PATENT LAW Randy Canis CLASS 12 Infringement pt

PATENT LAW Randy Canis CLASS 12 Infringement pt. 2 1

Review from Last Week Let’s start with a review from last week to get us up to limitations on the doctrine of equivalents 2

Infringement • • A patent grants to patent owner rights of exclusion, i. e. , to prevent infringement, by excluding others from making excluding others from using excluding others from selling excluding others from offering for sale in the United States or importing into U. S. 3

§ 271. Infringement of patent: (a) Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent. 4

Infringement can be: • • making without selling or using, or using without making or selling, or selling without making or using, or offering for sale without making or selling 5

Infringement cannot occur if: • • patent is expired (20 yr. fm FD) patent is not being maintained patent claims subject to terminal disclaimer (earlier patent expired? ) • patent is not valid • claims were fraudulently obtained by inequitable conduct 6

Infringement does not occur • If product or process made or used w/o authority for experimental or other nonprofit purposes (EXCEPTION: Filing NDA is infringement, discussed later) • as long as activity is NOT carried out for a commercial purpose • or where no intent to profit or to do business based upon experiment • or for purpose of getting data for FDA application? See Intermedics case • if excluded by Sec. 271(e)(1), infra. 7

Infringement does not occur when: • Use of a patented product is on a vessel, aircraft or vehicle temporarily present in the United States. • Example: fish processing aboard ship using a patented process • Example: patented device travels and/or is used in foreign aircraft flown to and from U. S. 8

Infringement may not occur • Of a foreign patent by making, using or selling in the United States • A publication (e. g. , foreign or intl. published patent) is copied in U. S. • Exception: Omnibus Reform Act: published US applications can be held to be infringed subject to later issuance of patent 9

Infringement does not occur when: • One who purchases a patented product from one with authority to sell it for use in the United States uses that product or sells that product • Example: Patented electric motor bought from motor maker or distributor then used in solar-powered car 10

Infringement does not occur when: • One who purchases a patented product from one with authority to sell it for use in the United States: • purchaser makes repairs on the product necessary for continued use BUT • purchaser may NOT reconstruct a completely spent product (Infringes!) 11

Infringement Defenses • Plaintiff is not a proper party to bring suit • Plaintiff is not the patent owner or exclusive licensee of the patent owner and authorized by owner to bring suit • Patent or patent term has expired • Patent has lapsed for failure to pay maintenance fees • Defendant has not performed the acts alleged 12

Infringement Defenses • Defendant was not a party to the acts of infringement alleged • Defendant was authorized to perform the acts alleged to be infringing: – By agreement with patent owner or owner's agent – Acting under a plaintiff’s license to another party • No claim of patent reads on allegedly infringing item 13

Infringement Defenses • Even where no literal infringement, no claim of patent can be construed to cover allegedly infringing item under doctrine of equivalents • Patent is invalid because – – It claims unpatentable subject matter Named inventor is not the true inventor Inventor made false material statement Inventor/others violated duty of candor, e. g. in failing to disclose material prior art 14

Infringement Defenses • Invention was anticipated by prior art (i. e. was not novel in view of the prior art) • Invention is obvious over prior art to PHOSITA at the time of the invention (PHOSITA: Person having ordinary skill in the art of the invention) 15

Infringement Defenses Standards • Prior art is determined in reference to the effective filing date, taking into account claims of priority. • Patent “is born valid” so- • Burden is on accused infringer to introduce pertinent prior art or false statement and to demonstrate its materiality. 16

Infringement from use? • Chiefly an issue of method or process • Issue of “use'' of invention rarely arises except in patented method or process • Mere possession of pat’d device n. i. • But sales demos/displays may infringe • Whether sales demos or displays are “uses'' not so relevant because since 1996, “offer to sell'' is an infringement 17

Infringement Under the Doctrine Equivalents • First Inquiry - Does a device or method literally infringe one or more claims of a patent? • Second Inquiry - Does a device or method infringe one or more claims of a patent under the doctrine of equivalents (DOE)? 18

Direct Infringement • Graver Tanks v. Linde Air Products Co. – “The essence of the doctrine [of equivalents] is that one may not practice a fraud on the patent. … – “What constitutes equivalency must be determined against the context of the patent, the prior art, and the particular circumstances of the case. … – “A finding of equivalence is a determination of fact. …” 19

What is direct infringement? • Graver Tank & Mfg. Co. v. Linde Air Products Co. , 339 U. S. 605, 85 USPQ 328 (1950), said "In determining whether an accused device or composition infringes a valid patent, resort must be had in the first instance to the words of the claim. If accused matter falls clearly within the claim, infringement is made out and that is the end of it. '' 20

What if not literal infringement? • Graver Tank: "But courts have also recognized that to permit imitation of a patented invention which does not copy every literal detail would be to convert the protection of the patent grant into a hollow and useless thing. . Outright and forthright duplication is a dull and very rare type of infringement. ” 21

Graver Tank Said the Supreme Court: "To prohibit no other would place the inventor at the mercy of verbalism and would be subordinating substance to form. It would deprive him of the benefit of his invention and would foster concealment rather than disclosure of inventions, which is one of the primary purposes of the patent system. ” 22

