Filewrapper® | A patent, trademark, and copyright law blog - Inducing and contributory infringement

Integrating infringing component into larger product does not escape contributory infringement

Tue, 24 Mar 2009 16:53:00-0500

In a recent decision, the Federal Circuit affirmed a district court's grant of summary judgment of obviousness, but vacated and remanded the summary judgment of no contributory or inducing infringement of two other patents in suit related to recordable optical disk drive technology.

The court relied on copyright cases applying the concept of secondary liability in determining that the district court applied the wrong legal standards for determining contributory infringement and inducement. Guided by the Supreme Court decisions in Grokster and Sony, the court determined that a component that infringes in larger assembly cannot be insulated from a finding of contributory infringement, otherwise a liability loophole would exist.

Judge Gajarsa dissented. He argued the majority committed three major missteps with respect to contributory infringement. First, the alleged infringer did not sell or offer to sell the accused components as required by § 271(c). Second, the majority used an over-inclusive application of § 271(c) that directly contravened Supreme Court guidance on its interpretation. Finally, the conduct to which the majority objects related to the design and manufacture of components rather than the act of selling a component as addressed by § 271(c).

More on Ricoh Co. v. Quanta Computer, Inc. after the jump.

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ITC cannot enter limited exclusion order against non-parties

Tue, 21 Oct 2008 11:17:00-0500

In a decision last week, the Federal Circuit vacated a limited exclusion order issued by the International Trade Commission in the most recent dispute between Qualcomm and Broadcom. The case involved alleged infringement of one of Broadcom's patents relating to chips for wireless communication, specifically directed toward power saving technology. Although Qualcomm was the only respondent in the proceeding, the ITC issued a limited exclusion order ("LEO") prohibiting downstream products from being imported if they contained the accused technology.

On appeal, the Federal Circuit affirmed various findings of the ITC, including the finding that the patent was not invalid and that Qualcomm did not directly infringe the patent. However, the court vacated and remanded on the issue of induced infringement because the ITC applied the pre-DSU Medical standard for induced infringement. Also, the Federal Circuit held that the ITC exceeded its authority in issuing an LEO for downstream products against parties who are not brought as respondents in this case.

More on Kyocera Wireless Corp. v. Int'l Trade Comm'n after the jump.

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Inducement not shown when accused product can work in an infringing way but doesn't have to

Tue, 07 Oct 2008 07:40:00-0500

In a recent decision, the Federal Circuit affirmed the International Trade Commission's finding of noninfringement with respect to one patent but reversed and remanded on another. At issue was whether the defendant had imported chipsets that infringed five of the plaintiff's patents in violation of 19 U.S.C. § 1337. The action was dismissed with regard to two of the patents, as any action related to those two patents must occur in Federal Court in California due to a forum selection clause. Another patent is the subject of a separate appeal after an exclusion order was entered. The Commission adopted an administrative law judge's determination of noninfringement with respect to the remaining two asserted patents.

The Federal Circuit affirmed the determination of noninfringement for one patent, holding the patentee had presented insufficient evidence to show the accused devices necessarily infringed, and the patentee did not provide evidence of specific instances of direct infringement. The court disagreed with the ALJ's claim construction with respect to the second patent. The administrative law judge misinterpreted expert testimony on whether a control signal was required to be changeable and accordingly the court vacated the noninfringement finding with regard to one of the eight accused chips, but affirmed the finding of noninfringement with regard to the other seven even under the revised construction.

More on Broadcom Corp. v. Int'l Trade Comm'n after the jump.

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Advice of counsel evidence still relevant to intent to induce infringement

Mon, 06 Oct 2008 16:55:00-0500

In a recent decision, the Federal Circuit affirmed a jury's finding of infringement of two patents and the related injunction, but reversed the district court's claim construction and the concomitant finding of infringement regarding a third patent. The court affirmed the district court's injunction despite the fact that the patentee licensed, rather than manufactured, the claimed inventions. The injunction was affirmed largely due to the "structural nature of a design win market" typified in nascent technology designs where there are multiple standards competing for market domination, and the fact that the injunction did not take effect for 20 months after the jury verdict to permit time to develop and implement a design-around.

