Federal Circuit orders En Banc rehearing of Akamai Joint Infringement Claim

Akamai Technologies, Inc. v. Limelight Networks, Inc., (Fed. Cir. 2011) (en banc order)

The Federal Circuit has ordered an en banc rehearing of Akamai's appeal focusing on the following question:

If separate entities each perform separate steps of a method claim, under what circumstances would that claim be directly infringed and to what extent would each of the parties be liable?

Briefs of amici curiae may be filed without consent from the parties or leave of the court. This decision follows on the heels of Judge Bryson's recent public plea in McKesson for rehearing en banc on the issue of joint infringement.  The leading article on the topic is Mark A. Lemley et al., Divided Infringement Claims, 33 AIPLA Q.J. 255, 283 (2005). In that article, Lemley argues that virtually all divided infringement problems could have been prevented by better claim drafting.  To date, I have not seen a careful or complete retort to the Lemley's article.

Document:

84 thoughts on “Federal Circuit orders En Banc rehearing of Akamai Joint Infringement Claim

  1. 84

    I have explained and given you support. You continue to disagree without reviewing that support. It is virtually impossible to continue to discuss this issue on that basis.

  2. 83

    there is very little difference between infringement caused by a process of making something and determining an infringement of an article or machine patent by who made it.

    Golden discs come to mind.

  3. 80

    Anonymous, I’m not so sure you really understand exhaustion. It requires a sale under the patent. That means that the thing sold practices the essential features of the patent and is an infringement.

    Univis Lens was recently reaffirmed in the Quanta case.

    Whether the patent itself in Univis Lens was a method patent in fact is irrelevant because it is the construction of the patent given it by the Supreme Court that is relevant. That construction was that the essential steps in making the completed lens were done by the patentee in creating the lens blanks. The sale of the lens blanks was a contributory infringement. Implicitly, the making of the lens blanks as well was an infringement.

    From the point of view of the patent law, there is very little difference between infringement caused by a process of making something and determining an infringement of an article or machine patent by who made it. Similarly, if the patent is on the use of an apparatus, the consideration of infringement by use of an apparatus are the same.

    One cannot say it is an infringement for an end user to use a system, and on the other not an infringement to practice that step in using the system. The two thoughts are in conflict.

    One cannot say that it is an infringement for multiple parties to make an apparatus or product but not an infringement to for the very same parties to perform the very same steps to make the product. The infringement is the same.

    The cases and law about making and use of products and apparatus therefor are directly relevent to the issues at hand.

  4. 79

    ping,

    1) Have you read Walker’s text which I referenced?

    2) When a statute purports to be a codification, do you agree or disagree that the state of the law prior is relevant to interpretation of the statute.

    3) If Congress was trying to impose a new requirement of knowledge of the patent, wouldn’t the drafters have said so?

  5. 78

    Assume that f2 requires knowledge of the patent but f1 does not, would that satisfy you?

    Now, let’s return to fundamentals

    Um, let’s not.

    Ya just handwaived at a requires knowledge in the section ya said had no such thing.

    Try again.

  6. 77

    Ned – normally I would just drop this, but you are simply 100% wrong about Univis Lens.

    The part you’re quoting is to the SAME effect as the one I quoted to you: “We may ASSUME also, as appellees contend, that sale of the blanks by an unlicensed manufacturer to an unlicensed finisher for their completion would constitute contributory infringement by the seller. Leeds & Catlin Co. v. Victor Talking Machine Co., 213 U.S. 325, 332-33; cf. Carbice Corp. v. American Patents Corp., 283 U.S. 27, 34.” 316 U.S. at 249 (capitals added for emphasis).

    Once again, and it should be crystal clear by now: Univis Lens DOES NOT hold that a method patent can be infringed directly, or indirectly, by multiple actors. It simply was not important to the Supreme Court’s analysis, it did not factor into the analysis and the Court could not have been more clear on either point. Univis Lens does not undermine the agency limitations of divided or joint infringement. It’s an exhaustion case that prevents a patentee from profiting twice–once from the sale, and again for the alleged infringement (be it direct or indirect, doesn’t matter).

  7. 75

    Actually, e.g., Univis Lens did say that it was Contributory infringement for the party partially finishing the lens to sell the partially completed lens to the party that completes the process. Also, it was not dicta. It was necessary to holding .