Doctrine of Equivalents Graver Tank: "The doctrine of equivalents evolved in response to this experience. The essence of the doctrine is that one may not practice a fraud on a patent. . ” 23

If not literally the same, is accused device equivalent? Graver Tank: "What constitutes equivalency must be determined against the context of the patent, the prior art, and the particular circumstances of the case. " 24

Graver test for equivalence: FUNCTION-WAY-RESULT* Graver Tank: "If two devices do the same work in substantially the same way, and accomplish substantially the same result, they are the same, even though they differ in name, form or shape. ” *FWR 25

A more recent test for equivalence • To the Graver Tank v. Linde Air Products FWR test was added: • test of “substantial differences” by U. S. Supreme Court in • Warner-Jenkinson Co. v. Hilton Davis Chemical Co. , 520 U. S. 17, 37, 41 USPQ 2 d 1865, 1874 (1997). 26

Warner-Jenkinson Company v. Hilton Davis Chemical Co. • Procedural Background • Factual Background • Issue: – How did the ’ 52 Patent Act change the Doctrine of Equivalents? Clarifying the proper scope of the doctrine of equivalents. 27

Warner-Jenkinson Company v. Hilton Davis Chemical Co. • Let’s talk about… – What is the doctrine of equivalents? – Why do we have the doctrine of equivalents? 28

Warner-Jenkinson Company v. Hilton Davis Chemical Co. • The Doctrine of Equivalents – “… [A] product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is ‘equivalence’ between the elements of the accused product or process and the claimed elements of the patented invention. ” 29

Warner-Jenkinson Co. v. Hilton Davis • Supreme Court said: “The trial court used the threepronged function-way-result test (FWR) in Graver Tank for its doctrine of equivalents analysis. This court has recently clarified en banc the proper application and context for this test. . 30

Warner-Jenkinson Co. v. Hilton Davis • “Hilton Davis says it goes too far to describe that the function-way-result test as `the test' for equivalents. . Evidence beyond function, way, and result informs application of the doctrine, which focuses on the substantiality of changes from the claims in the accused device. . 31

Warner-Jenkinson Co. v. Hilton Davis • “One of ordinary skill in the relevant art provides the perspective for assessing the substantiality of differences between the claims and the accused device. . `The test is objective with proof of the substantiality of the differences resting on objective evidence. ' …” 32

Warner-Jenkinson Co. v. Hilton Davis • In considering whethere is equivalency, determination must be made on an element-by-element basis. • That is, the differences between the claims asserted and the accused construction (or method) must be considered element by element. 33

Warner-Jenkinson Company v. Hilton Davis Chemical Co. • From Graver Tank – “"What constitutes equivalency must be determined against the context of the patent, the prior art, and the particular circumstances of the case. Equivalence, in the patent law, is not the prisoner of a formula and is not an absolute to be considered in a vacuum. It does not require complete identity for every purpose and in every respect. In determining equivalents, things equal to the same thing may not be equal to each other and, by the same token, things for most purposes different may sometimes be equivalents. Consideration must be given to the purpose for which an ingredient is used in a patent, the qualities it has when combined with the other ingredients, and the function which it is intended to perform. An important factor is whether persons reasonably skilled in the art would have known of the interchangeability of an ingredient not contained in the patent with one that was. " 34

Warner-Jenkinson Company v. Hilton Davis Chemical Co. • “Each element contained in a patent claim is deemed material to defining the scope of the patented invention, and thus the doctrine of equivalents must be applied to individual elements of the claim, not to the invention as a whole. ” 35

Warner-Jenkinson Company v. Hilton Davis Chemical Co. • What is “prosecution history estoppel” and “file wrapper estoppel? – You can’t claim that something is covered by the doctrine of equivalents if it was given up during patent prosecution. – “In our view, holding that certain reasons for a claim amendment may avoid the application of prosecution history estoppel is not tantamount to holding that the absence of a reason for an amendment may similarly avoid such an estoppel. Mindful that claims do indeed serve both a definitional and a notice function, we think the better rule is to place the burden on the patent holder to establish the reason for an amendment required during patent prosecution. ” • Does the intent of the potential infringer matter when considering the scope of the doctrine of equivalents? 36

Warner-Jenkinson Company v. Hilton Davis Chemical Co. • “The determination of equivalence should be applied as an objective inquiry on an element by element basis. … • Prosecution history estoppel continues to be available as a defense to infringement, but if the patent holder demonstrates that an amendment required during prosecution had a purpose unrelated to patentability, a court must consider that purpose in order to decide whether an estoppel is precluded. Where the patent holder is unable to establish such a purpose, a court should presume that the purpose behind the required amendment is such that prosecution history estoppel would apply. 37

Where no direct infringement, is doctrine of equivalents safe haven for the patentee? • The limitation on this doctrine of equivalents is prosecution history estoppel: patent owner may not claim equivalents infringement by device or method that includes a feature or step surrendered by amendment to the patent claim during prosecution. 38

Limitations on DOE Chapter 11. 3 • In what ways might the Doctrine of Equivalents be limited? – “All Elements” rule – Prosecution History Estoppel – Scope of Prior Art 39

