Aristocrat Techs. Australia PTY Ltd. v. Int’l Game Tech

Addressing the issue of divided infringement in the wake of the en banc Akamai decision, the U.S. Court of Appeals for the Federal Circuit vacated and remanded the portion of a lower court’s summary judgment ruling involving indirect infringement, concluding that the plaintiff deserved an opportunity to press its indirect infringement theory with the benefit of the Court’s clarification regarding inducement. Aristocrat Techs. Australia PTY Ltd. v. Int’l Game Tech., Case No. 10-1426 (Fed. Cir., Mar. 13, 2013) (O’Malley, J.).

Aristocrat and IGT compete in the casino gaming machine industry. Aristocrat filed a lawsuit against IGT in district court, accusing IGT of infringing two patents directed to gaming machines, such as slot machines, and methods for awarding a progressive prize through a bonus game that may appear in addition to the main game. The lower court granted IGT’s motion for summary judgment of non-infringement as to all of the asserted claims of both patents, finding that the accused products required two separate actors: the casino and the player. Under Muniauction and BMC Resources (IP Update, Vol. 11, No. 7), the lower court found that the lack of single actor precluded a finding of direct infringement as a matter of law. Aristocrat appealed, and while that appeal was pending, the Federal Circuit issued its en banc ruling in Akamai (IP Update, Vol. 15, No. 9).

The Federal Circuit considered the lower court’s summary judgment ruling in the context of direct infringement and indirect infringement. On the issue of direct infringement, the Court confirmed that its Akamai decision did not address the principles of the law of divided infringement as it applied to liability for direct infringement. The law of direct infringement, the Court explained, remained unchanged: for a party to be liable for direct infringement, that party must perform all acts necessary, either personally or vicariously. Recognizing that no single actor performed all the claimed method steps in issue here, Aristocrat argued several vicarious liability theories for direct infringement, each of which were rejected by the Federal Circuit. The Court thus affirmed the lower court’s summary judgment finding of no direct infringement.

Although neither of the parties nor the district court spent any significant time addressing the question of induced infringement, the Federal Circuit saw fit to address the issue in view of its Akamai decision. The Court noted that the district court relied on Muniauction to find no direct infringement. However, based on Akamai, the Federal Circuit vacated and remanded the portion of the district court’s ruling as to indirect infringement, noting that in accordance with Akamai, it is no longer required that the patent owner prove that there has been a direct infringement for purposes of establishing indirect infringement. While the Federal Circuit did not express an opinion on the merits of Aristocrat’s indirect infringement claim, the Court noted stated that it was possible that the evidence could support a finding of induced infringement.