    I would also urge you to read Walker’s treatise on patents published in 1889, especially at sections 405 through 408, for his discussion of inducement and contributory infringement. You will find there that the origins and basis for the doctrine was the theory of joint and several liability. That was the origin of the doctrine, making Newman entirely right in her prior opinions on this point.

  8. 74

    Yes, ping. It tracks 271(c).

    Assume that f2 requires knowledge of the patent but f1 does not, would that satisfy you?

    Now, let’s return to fundamentals. 271(a) and (b) and (c) were intended to codify the law of infringement as it existed in 1952. I contend, most naturally, that one much understand exactly what that law was in order to understand what was codified.

    Now, if I were to tell you that it was WELL ACCEPTED that both inducement to infringe and contributory infringement did not require knowledge of patent to infringe, would this be enough for you?

    I would invite you to review Walker’s 1889 treatise on patent law. It describes in sections 405 everything you wanted to know about inducement and contributory infringement. Section 377 Walker states that knowledge off the patent is not required for infringement. Nothing in the joint infringements sections is to the contrary.

    Walker’s treatise is available on Google Books.

    Now, Ping, if you can cite me Supreme Court authority between 1889 and 1952 that would have changed these fundamentals, I would be pleased to listen.

    I am at your feet, waiting for instruction.

  9. 73

    was commenting on was the necessity of you and Malcolm getting into profanity-laden personality battle

    There you go and done it again EG.

    Have ya ever seen me post in profanity? (Hint: no)

    Have ya ever seen Sunshine post in profanity to others? (Hint: yes)

    And yet here ya are again painting the blame on me.

    Now, then, abouts that “substance O my remarks” – sure ya aint bothered, but ya aint responded none wither.

    And what Markey said is at most dicta – or are ya somehow missing the fact that a blatent assumption is made at the start (which done takes care of the supposition ya be putting in all sidewise – all murky like – quite clearly he has teh premise that all actors are ASSUMED as one), AND that he says he aint making ANY pronouncement on that matter. So I AM careful in what I done say – your statement just dont fit – leastwise not until ya actually address the substance O my observations (funny, you just don’t seem ta actually get around to that, and that aint no theory).

  10. 72

    I see what you’re saying about Univis Lens, Ned. Part of the problem with relying upon Univis Lens for the proposition that direct infringement by multiple actors can be the predicate for indirect infringement is that this case is so intertwined with other issues, including patent exhaustion, resale price maintenance, and antitrust. But I do see you point that Univis Lens could be seen (in an obtuse way) as supporting the proposition that indirect infringment may be based on direct infringement by multiple actors. It’s just that the proposition is less murky in Fromson.

  11. 71

    “Now I done seen what ya had ta say about me over at teh Eskimo’s igloo and rightly, I dont cotton to you gettin things a bit out of whack.”

    You misinterpreted what I said about you and Malcolm over on IPWatchdog about you and he digressing into the fairly typical “brick bat” throwing match. I wasn’t bothered by the substance of your remarks about this case. What did bother me and what I was commenting on was the necessity of you and Malcolm getting into profanity-laden personality battle (aka an ad hominem attack). In fact, I as I stated over at IPWatchdog, I thought the debate over this case on Patently-O was quite reasonable until that point. But you can take my comments whichever way you want, it frankly doesn’t matter to me.

    Also, I’m not “making up statements about the case law” simply to fit a theory. Fromson is squarely relied upon by Linn in BMC Resources to support the premise that indirect infringement of a method claim requires direct infringement by one actor only. That’s not what Markey said in Fromson, whether or not you treat it as dicta.

    And what Markey said is more than just dicta. In Fromson, Markey didn’t have enough of a factual record (given that district court erred in its interpretation of the claim scope) to rule whether or not the accused plates had a “layer that is water insoluble, hydrophilic and organophobic” to say whether there was direct infringement and thus potentially contributory infringement. That’s all Markey said when he noted at the end of Fromson that “the determination of infringement and contributory infringement msut await complete findings in the first instance by the district court.” If Markey didn’t feel that contributory infringement of a method claim claim could be based on direct infringement by muliple actors, I doubt he would said so earlier in the opinion if the claims, as correctly construed, couldn’t be directly infringed by multiple actors. Whather you agree or diaagree what that interpretation, please be careful about sayiing that I “made up statements about the case law” to support a “theory.”

  12. 70

    The No-answer-even-though-they-dont-have-a-Homey-dont-do-answers stance be all in a rush ta be the first that dont answer.