“All Elements” Rule • “[T]he doctrine of equivalents can only apply to an accused product or process that contains each limitation of a claim, either literally or equivalently. ” • How is the “all elements” rule applied? 40

Pennwalt Corp v. Durand-Wayland • “[I]n applying the doctrine of equivalents, each limitation must be viewed in the context of the entire claim… ‘It is … well settled that each element of a claim is material and essential, and that in order for a court to find infringement, the plaintiff must show the presence of every element or its substantial equivalent in accused device. ’ Lemelson v. United States, 752 F. 2 d 1538…” 41

Corning Glass Works v. Sumitomo Electrical USA, Inc. • What is the invention? – Optical waveguide fibers (i. e. , a fiber optic cable with a low signal attenuation rate) • Who are the parties? – Corning – assignee of the three patents – SEI and its subsidiaries • On what grounds did the district court find infringement? 42

Corning Glass Works v. Sumitomo Electrical USA, Inc. • “Although each claim limitation may not literally be found in the accused structure, the ‘substantially the same way’ prong of the Graver Tank test is met if an equivalent of a recited limitation has been substituted in the accused device. ” 43

Corning Glass Works v. Sumitomo Electrical USA, Inc. • “‘Element’ may be used to mean a single limitation, but it has also been used to mean a series of limitations which, taken together, make up a component of the claimed invention. In the All Elements rule, ‘element’ is used in the sense of a limitation of a claim. … An equivalent must be found for every limitation of the claim somewhere in an accused device, but not necessarily in a corresponding component, although that is generally the case. ” 44

Corning Glass Works v. Sumitomo Electrical USA, Inc. • “Although each claim limitation may not literally be found in the accused structure, the “substantially the same way” prong of the Graver Tank test is met if an equivalent of a recited limitation has been substituted in the accused device. ” 45

Corning Glass Works v. Sumitomo Electrical USA, Inc. • Ruling – Affirmed. • Holding • Dicta 46

Prosecution History Estoppel • What range of equivalents are you entitled to when you amend claims during prosecution? • Hilton Davis decision added a stronger prosecution history estoppel rule. Under the new rule, where the record does not reveal the reason for a claim amendment made during prosecution, a rebuttable presumption arises that the amendment was made "for reasons of patentability. ” 47

Festo Corp. v. Shoketsu Kinzoku • Federal Circuit C. A. in Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co. considered charges that Festo's patents on "magnetically coupled rodless cylinders" were infringed under the doctrine of equivalents. 48

Festo Corp. v. Shoketsu Kinzoku • Court considered whether to apply prosecution history estoppel under its previous "flexible bar, " even if such charges were barred for the preamended claims (that is, before making the amendment during prosecution). 49

Festo Corp. v. Shoketsu Kinzoku • In an 8 -4 ruling, the en banc Federal Circuit abandoned its flexible bar and adopted a complete bar against equivalents infringement for the amended claims in the issued patent. 50

Festo Corp. v. Shoketsu Kinzoku • The Federal Circuit court in also held 11 -1 that prosecution history estoppel applies to any amendment that narrows the scope of a claim for any reason related to patentability, not just to avoid prior art. 51

Festo Corp. v. Shoketsu Kinzoku • In June 2001, the Supreme Court granted Festo's petition for certiorari, which presented the following questions: 52

Festo Corp. v. Shoketsu Kinzoku Issue #1 on Appeal at Supreme Court • Whether every claim-narrowing amendment designed to comply with any provision of the Patent Act-including those provisions not related to prior art--automatically creates prosecution history estoppel regardless of the reason for the amendment; and 53

Festo Corp. v. Shoketsu Kinzoku Issue #2 on Appeal at Supreme Court • Whether the finding of prosecution history estoppel completely bars the application of the doctrine of equivalents. 54

Festo Corp. v. Shoketsu Kinzoku • “Prosecution history estoppel requires that the claims of a patent be interpreted in light of the proceedings in the PTO during the application process. Estoppel is a ‘rule of patent construction’ that ensures that claims are interpreted by a reference to those ‘that have been cancelled or rejected. ’ … The doctrine of equivalents allows the patentee to claim those insubstantial alterations that were not captured in drafting the original patent claim but which could be created through trivial changes. ” 55

Festo Corp. v. Shoketsu Kinzoku • “When, however, the patentee originally claimed the subject matter alleged to infringe but then narrowed the claim in response to a rejection, he may not argue that the surrendered territory comprised unforeseen subject matter that should be deemed equivalent to the literal claims of the issued patent…” 56

Festo Corp. v. Shoketsu Kinzoku • “A rejection indicates that the patent examiner does not believe the original claim could be patented. While the patentee has the right to appeal, his decision to forgo an appeal and submit an amended claim is taken as a concession that the invention as patented does not reach as far as the original claim. ” 57

Festo Corp. v. Shoketsu Kinzoku Holding on Issue #1 • “… [A] narrowing amendment made to satisfy any requirement of the Patent Act may give rise to an estoppel. ” • A patentee who narrows a claim as a condition for obtaining a patent disavows his claim to the broader subject matter, whether the amendment was made to avoid the prior art (not for other reasons tangential to patentability). In either event. . . estoppel can apply as to elements narrowed by amendment. 58