In addition, the Federal Circuit rejected the defendant's contention that In re Seagate changed the evidentiary burden for proving intent in the context of inducing infringement. The defendant argued that after Seagate, opinion of counsel evidence was no longer relevant to the question of intent for inducing or contributory infringement. The court held the intent necessary for an inducement finding may still be inferred from "all the circumstances." This has two requirements, as described in DSU Medical: (1) the defendant intended to cause the acts that constitute direct infringement, and (2) the defendant knew or should have known its action would cause the direct infringement. The court observed opinion of counsel evidence may reflect what the accused infringer knew or should have known, it remains relevant to the second prong of this analysis. Further, the court stated it would be "unfair to allow opinion-of-counsel evidence to serve an exculpatory function . . . and not yet permit patentees to indentify failures to procure such advice as circumstantial evidence of intent to infringe."

Here, the accused infringer obtained an invalidity opinion, but declined to waive privilege. The Federal Circuit held it was not error for the district court to instruct the jury that the lack of an opinion could be relevant to the issue of intent. The court also instructed the jury, consistent with Knorr-Bremse, that the lack of opinion was not grounds to assume the opinion would be unfavorable. As such, the instructions as a whole comported with Federal Circuit precedent, and the instructions were proper.

More detail of Broadcom Corp. v. Qualcomm Inc. after the jump.

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Federal Circuit affirms district court's decision setting aside $1.5 billion infringement verdict

Fri, 26 Sep 2008 15:52:00-0500

In a decision yesterday, the Federal Circuit affirmed a district court's grant of judgment as a matter of law based on lack of standing for one patent and non-infringement of a second patent. A jury awarded $1,538,056,702 in damages for infringement, but, as a result of the JMOL, the district court set aside the damages award.

The Federal Circuit affirmed. The court agreed with the district court that the jury lacked substantial evidence to find the claims of the first patent in suit encompassed work that was solely owned by the plaintiff based on a Joint Development Agreement. Instead, the court held that, in accordance with the terms of the agreement, the patent-in-suit was jointly owned by the plaintiff and a third party not involved in the suit. Thus, the plaintiff lacked standing to sue in the absence of the other joint owner.

The court likewise affirmed the district court's finding that there was insufficient evidence of direct infringement to support the jury's determination of inducing infringement of the second patent. There was no evidence that the accused method had actually been practiced by the accused product, and the plaintiff's expert testimony was to speculative to support a conclusion that the accused product necessarily infringed.

More detail of Lucent Techs., Inc. v. Gateway, Inc. after the jump.

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Preamble not limiting when duplicative of claim limitations and not added to overcome rejection

Wed, 16 Apr 2008 15:35:00-0500

In a recent decision, the Federal Circuit held that a district court erred in its construction of several claim terms in a patent, and as a result, vacated the district court's summary judgment of noninfringement and no invalidity. The court affirmed the district court's decisions regarding several other issues, including laches, inequitable conduct, and inventorship.

One of the claim terms at issue was in the preamble of the claims. The court noted that "if [the preamble term] is reasonably susceptible to being construed to be merely duplicative of the limitations in the body of the claim (and was not clearly added to overcome a rejection), we do not construe it to be a separate limitation."

More detail of Symantec Corp. v. Computer Assocs. Int'l, Inc. after the jump.

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Finding of induced infringement reversed: insufficient evidence of direct infringement

Wed, 12 Sep 2007 15:43:00-0500

Today, the Federal Circuit held that hypothetical instances of direct infringement are not enough to establish that a party induced direct infringement of a patent. Instead, there must be evidence of instances of actual infringement in order to establish infringement was induced if there are both infringing and non-infringing ways to operate a device. Because there was no such evidence in this case, the district court's finding of infringement was reversed, and the district court's award of damages and finding that the case was exceptional (doubling the damages and awarding attorney fees), were vacated.

More detail of Acco Brands, Inc. v. ABA Locks Mfr. Co. after the jump.

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Another patent invalid after KSR, with help from an innovative online litigation strategy

Wed, 15 Aug 2007 11:52:00-0500

Peter Zura has an interesting post about a case in the Eastern District of Texas (one of the most popular districts for patent cases to be filed) where a patent was held to be both anticipated and, failing that, obvious in light of KSR. The court also addressed the concept of joint infringement, which the Federal Circuit has yet to address in detail, and found that a showing of agency or concerted action is not required to find joint infringement. Instead, a contractual relationship may be sufficient.