  13. 69

    Ned-O-Gram,

    There is no obvious requirement in the statute that the US seller of the components must know of the patent

    Kinda assuming your own answer much Ned?

    From 271(f)(2):
    “…knowing that such component is so made or adapted and intending that such component will be combined outside of the United States in a manner that would infringe the patent

    Care to esplain?

  14. 68

    And, don’t you just love this:

    Lemely (if I recall correctly) filed a brief in the US Supreme Court in the rice cooker case that argued, in effect, that if one sells all the components of a patented combination to a party in the US for their assembly in the United States, that one has to know of the patent for there to be liability for the infringement of the assembler under inducement or contributory infringement theories.

    However, 271(f) makes such a sale of components to a foreign manufacturer an infringement. There is no obvious requirement in the statute that the US seller of the components must know of the patent. The case of AT&T versus Microsoft discussed in detail section 271(f), and I do not recall any discussion by the Supreme Court in that case that Microsoft had to know of the patent for there to be infringement.

    Just for the sake of completeness, Lemley also argued, if I recall correctly, that a party transferring to another party a complete infringing apparatus for resale had to know of the patent before there was liability for inducement or contributory infringement.

    In contrast, he argued in his article that a contractor is liable as a direct infringer for having the infringing apparatus made by a third-party – provided that the third-party return the finished apparatus to the contractor.

    I assume, given all the above, that Lemley would consistently argue that the contractor would not be liable for infringement for having the device made by the third-party when the device that was made was not returned to the contractor but was instead used by the assembler or sold to third parties unless, that is, the contractor had prior knowledge of the patent.

    I am thinking that the Federal Circuit cannot address the issue of multiparty infringement adequately without this whole issue viewed comprehensively, including contributory and inducement theories, and further including whether the statutes require prior knowledge of the patent to be infringement under inducement or contributory infringement theories. Since that issue is before spring court right now, they should defer deciding this case it tells Supreme Court has ruled.

  15. 67

    It is interesting just how contrary to well establish law the recent Federal Circuit (read Rader) cases have been in this area. Just read a bit from Walker on Patents, 1888, chapters 405-408 avaiable from Google Books at the below link.

    link to books.google.com

  16. 66

    I’m sorry, ANL, I thought we were having an actual discussion on legal issues. In particular, I thought we were talking about the proper interpretation of 271(b) and 271(c). I thought you said that the Supreme Court would hold, for the sake of equity, that the Federal Circuit’s bright-line interpretation of 271(b) was in error. My mistake.

  17. 65

    A new light, what apparently has happened here is that with the enactment of 271(b) and (c), which were intended to involve parties with no intimate contractual relationships, due to overlapping nomenclature, have confused traditional theories of contributory infringment. Parties have to be deemed liable of 271(a) infringement under situations where the courts would have traditionally stated that liability was for contributory infringement just to avoid the additional proof elements involved in 271(b) and (c) imposed by the statutes for “remote” transactions.

    What we need is clarification. But what this shows that legislating in areas as complicated as patent law is fraught with danger. We all should not be so eager to jump on an ride that tiger.

  18. 64

    Cy Nical,

    I believe that you think I was born yesterday.

    Do you really play me for a fool?

    to the interpretation of a statue” – I did say both law and equity are drivers for a Supreme Court decisions. Your game here in singling out a law issue is just that – a game.

    If you want to be in the same class as Ping, 6, and IANAE, I will treat you the same and refrain from discussions with you.

    If on the other hand, you wish to have an actual discussion on legal issues, than I will be happy to oblige.

  19. 63

    The point is that the Office does permit this and does issue valid (presumed so by law) patents with multiple actors for method claim steps.

    If I follow your argument, you’re saying that:

    1) The court did not enforce this method claim.
    2) Therefore, the claim is unenforceable and thus worthless.
    3) But the patent office allowed the claim, making it presumptively valid/enforceable.
    4) Therefore the contradiction between 2 and 3 means the court must have been in error.

    Is this right?

  20. 62

    … law and equity are always the two drivers for any matter before the Supreme Court …

    That’s the part I didn’t get – thank you.

    I realize you don’t have time to teach me everything about Supreme Court jurisprudence, but can you point me to a Supreme Court case where the Court applies the principles of equity to the interpretation of a statue, please? Other than a statute involving remedies, that is?