Festo Corp. v. Shoketsu Kinzoku Holding on Issue #2 • Prosecution history estoppel is not a complete bar to assertion of the doctrine of equivalents. … “Warner-Jenkinson held that the patentee bears the burden of proving that an amendment was not made for a reasons that would give rise to estoppel, we hold here that the patentee should bear the burden of showing that the amendment does not surrender the particular equivalent in question. ” 59

Festo remanded to Federal Circuit - what happened there? Sept. 26, 2003, Fed. Cir. concluded that a patentee failed in part to overcome prosecution history estoppel, and sent the case back to the trial court for further fact findings on whether the accused equivalent was foreseeable at the time of the claim amendment. 60

Federal Circuit decision in Festo The en banc court elaborated the procedure for rebutting the presumption that a narrowing amendment surrendered subject matter for purposes of prosecution history. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co. , Ltd. , Fed. Cir. , No. 95 -1066, 9/26/03. 61

Federal Circuit decision in Festo Court spelled out three circumstances in which presumption could be rebutted: (1) where the accused equivalent was unforeseeable at the time of amdt. (2) where amdt. bore no more than a “tangential relation” to accused equiv. , or (3) where “some other reason” prevented patentee from describing accused equivalent in the patent appl. 62

Federal Circuit decision in Festo • The court also held that, despite factual issues relating to the skill in the art, the rebuttal of the presumption is a question of law to be determined by the court (I. e. the judge), not by a jury – and the Fed. Cir. Sent case back to trial court to determine if the amendments in question were foreseeable. 63

“Foreseeability” in Festo Whether presumption against finding of infringement under doctrine of equivalents can be rebutted depends on the forseeability of the narrowing patent amendment at the time of the amendment, not at the time of the application. Amgen Inc. v. Hoechst Marion Roussel Inc. , D. Mass. , No. 97 -10814 -WGY, 10/30/03, (Young, C. J. ) 64

The Effects of Festo. . . • Patent owners may breathe an audible sigh of relief that a doctrine of equivalents exists and it has some flexibility BUT. . . • It is now much more important to develop and clearly understand prior art BEFORE filing of application by careful searching. • WHY? 65

The Effects of Festo. . . PREPARATION OF SPECIFICATION • Application must be prepared with even greater care to be sure to describe every conceivable variation and alternative and substitute for the preferred. • Inventors must help make that true by suggesting alternatives, substitutes, modification, conceivable improvements and different routes to achieve inventive results and advantages. 66

The Effects of Festo. . . PREPARATION OF CLAIMS • Care should be taken to avoid presenting claim errors that will require amendments. • Draft claims in paragraph form to separate elements as much as possible. • Claims of various scope, form and type can be advantageous, and claim in various different ways, so as to be able to avoid amendments which may destroy doctrine of equivalents. 67

The Effects of Festo. . . PREPARATION OF CLAIMS • Different types of claims: apparatus & method; means plus function • If claims of different scope in application they can be allowed or rejected without requiring they be amended. 68

The Effects of Festo. . . • • PROSECUTION Avoid narrowing amendments, as by substituting new claims. Conduct examiner interview(s) to consider with examiner what may be acceptable. Consider filing continuation or CIP appl. Explain purpose of amending, such as for clarity or purpose other than avoiding prior art, to reduce chances that amendment will be seen as overcoming prior art. 69

Another Effect of Festo? Although Supreme Court lifted complete bar to use of doct. of equivalents imposed by Fed. Cir. , where an amdt. relating to patent-ability is made, Fed. Cir. has not make it easy for patent owners to avoid prosecution history estoppel. Because foreseeability is test at the time claims are narrowed by amendment, concern that inft. defendant will produce "hypothetical claims" literally covering accused device, drafted to make difficult for the patentee to explain why they were not included in the issued patent? 70

Other problems after Festo? Dedication Rule: A judicially created doctrine that limits scope of equivalents. How? Where subject matter disclosed in specification of application, but is outside literal scope of claims (left unclaimed), it is deemed dedicated to the public. Even doctrine of equivalents may not capture. See PSC Computer Prod. , Inc. v. Foxconn Intern'l, Inc. , 355 F. 3 d 1353 [Fed. Cir. 2004]. 71

Wilson Sporting Goods Co. v. David Geoffrey & Associates • 1990 Federal Circuit Decision • Invention – Configuration of Dimples on a Golf Ball 72

Wilson Sporting Goods Co. v. David Geoffrey & Associates • “[A] patentee should not be able to obtain, under the doctrine of equivalents, coverage which he could not lawfully have obtained from the PTO by literal claims. ” 73

Wilson Sporting Goods Co. v. David Geoffrey & Associates • “[S]ince prior art always limits what an inventor could have claimed, it limits the range of permissible equivalents of a claim. ” 74

The Reverse DOE • Starting point - If you are practicing the prior art, the claims that cover the accused product or process are invalid for obviousness or anticipation. 75

Tate Access Floors v. Interface Architectural Resources • Question - If literal infringement is found, will a DOE be considered to determine if the claims are invalid because they are covered by the prior art? 76

