantial non-infringing use is to be judged at the feature level, and bundling noninfringing features with an infringing feature is unlikely in the future to provide protection from a claim of contributory infringement.