  21. 61

    Anonymous, actually the Supreme Court did say in Univis Lens that had the lens blanks been sold to a finisher by someone without a license that that would constitute contributory infringement. See the quote from the case itself opposed to the wall in reply to EG. link to patentlyo.com

    It appears to me that the so called “doctrine” that in order to have contributory infringement one must have direct infringement has, just as Judge Newman said in her dissent, as been misunderstood. For example, we have long had the doctrine that one cannot avoid “direct?” infringement by having a third-party perform one of the elements of the claim. This doctrine is as old as the hills. If the third-party is acting as an agent of the accused infringer, clearly the accused infringer is a direct infringer. But what if the third-party is an independent contractor?

    While physicians are no longer liable for infringement, imagine a claim where a procedure has multiple steps and, in the operating room, different doctors performed different of those steps. They operate as a team and they were all employed by the patient. They coordinate their actions. But none of them takes direction or is the agent or the employee of the other. Are we to say that there is no infringement?

    I’ve also pointed out that for 150 years or so we have had the concept in the patent law that one could be liable for having the product or apparatus made by third-party. I wish I could find the original case because I have read it. I don’t recall and I don’t think it’s necessary that the party making for another did so as agent. Quite often they are independent contractors. They simply use the specifications or parts provided by the contractor. Yet the contractor is liable. But why? We know that he actually didn’t make the product or apparatus. Someone else did. His liability therefore is not for direct infringement, but for contributory infringement.

    But then we see him in Lemley’s article that he says in analyzing just this case that the independent contractor must be an agent of the contracting party. Otherwise, he concludes, the doctrines of “induced infringement” and “contributory infringement” which require knowledge of the patent, and other proofs, would simply be erased from the law because liability for “direct infringement” would be imposed for simple contract relationships.

    The same brand of thinking has infected the Federal Circuit jurisprudence. It is particularly on display in the current Supreme Court rice cooker case where the manufacturing entity sold infringing rice cookers to resellers and the question is whether the manufacturing entity knew of the patent in order to be liable for the infringement of their resellers. On its face, this kind of thinking is nonsense and I have long said so. The manufacturer directly caused the reseller to infringe and this should be enough to impose liability on the manufacturer for the reseller’s infringement. Questions of knowledge of the patent or questions of whether the rice cookers had substantial non-infringing use should never come into play.

    I am very glad that the AIPLA brief agrees with me on this point.

  22. 60

    Upon reflection, I would add the point that inventions involving more than one actor are allowed.

    The point is that the Office does permit this and does issue valid (presumed so by law) patents with multiple actors for method claim steps.

    It is the court enforcement of these valid patents that needs to change to reflect the actual state of what the Office allows. As far as I know, no court has made a valid judgment that the Office is in error for allowing such claims in patents.

  23. 59

    Cy Nical,

    Thank you for asking. I mean the latter of course – my opinion would not be involved with the Supreme Court if/when the issue is before them. I thought that that would be self evident. My mistake.

    As for your second question, law and equity are always the two drivers for any matter before the Supreme Court, so I do not understand what you do not understand. Law and equity have everything to do with with everything.

    Are you asking how does the Supreme Court work? Or are you asking what will drive a decision on this particular topic. For the latter, my opinion addresses this. For the former, I am afraid that that is a subject needing far more than I can deliver here. My apologies for not being able to help you on that.

  24. 58

    The December Akamai panel decision is vacated by this order. So meanwhile what happens to the much more recent decision in McKesson (which by all appearances spawned this latest development)? Or for that matter Centillion, although it involved system claims (isn’t that one awaiting a cert petition as well?)

  25. 57

    For the sake of equity, I believe that the US Supreme Court will hold …

    You believe this for the sake of equity, or the Supreme Court will hold this for the sake of equity? If the latter, what does equity have to do with anything?

  26. 56

    My comment above about inventions involving more than one actor may be a bit unclear.

    What I mean is that inventions should be allowed that involve more than one actor performing discrete steps of a claim. Forcing claim writing to be done in view of single actor is an unnatural placement of form over substance. Such a constraint has no basis in the Constitution or in the Law. The constraint only has arisen in interpretations of the law and those interpretations should be set aside. There simply is no viable reason to straight-jacket inventions to single actor performed methods.

    I believe that a counter argument of the risk of overly broad suits against a collection of defendants who have no relationship to each other is without merit. The requirement of some relationship between the actors is enough to safeguard against this.

  27. 55

    Anonymous, You are in the right direction.