Experimental Use • How does the experimental use exception work? 77

No Infringement • 35 USC 271 (e) (1): It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention (other than a new animal drug or veterinary biological product (as those terms are used in the Federal Food, Drug, and Cosmetic Act and the Act of March 4, 1913) which is primarily manufactured using recombinant DNA, recombinant RNA, hybridoma technology, or other processes involving site specific genetic manipulation techniques) solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products. 78

Infringement under Sec. 271(e)(2) • (2) It shall be an act of infringement to submit-(A) an application under section 505(j) of the Federal Food, Drug, and Cosmetic Act (j)] or described in section 505(b)(2) of such Act (b)(2)] for a drug claimed in a patent or the use of which is claimed in a patent, or. . . 79

Infringement under Sec. 271(e)(2), con’d: • (B) an application under section 512 of such Act or under the Act of March 4, 1913 for a drug or veterinary biological product which is not primarily manufactured using recombinant DNA, recombinant RNA, hybridoma technology, or other processes involving site specific genetic manipulation techniques and which is claimed in a patent or the use of which is claimed in a patent, if 80

Infringement under Sec. 271(e)(2)(B), con’d: • If. . . the purpose of such submission is to obtain approval under such Act to engage in the commercial manufacture, use, or sale of a drug or veterinary biological product claimed in a patent or the use of which is claimed in a patent before the expiration of such patent. • I. e. , an NDA or ANDA 81

NDA/ANDA as infringement under Sec. 271(e)(2)(B) GLAXO GROUP v. APOTEX, INC. , No. 03 -1575 (Fed Cir. July 27, 2004) In a patent dispute, US District Court determined that dfdt Apotex’s abbreviated new drug application (ANDA) infringed patents of plaintiff; district found that defendant's ANDA filing was willful infringement is reversed. Fed. Cir. Court of Appeals held that ANDA was NOT willful infringement. (So, no attys’ fees to Glaxo. ) 82

Merck KGa. A v. Integra Life. Sciences I, LTD • “This case presents the question whether uses of patented inventions in preclinical research, the results of which are not ultimately included in a submission to the Food and Drug Administration (FDA), are exempted from infringement by 35 U. S. C. § 271(e)(1). ” 83

Merck KGa. A v. Integra Life. Sciences I, LTD • “[Congress] exempted from infringement all uses of patented compounds ‘reasonably related’ to the process of developing information for submission under any federal law regulating the manufacture, use, or distribution of drugs. ” 84

Merck KGa. A v. Integra Life. Sciences I, LTD • “At least where a drugmaker has a reasonable basis for believing that a patented compound may work, through a particular biological process, to produce a particular physiological effect, and uses the compound in research that, if successful, would be appropriate to include in a submission to the FDA, that use is ‘reasonably related’ to the ‘development and submission of information under. . . Federal law. ’ § 271(e)(1). ” 85

NTP, Inc. v. Research In Motion, LTD • District Court (E. D. VA) • Blackberry device by RIM infringed various NTP patents • Awarded NTP $53, 704, 322. 69 in damages • Enjoined further infringement by RIM, stayed the injunction pending Fed. Cir. appeal 86

NTP, Inc. v. Research In Motion, LTD • Fed Cir – Review D. C. ruling and stated D. C. : – erred in construing the claim for the “originating processor”; – correctly found infringement under 271(a); – correctly denied RIM’s motion for judgment as a matter of law (JMOL) – didn’t abused its discretion in evidentiary rules – remanded case to district court 87

NTP, Inc. v. Research In Motion, LTD • NTP alleged over forty system and method claims had been infringed by the Blackberry system • The court construed thirty-one disputed claim terms • RIM asked for summary judgment of both non-infringement and invalidity – The asserted claims, properly construed, did not read on the accused RIM system – The physical location of the “relay” component put RIM’s allegedly infringing conduct outside the reach 271 88

NTP, Inc. v. Research In Motion, LTD • “The district court agreed with NTP, holding that ‘no genuine issue of material fact’ existed as to infringement of four claims. ” … • “The case proceeded to trial on fourteen claims. … • “On every issue presented, the jury found in favor of the plaintiff , NTP. The jury found direct, induced, and contributory infringement by RIM on all asserted claims of the patents-in-suit. The jury also found that the infringement was willful. It rejected every defense proposed by RIM. Adopting a reasonable royalty rate of 5. 7%, the jury awarded damages to NTP in the amount of approximately $23 million. ” 89

NTP, Inc. v. Research In Motion, LTD • D. C. awarded – – $33 million in compensatory damages, $4 million in attorneys’ fees $2 million prejudgment interest $14 million enhanced damages • DC entered a permanent injunction against RIM, enjoining it from further manufacture, use, importation, and/or sale of all accused Black. Berry systems, software and handhelds. 90

NTP, Inc. v. Research In Motion, LTD • What happened with dispute terms of claim construction? 91

NTP, Inc. v. Research In Motion, LTD • The meat of why this case really matters… • 271(a) – “Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States, or imports into the United States any patented invention during the term of the patent therefor, infringes the patent. ” 92