Interestingly, one defendant in this case solicited prior art from members of the public on its blog to help invalidate the patent. Apparently the submissions received helped the invalidity case. [Update (8/30): The New York Times has a story about the prior art search by the defendant.] This is an interesting litigation strategy, and one that could be used by defendants in other cases as a way to expand the search for potentially relevant prior art.

Quotes from the court's decision in Advanceme Inc. v. RapidPay, LLC after the jump.

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Verifying what was already suspected to be the case "does not give rise to a patentable invention"

Tue, 10 Jul 2007 15:18:00-0500

The Federal Circuit yesterday issued a split opinion dealing with contributory infringement and post-KSR obviousness. The case involved two patents regarding hematopoietic stem cells collected from blood in the umbilical cord after the birth of a child. Such cells have shown promise in the treatment of blood-related disorders. The Federal Circuit held that the patents were obvious because the inventor's research just confirmed the opinions of the scientific community. This, according to the majority, while valuable to science, is not patentable. Judge Newman dissented for the second time in less than a week, asserting that the majority did not give sufficient weight to secondary indicia of nonobviousness, such as long-felt need, commercial success, failure of others, and unexpected results, and using hindsight to reconstruct the patented invention.

More detail of Pharmastem Therapeutics, Inc. v. Viacell, Inc. after the jump.

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Limitations of a Claim Come from the Claim Language Itself

Fri, 12 Jan 2007 14:13:00-0500

In E-Pass Technologies ("E-Pass") v. 3Com Corp., Palm Inc., palmOne, Inc. and Handspring, Inc. and Visa International Service Association and Visa U.S.A., Inc. and Palmsource, Inc. ("3Com"), the district court's holding of final summary judgment of non-infringement by 3Com was affirmed by the Federal Circuit. At issue was a patent ("the '311 patent") entitled "Method and Device for Simplifying the Use of a Plurality of Credit Cards, or the Like." E-Pass filed a complaint for patent infringement against 3Com accusing 3Com of inducing consumers to practice the steps of the patented method on its Palm VII and Palm VIIx personal digital assistant ("PDA") products. Following a claim construction that construed "electronic multi-function card" to be "a device having the width and outer dimensions of a standard credit card with an embedded electronic circuit allowing for the conversion of the card to the form and function of at least two different single-purpose cards," the district court granted 3Com's motion for summary judgment. E-Pass appealed and, on appeal, the Federal Circuit held that the district court had erred by requiring the dimensions of a standard credit card. The Federal Circuit vacated and remanded to the district court to address the issue of infringement under the proper claim construction. After remand, E-Pass filed two new infringement actions in the district court. One against Visa (Visa U.S.A., Inc. and Visa International Service Association) alleging that Visa had infringed the '311 patent by using a Palm V PDA in two demonstrations. E-Pass filed its second action against PalmSource, Inc., palmOne, Inc., and Handspring making claims of direct, induced, and contributory infringement of the '311 patent based on three new PDA product lines that had been introduced since the first action Tungsten, Zire, and Treo lines. The district court granted summary judgment of non-infringement as to all defendants resting its findings on two grounds: 1) that even under a broader construction of "card," none of the accused devices could infringe the "electronic multi-function card" limitation; 2) that E-Pass had failed to adduce sufficient evidence to support a finding that any of the defendants or their customers had practiced all the steps of the claimed method; and 3) having demonstrated no instances of direct infringement, E-Pass could not prove liability for induced or contributory infringement. In affirming the district court's grant of final summary judgment, the Federal Circuit held that the district court properly construed the limitations of the claim from the language of the claims themselves; E-Pass failed to submit any evidence that the patented method had ever been actually practiced on any Palm VII device; and that there was no evidence to show that the Palm defendants taught their customers each step of the claimed method in isolation. To read the full decision in E-Pass Techs., Inc. v. 3Com Corp., click here.

Federal Circuit considers intent required for inducing infringement en banc

Thu, 14 Dec 2006 12:20:00-0500

The Federal Circuit resolved a perceived conflict in its case law regarding the necessary level of intent required for a defendant to be found liable for inducing infringement of a patent. The court considered one subsection of DSU Medical Corp. v. JMS Co. en banc to resolve the conflict. The court held that to prove the intent necessary for liability for inducing infringement, there must be "evidence of culpable conduct, directed to encouraging another's infringement, not merely that the inducer had knowledge of the direct infringer's activities." More details of the case after the jump. [More]