    However, as Ned, Malcom and I have debated on an earlier thread, that very question of “agency relationship” is at issue.

    For the sake of equity, I believe that the US Supreme Court will hold that such a brightline rule as has been put forth by various proponents that a strict agency relationship must be in place for contributory infringement will not be a requirement for contributory infringement. Aside from the ease of skirting any method patent if that were the case, the very notion of joint actors is debased if you actually have one actor that is fully liable (you have a recourse against that one actor). Starkly opposite what is considered above, joint liability should cover those situations in which there is NO single actor performing all the steps of a method claim, while some relationship exists between those that perform the discreet steps. The level of that relationship is the key. Further, I believe that it is a grievous error to think that inventions should not be so limited and unnaturally constrained to be only those inventions that can be performed fully by a single party. I do not see the basis for this artificial construction either in the Constitutional mandate or in the law.

    As Ping has noted at link to patentlyo.com , the very definition of “induce” captures a much larger scope of activity than the much more constrained “agency” relationship which included the notion of command and control.

    The Supreme Court has shown a willingness to use a more open definition (as they have done with “process” in the Bilski decision), and I believe that such an open reading of the word “induce” is on point.

    I happen to agree with Dennis Crouch that this is a very compelling point. And I happen to agree with you that this legal concept to associate multiple actors together as a single infringing entity is the right answer. However, that right answer is much larger than the strict agency control.

  28. 54

    Ned — first off, I meant no offense, and I certainly hope you didn’t take any. I actually think there was a lot of merit to your first post.

    Univis Lens is an exhaustion case; the licensee provided unfinished lens blanks that were later finished by unlicensed third parties, and this finishing was contended to be infringement. The Supreme Court held that the act of providing the unfinished lens blanks — directly by the licensee (and, accordingly, indirectly by the patentee) — exhausted the patentee’s right to sue for infringement per se. That’s it. The direct or indirect nature of the infringing activity by the third parties was not at issue: “In any event, we find it unnecessary, in the circumstances of this case, to decide whether, as the court below held, the patent claims can rightly be said to include the finishing of the blanks.” United States v. Univis Lens Co., 316 U.S. 241, 248 (1942).

    So, while I’ll agree that there might have been questions about whether the sale by the finisher of the lens blank was an infringement, the Supreme Court didn’t think those questions were germane to the exhaustion analysis.

    So — and with respect — Univis Lens does not apply to the question of whether there is joint infringement of a method claim.

    My point is this: No one can be liable for direct patent infringement without performing all the steps of a patented method or assembling all the elements of a patented system. Performing all but one step, or assembling all but one element is legally insufficient because then, the patent is not infringed.

    The agency requirement for joint direct infringement is simply a legal concept used to associate multiple actors together as a single infringing entity. It’s well founded concept of tort law used to attribute the acts of one to another. It’s the right answer.

  29. 53

    Although I will have to admit EG, that the Fromson case has one mighty special line in it that Ol Sunshine just gonna love:

    Fromson indicat[ed] that he did not know, and did not care, what the… structure of the resulting product might be.

    Kinda shoots down his perverse need ta now the minutely detailed structure of a software-enabled computer invention be – don’t know, don’t care – DONT MATTA.

    Configured to be good enough.

  30. 52

    EG,

    it’s more than dicta form Markey

    Um, no.

    From that same decision: the determination of infringement and contributory infringement must await complete findings in the first instance by the district court.

    Seems like “must await” means “not decided” means what you pull out here can at best be dicta.

    Now I done seen what ya had ta say about me over at teh Eskimo’s igloo and rightly, I dont cotton to you gettin things a bit out of whack, but this is now the second thread in under a week wher I be correctin you, so you just might think about that the next time ya wanna go yappin. I aint askin ya to be all chummy like ya were with Sunshine, but dont be goin and makin up statements about case law just because it fits your little theory.

  31. 51

    EG, the Feds are “bound” by both Fromson (1983 opinion, not the 1985 opinion) and Univis Lens. Their facts are similar. A method for treating an article was partially performed by one party and finished by a second. Markey in Fromson and the Supreme Court both said the partial completion by one and sale to other for finishing constituted contributory infringement.