NTP, Inc. v. Research In Motion, LTD • “The territorial reach of a patent right is limited, so that section 271(a) is only actionable against patent infringement that occurs within the United States. ” • “This case presents an added degree of complexity, however in that: (1) the ‘patented invention’ is not one single device, but rather a system comprising multiple distinct components or a method with multiple distinct steps; and (2) the nature of those components permits their function and use to be separated from their physical location. ” 93

NTP, Inc. v. Research In Motion, LTD • “According to RIM, the statutory requirement that all steps of the allegedly infringing activity take place ‘within the United States’ was not satisfied because the Black. Berry Relay component of the accused system was located in Canada. ” • “[The court] … found that ‘the fact that the Black. Berry relay is located in Canada is not a bar to infringement in this matter. ’ The court therefore instructed the jury that the ‘location of RIM’s Relay in Canada does not preclude infringement. ’” 94

NTP, Inc. v. Research In Motion, LTD • “… RIM’s position is that if a claim limitation of a patented system would only be met by a component of the accused system, or a step of the accused method, located outside the United States, then the entire system or method is beyond the reach of Section 271(a), even if the use and function of the whole system in operation occur in the United States. ” 95

NTP, Inc. v. Research In Motion, LTD • “The question before us is whether the location of a component of an accused system abroad, where that component facilitates operation of the accused system in the United States, prevents the application of section 271(a) to that system. ” 96

NTP, Inc. v. Research In Motion, LTD • In Deepsouth, the Supreme Court held that the export of of unassembled components of an invention could not infringe a patent under 271(a). • As a result, Congress enacted 271(f) to extend infringement to cover the export of elements of patented inventions. 97

NTP, Inc. v. Research In Motion, LTD • “The key premise in Deepsouth was that Deepsouth was not using the machines in the United States as a ‘whole operable system assembly’ because Deepsouth did not combine the components for use in the United States. ” • “The case before us can be distinguished from Deepsouth in that ‘the location of the infringement is within United States territory, not abroad as in Deepsouth. ” 98

NTP, Inc. v. Research In Motion, LTD • “Even though one of the accused components in RIM’s Black. Berry system may not be physically located in the United States, it is beyond dispute that the location of the beneficial use and function of the whole operable system assembly is the United States. ” 99

NTP, Inc. v. Research In Motion, LTD • “The claims are directed to systems and methods for sending email messages between two subscribers; the transmission is made between an originating processor and destination processor. Although RIM’s relay, which is located in Canada is the only component that satisfies the ‘interface’ of the ‘interface switch’ limitation is the asserted claims, because all of the other components of RIM’s accused system are located in the United States, and control and beneficial use of RIM’s system occur in the United States, we conclude that the situs of the “use” of RIM’s system for purposes of 271(a) is the United States. ” 100

Practice Tip • Make sure to include a system claim to support extraterritorial application 101

AT&T v. Microsoft • Ordinarily to infringe, the acts of infringement must all occur in the United States. • Issue – When computer software that is recorded onto a golden master disk and sent abroad, and the software infringes within the United States, does the act of infringement also occur Outside of the United States? • Answer – No. 102

Finding Direct Infringement • Do you have to show that a user actually used a product for a finding of direct infringement? • Moleculon Research Corp. v. CBS, Inc. , 793 F. 2 d 1261 (Fed. Cir. 1986) – circumstantial evidence of extensive puzzle sales, dissemination of an instruction sheet teaching the method of restoring the preselected pattern with each puzzle, and the availability of a solution booklet on how to solve the puzzle was sufficient 103

Damages from Contributory Infringement 104

Lucent Technologies v. Gateway, Inc. • “Here, the infringing feature for completing the forms, i. e. , the date-picker tool, is suitable only for an infringing use. Inclusion of the date-picker feature within a larger program does not change the date-picker’s ability to infringe. Because Microsoft included the date-picker tool in Outlook, the jury could reasonably conclude, based on the evidence presented, that Microsoft intended computer users to use the tool—perhaps not frequently—and the only intended use of the tool infringed the Day patent. ” 105

Divided/Joint Infringement 106

Divided/Joint Infringement Basics • Must a single party perform all actions to infringe? • What if a first party performs almost all steps, and the first party contracts with a second party to perform one or two of the steps, should the first party (or the second party) still infringe? If so, under what circumstances? • General rule – if the second party engaged with the first party to perform actions at an arms length transaction, the first party (and the second party do not infringe) 107

BMC Res. , Inc. v. Paymentech, L. P “Courts faced with a divided infringement theory have also generally refused to find liability where one party did not control or direct each step of the patented process. ” BMC Res. , Inc. v. Paymentech, L. P. , 498 F. 3 d 1373 (Fed. Cir. 2007) 108

BMC Res. , Inc. v. Paymentech, L. P • 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, i. e. , the "mastermind. " • At the other end of this multi-party spectrum, mere "arms-length cooperation" will not give rise to direct infringement by any party. 109

Muniauction, Inc. v. Thomson Corp. • “[T]he control or direction standard is satisfied in situations where the law would traditionally hold the accused direct infringer vicariously liable for the acts committed by another party that are required to complete performance of a claimed method. ” • Muniauction, Inc. v. Thomson Corp. , 532 F. 3 d 1318 (Fed. Cir. 2008) 110

