Under the Akamai and Aristrocrat decisions, the “single-entity rule” for establishing direct infringement for purposes of induced infringement under 35 U.S.C. § 271(b) is gone — although it is still the yardstick by which liability for direct infringement under 35 U.S.C. § 271(a) is measured.
In a sea-change of thinking on induced infringement by the Federal Circuit in Akamai, decided last August, as reaffirmed most recently in Aristrocrat, decided last month, liability for induced infringement can now be based upon two or more unrelated entities engaging in acts that collectively practice the steps of the patented method even though no one induced entity practices all of the steps of the method.
Under previous BMC Resources precedent, which was overruled by the Akamai court, only if a single actor induced was also directly infringing the patent, either personally or vicariously, could there be liability for induced infringement.
The problem fixed by the Akamai and Aristrocrat decisions is one that is prevalent in cases involving charges of induced infringement of a method claim under 35 U.S.C. § 271(b). In many of those cases, two or more unrelated parties may be jointly practicing a patented method invention by performing all of the claimed steps between them. Under previous BMC Resources precedent, liability for induced infringement was not possible since no one party, directly or vicariously, performed all of the method steps. Under Akamai and Aristrocrat decisions, there may now be liability for induced infringement if the induced party induces the parties to engage in the acts that collectively practice all the steps of the patented method.
The Akamai and Aristrocrat decisions have made possible many scenarios of induced infringement liability which were not possible under earlier precedent. In one scenario found in both Akamai and Aristrocrat, the collective activities before the court involved a defendant who performed some of the steps of a claimed method who induced other parties to commit the remaining steps. The patent in Akamai covered a method for efficient delivery of web content consisting of placing some of a content provider’s content elements on a set of replicated servers and modifying the content provider’s web page to instruct web browsers to retrieve that content from those servers. In Aristrocrat, patents directed to gaming machines included method steps requiring two separate actors: (1) the casino via the gaming machine and (2) the player.
In another scenario found in the McKesson case, part of the Akamai decision, the collective activities before the court involved a defendant who performed no step of the method but induced other parties to collectively perform all the steps of the claimed method. In McKesson, the patent covered a method of electronic communication between healthcare providers and their patients. The steps were divided between patients, who initiate communications, and healthcare providers, who perform the remainder of the steps.
Under either scenario in which the inducing entity practices one or more but not all or none of the steps of the method, inducement liability can now be based upon the induced party inducing the entities to engage in the acts that collectively practice the steps of the patented method—and those others perform those acts. This despite the fact that neither the induced entity nor induced entities practice all of the steps of the method. As explained by the Akamai and Aristocrat courts, “[this] has precisely the same impact on the patentee as a party who induces the same infringement by a single direct infringer; there is no reason, either in the text of the statute or in the policy underlying it, to treat the two inducers differently.”
A continuing requirement and limitation on induced infringement liability is that the accused inducer act with knowledge that the induced acts constitute patent infringement. Global-Tech Appliances. This requirement remains a high burden for the patent holder to meet. For example, to meet this burden in Akamai this means that the defendant Limelight would be liable for inducing infringement if the patentee could show that (1) Limelight knew of Akamai’s patent, in addition to establishing that (2) it performed all but one of the steps of the method claimed in the patent, (3) it induced the content providers to perform the final step of the claimed method, and (4) the content providers in fact performed that final step.
To meet this burden in Aristrocrat this means that the casino could be liable for inducing infringement if the patentee could show that (1) the casino knew of Aristrocrat’s patent, in addition to establishing that (2) it performed all but one of the steps of the method claimed in the patent, (3) it induced the customers to perform the final step of the claimed method, and (4) the customers in fact performed that final step.
To meet this burden in McKesson this means that Epic can be held liable for inducing infringement if the patent holder can show that (1) Epic knew of McKesson’s patent, in addition to proving that (2) Epic induced the performance of the steps of the method claimed in the patent, and (3) those steps were performed.
Akamai and Aristrocrat decisions may not have altered the landscape of direct infringement. Direct infringement remains a strict liability tort. There is no scienter element required for direct infringement to have occurred. If one entity practices all steps he infringes the patent. The single entity may be a single entity acting alone or by or with one or more other entities acting under the direction or control of the single entity to such an extent that the act of the other entities can be attributed to the single entity as a direct infringer. But under Akamai and Aristrocrat decisions, the “single-entity rule” for establishing direct infringement for purposes of induced infringement under 35 U.S.C. § 271(b) is gone; although it is still the yardstick by which liability for direct infringement under35 U.S.C. § 271(a) is measured.
About The Juhasz Burge PC Firm
The Juhasz Burge PC Firm is a patent and intellectual property (IP) protection, counseling, licensing and litigation firm. Combining deep patent/IP experience, broad capabilities across a wide spectrum of industries and technologies, and extensive expertise in strategic counseling, The Juhasz Burge PC Firm collaborates with clients to help them better see, understand and realize the potential strategic value from their patents and intellectual property.
Paul R. Juhasz has written extensively on matters of software patents, including the Bilski software patent decision and including an amicus brief filed in the CLS Bank case; matters of diagnostic method patents, including an amicus brief filed in the Mayo case decided by the U.S. Supreme Court and now in the Ass’n for Molecular Pathology case; and licensing matters including strategic monetization of intellectual property.