    This from Univis Lens:

    As appellees concede, the invention of only a single lens patent is utilized in making each blank and finishing it as a lens. We therefore put to one side questions which might arise if the finisher of a particular lens blank utilized the invention of some patent other than the patent which was practiced in part by the manufacture of the blank. And we assume for present purposes, without deciding, that the patent is not fully practiced until the finishing licensee has ground and polished the blank so that it will

    Page 316 U. S. 249

    serve its purpose as a lens. But merely because the licensee takes the final step in the manufacture of the patented product, by doing work on the blank which he has purchased from the patentee’s licensee, it does not follow that the patentee can control the price at which the finished lens is sold.

    Notwithstanding the assumption which we have made as to the scope of the patent, each blank, as appellees insist, embodies essential features of the patented device, and is without utility until it is ground and polished as the finished lens of the patent. We may assume also, as appellees contend, that sale of the blanks by an unlicensed manufacturer to an unlicensed finisher for their completion would constitute contributory infringement by the seller. Leeds & Catlin v. Victor Talking Machine Co., 213 U. S. 325, 213 U. S. 332, 333; cf. Carbice Corp. v. American Patents Corp., 283 U. S. 27, 283 U. S. 34.

    But, in any case, it is plain that, where the sale of the blank is by the patentee or his licensee — here, the Lens Company — to a finisher, the only use to which it could be put, and the only object of the sale, is to enable the latter to grind and polish it for use as a lens by the prospective wearer. An incident to the purchase of any article, whether patented or unpatented, is the right to use and sell it, and, upon familiar principles, the authorized sale of an article which is capable of use only in practicing the patent is a relinquishment of the patent monopoly with respect to the article sold. Leitch Mfg. Co. v. Barber Co., 302 U. S. 458, 302 U. S. 460-461; B. B. Chemical Co. v. Ellis, 314 U. S. 495. Sale of a lens blank by the patentee or by his licensee is thus, in itself, both a complete transfer of ownership of the blank, which is within the protection of the patent law, and a license to practice the final stage of the patent procedure. In the present case, the entire consideration and compensation for both is the purchase price paid by the finishing licensee to the Lens Company.

    link to supreme.justia.com

  32. 50

    Agreed. I’d like to see a claim that can’t be avoided by careful planning in view of the Akamai decision. All you have to do is pick any step of the method claim and setup a situation in which you “invite” a third party to perform the missing step, but they’re not “required” to do so (that is, unless they want to get paid).

  33. 49

    As I read Fromson, it’s more than dicta form Markey:

    It is undisputed that Advance manufactured and sold “wipe-on” plates comprising an anodized aluminum sheet that had been treated with an aqueous solution of sodium silicate [step 1 of claimed method], and that its customers applied a diazo coating to those plates [step 2 of the claimed method]. Because the claims include the application of a diazo coating or other light sensitive layer and because Advance’s customers, not Advance, applied the diazo coating, Advance cannot be liable for direct infringement with respect to those plates but could be liable for contributory infringement.

    Both contributory and direct infringement were alleged in Fromson. Accordingly,the second sentence isn’t dicta. And the Federal Circuit is more likely to be swayed by what Markey said, then what might have been said way back when (and perhaps obliquely) by the Supreme Court in Univis Lens

  34. 47

    Tim — this is how rehearing/the court system works, in a nutshell. The short answer to your question is that 3 judges decided the initial appeal. 11 judges will “rehear” it. Included in those 11 are the 3 who decided it in the first place.

    Almost all patent cases are heard in federal trial courts throughout the country. Almost every appeal in a patent case goes the U.S. Court of Appeals for the Federal Circuit. There are 17 judges on that court — 11 “active” and 6 semiretired. When a case is appealed, a randomly-selected panel of 3 judges decides the appeal. Normally, their decision is the end of the case. In rare circumstances, the losing side can ask for all 11 active judges to “rehear” the case. This is usually only in important cases that will have effects on a lot of other cases.

  35. 46

    Anonymous: first, before we go on, explain the Supreme Court case of Univis Lens. Recall the claim at issue was a method claim. A first actor ground a lens lens blank into an approximate shape and sold the half-finished lens to opticians who finished the lens according to the prescription of the doctor. The Supreme Court held that the partial finishing of the lens blank by the patent holder or by his licensee exhausted the patent so that the patentee could not sue and therefore could not license the optician.

    What does this mean?

    Please explain in detail. I am having a very hard time understanding your point, and the holdings of the Federal Circuit, in view of this case.

    I can tell you what I think. I think that the sale by the finisher of the lens blank was an infringement.

    Do you agree?