Recent Case Law • Akamai Technologies, Inc. v. Limelight Networks, Inc. (Fed. Cir. 2010) • Mc. Kesson Technologies, Inc. v. Epic Systems, Corp. (Fed. Cir. 2011) • Centillion Data Systems, LLC v. Qwest Communications International, Inc. (Fed. Cir. 2011) 111

Akamai Technologies, Inc. v. Limelight Networks, Inc. • Fed. Cir. Panel Decision • From D. C. JMOL overturned jury verdict of infringement and award of $41. 5 million dollars 112

Akamai Technologies, Inc. v. Limelight Networks, Inc. • Patents at Issue – 7, 103, 645 – 6, 553, 413 – 6, 108, 703 – The patents at issue have the same specification and disclose a system for allowing a content provider to outsource the storage and delivery of discrete portions of its website content. 113

Akamai Technologies, Inc. v. Limelight Networks, Inc. • 19. A content delivery service, comprising: • area network of content servers managed by a domain other than a content provider domain; • for a given page normally served from the content provider domain, tagging the embedded objects of the page so that requests for the page objects resolve to the domain instead of the content provider domain; • responsive to a request for the given page received at the content provider domain, serving the given page from the content provider domain; and • serving at least one embedded object of the given page from a given content server in the do-main instead of from the content provider domain. 114

Akamai Technologies, Inc. v. Limelight Networks, Inc. • • • 34. A content delivery method, comprising: distributing a set of page objects across a network of content servers managed by a domain other than a content provider domain, wherein the network of content servers are organized into a set of regions; for a given page normally served from the content provider domain, tagging at least some of the embedded objects of the page so that requests for the objects resolve to the domain instead of the content provider domain; in response to a client request for an embedded object of the page: resolving the client request as a function of a location of the client machine making the request and current Internet traffic conditions to identify a given region; and returning to the client an IP address of a given one of the content servers within the given region that is likely to host the embedded object and that is not overloaded. 115

Akamai Technologies, Inc. v. Limelight Networks, Inc. • Limelight does not perform every step of the claims • The content providers of Limelight perform the tagging step • Akamai presented a theory of joint liability in that Limelight controls or directs the activities of another 116

Akamai Technologies, Inc. v. Limelight Networks, Inc. • Direct infringement of a method claim requires that a single party perform each of the steps of the claimed method • No infringement unless “one party exercises ‘control or direction’ over the entire process such that every step is attributable to the controlling party. ” 117

Akamai Technologies, Inc. v. Limelight Networks, Inc. • “The performance of a method step may be attributed to an accused infringer when the relationship between the accused infringer and another party performing a method step is that of principal and agent, applying generally accepted principles of the law of agency…” 118

Akamai Technologies, Inc. v. Limelight Networks, Inc. • Holding • “[T]here can only be joint infringement when there is an agency relationship between the parties who perform the method steps or when one party is contractually obligated to the other to perform the steps. ” 119

Akamai Technologies, Inc. v. Limelight Networks, Inc. • Court suggests – Proper claim drafting in the first place – Seek reissue patents to correct the error 120

Akamai Technologies, Inc. v. Limelight Networks, Inc. • Ruling – “Limelight did not perform all of the steps of the asserted method claims, and the record contains no basis on which to attribute to Limelight the actions of its customers who carried out the other steps, [therefore] this court affirms the finding of noninfringement …” 121

Akamai Technologies, Inc. v. Limelight Networks, Inc. • Order – Signed April 20, 2011 – En banc consideration – Previous decision is vacated 122

Mc. Kesson Technologies, Inc. v. Epic Systems, Corp. • Fed. Cir. Panel Decision • From D. C. finding of summary judgment of noninfringement – Inducement of infringement 123

Mc. Kesson Technologies, Inc. v. Epic Systems, Corp. • Patent at Issue – 6, 757, 898 – The patent at issue relates to “an electronic method of communication between healthcare providers and patients involving personalized web pages for doctors and their patients. ” 124

Mc. Kesson Technologies, Inc. v. Epic Systems, Corp. • • 1. A method of automatically and electronically communicating between at least one health-care provider and a plurality of users serviced by the health-care provider, said method comprising the steps of: initiating a communication by one of the plurality of users to the provider for information, wherein the provider has established a preexisting medical record for each user; enabling communication by transporting the communication. . . ; electronically comparing content of the communication. . . ; returning the response to the communication automatically. . . ; said provider/patient interface providing a fully automated mechanism for generating a personalized page or area within the provider’s Web site for each user serviced by the provider; and said patient-provider interface service center for dynamically assembling and delivering customer content to said user. 125

Mc. Kesson Technologies, Inc. v. Epic Systems, Corp. • Epic argued that because its customers neither directly perform the “initiating a communication” step of the asserted method claims nor exercise control or direction over another who performs this step, Mc. Kesson failed to demonstrate that a single party directly infringes the ’ 898 patent and, accordingly, could not have succeeded on its claim of indirect infringement. The district court agreed and granted [the motion of summary judgment of noninfrigement]. 126

Mc. Kesson Technologies, Inc. v. Epic Systems, Corp. • Issue on appeal – can the initiating a communication step be attributed to the My. Chart providers? – My. Chart users are not performing any of the claimed method steps as agents for the My. Chart providers. – No agency relationship… – My. Chart users are not contractually obligated to perform the method steps on behalf of the My. Chart providers 127

Mc. Kesson Technologies, Inc. v. Epic Systems, Corp. • Order – Signed May 26, 2011 – En banc consideration – Previous decision is vacated 128

Centillion Data Systems, LLC v. Qwest Communications Intl, Inc. • Fed. Cir. Panel Decision • From D. C. finding of summary judgment of noninfringement 129

Centillion Data Systems, LLC v. Qwest Communications Intl, Inc. • Patent at Issue – 5, 287, 270 – The patent at issue relates to “a system for collecting, processing, and delivering information from a service provider, such as a telephone company, to a customer. ” 130

Centillion Data Systems, LLC v. Qwest Communications Intl, Inc. • • • 1. A system for presenting information concerning the actual cost of a service provided to a user by a service provider, said system comprising: storage means for storing individual transaction records prepared by said service provider, said transaction records relating to individual service transactions for one or more service customers including said user, and the exact charges actually billed to said user by said service provider for each said service transaction; data processing means comprising respective computation hardware means and respective software programming means for directing the activities of said computation hardware means; means for transferring at least a part of said individual transaction records from said storage means to said data processing means; (cont’d on next page) 131

Centillion Data Systems, LLC v. Qwest Communications Intl, Inc. • • • said data processing means generating preprocessed summary reports as specified by the user from said individual transaction records transferred from said storage means and organizing said summary reports into a format for storage, manipulation and display on a personal computer data processing means; means for transferring said individual transaction records including said summary reports from said data processing means to said personal computer data processing means; and said personal computer data processing means being adapted to perform additional processing on said individual transaction records which have been at least in part preprocessed by said data processing means utilizing said summary reports for expedited retrieval of data, to present a subset of said selected records including said exact charges actually billed to said user. 132

Centillion Data Systems, LLC v. Qwest Communications Intl, Inc. • Centillion concedes that the claim includes both a “back-end” system maintained by the service provider (claim elements 1, 2, and 3) and a “front-end” system maintained by an end user (claim element 4). 133

Centillion Data Systems, LLC v. Qwest Communications Intl, Inc. • D. C. determined that no single party practices all of the limitations of the asserted claims. 134

Centillion Data Systems, LLC v. Qwest Communications Intl, Inc. • Use under 271(a) • “[T]o “use” a system for purposes of infringement, a party must put the invention into service, i. e. , control the system as a whole and obtain benefit from it. ” 135

Centillion Data Systems, LLC v. Qwest Communications Intl, Inc. • “[D]irect infringement by ‘use’ of a system claim ‘requires a party. . . to use each and every. . . element of a claimed [system]. ’ In order to ‘put the system into service, ’ the end user must be using all portions of the claimed invention. ” 136

Centillion Data Systems, LLC v. Qwest Communications Intl, Inc. • “The on-demand operation is a ‘use’ of the system as a matter of law. The customer puts the system as a whole into service, … By causing the system as a whole to perform this processing and obtaining the benefit of the result, the customer has ‘used’ the system under § 271(a). It makes no difference that the back-end processing is physically possessed by Qwest. The customer is a single ‘user’ of the system and because there is a single user, there is no need for the vicarious liability analysis from BMC or Cross Medical. ” 137

Centillion Data Systems, LLC v. Qwest Communications Intl, Inc. • “We also hold that the standard operation is a ‘use’ as a matter of law. The standard operation allows users to subscribe to receive electronic billing information on a monthly basis. … [I]t is the customer initiated demand for the service which causes the back-end system to generate the requisite reports. This is ‘use’ because, but for the customer’s actions, the entire system would never have been put into service. This is sufficient control over the system under NTP, and the customer clearly benefits from this function. ” 138

Centillion Data Systems, LLC v. Qwest Communications Intl, Inc. • Qwest as a direct infringer? – “To ‘use the system, Qwest must put the claimed invention into service, i. e. , control the system and obtain benefit from it. ” – “While Qwest may make the back-end processing elements, it never ‘uses’ the entire claimed system because it never puts into service the personal computer data processing means. Supplying the software for the customer to use is not the same as using the system. ” 139

Centillion Data Systems, LLC v. Qwest Communications Intl, Inc. • “The only way that Centillion can establish ‘use’ by Qwest is if Qwest is vicariously liable for the actions of its customers such that use’ by the customers may be attributed to Qwest. ” • “[W]e conclude, as a matter of law, that Qwest is not vicariously liable for the actions of its customers. Qwest in no way directs its customers to perform nor do its customers act as its agents. While Qwest provides software and technical assistance, it is entirely the decision of the customer whether to install and operate this software on its personal computer data processing means. ” 140

Divided/Joint Infringement Conclusions • Always draft claims from a single party perspective when possible • Include system claims – Write system claims that can be “used” by a single party 141

Program Completed All course materials - Copyright 2002 -12 Randy L. Canis, Esq. 142