  36. 45

    Ping, thanks for the reply but you did not answer my question.
    Attacks only come from insecure people, I’ll handle what comes.
    Tim

  37. 44

    Timmy,

    No such thing as a dumb question from a non-lawyer seeking ta understand what’s going on.

    Just be aware that ya might be lambasted by Sunshine, er, um Malcom Mooney, who has appointed himself King handwaiver and put-downer of all lesser beings (including cancer survivors, Parkinson sufferers, members of certain religious organizations and political groups).

  38. 43

    From what I’ve learned this case is being transferred to the Appeals Court in DC because of their expertise in patent law.Does that mean that a whole new set of judges will hear this?
    I am not a lawyer so this question my seem dumb.
    FBR Capitol has come to the defense of Limelight saying the odds favor Limelight because the panel judges already voted for Limelight.Will these panel judges hear the case again?

  39. 42

    Very interesting. May be the Federal Circuit will address the faulty premise in BMC Resources (that indirect infringement requires direct infringement by one actor) that Akamai is based on. See link to ipwatchdog.com .

    The premise in BMC Resources is inconsistent with the Chief Judge Markey’s opinion in the 1985 case of Fromson v. Advance Offset Plate, Inc. As correctly stated by BMC Resources, Fromson held that liability for direct infringement requires one party to perform all steps of the claimed method. But what Chief Judge Markey also made clear in Fromson was that liability for indirect infringement (e.g., contributory or inducing infringement) could be predicated on direct infringement of the claimed method, even if different steps were performed by different actors (e.g., in a two step method, the manufacturer performed the initial step, while the customer performed the remaining step). In other words, what Fromson says is that, as long as all steps of the claimed method were performed (no matter how many actors performed those steps), the direct infringement predicate necessary for indirect infringement liability was satisfied.

  40. 39

    Ned — I understand where your thought process is, but there’s an important issue with your initial premises about indirect infringement. Recall that both contributory and inducement liability requires that there be a direct infringer. That’s the reason for indirect infringement–you can’t avoid infringement liability just by having someone else infringe the claims. But a claim that can only be infringed by multiple actors can never be directly infringed, absent a finding that the multiple actors should be considered a single actor for legal purposes, i.e., agency or contract. This necessarily means that such claims can never be indirectly infringed, without a finding that the multiple actors are actually a single entity.

    The more interesting question is what patentees can do to fix these kinds of claims. Reexamination? Reissue? Does reworking a claim so that it focuses on the actions/systems of a single actor change claim scope in any way, or is it merely a technical issue arising under section 112, para. 2.? That will probably turn on the facts of each patent.

  41. 37

    No wonder you find prosecution difficult

    Nice projection sunshine – I dont find prosecution difficult. In fact it be such a breeze I gots lots O time ta poke ya with sharp sticks and see ya dance.

    and swear.

  42. 36

    NAL just had…< ?i>”

    Lolz 6 – I thought ya didnt keep track of NAL?

    You still have a thing for her dontcha? Was it the beatings she gave ya on a regular basis? Kinda remind ya of “mommy”?

  43. 35

    Luring hapless patent attorneys into a barbaric foaming rage is a tough job. But someone has got to do it!

    Did you guys hear? NAL just had her first heart attack after the Jung debacle.

  44. 32

    “so what you have is one standard for determining patentability, in which ANY manner of combining references and entities is just fine, but from an infringement perspective the existence of independent entities precludes infringement”

    Yep. The way the world was meant to be. We really do oppose you at all turns don’t we?

  45. 31

    Lemley is wrong in his premises, that is why. I need for people to focus on the issues minutely. Take it slow.

    I believe Lemley is right that for direct infringement the parties other than the accused must be employees or agents. The problem occurs when they are not, but nevertheless are operating jointly or by contract. I am trying to point out here that for nearly 200 years we have imposed strict liability for joint action and for actions taken on behalf of another by contract. Agency is not required.

    Lemley wants to IMPOSE on all multi-party cases that strict liability follows only from agency type relationships, because, he exasperatedly contends, to hold otherwise would render 271(b) and (c) superfluous.

    I, in contrast, think he and the Feds (Rader) have are completely wrong in their analysis, especially with respect to 271(b).

  46. 28

    What could possibly be gained by throwing contributory infringement into the mix, Ned?

  47. 27

    so what you have is one standard for determining patentability, in which ANY manner of combining references and entities is just fine, but from an infringement perspective the existence of independent entities precludes infringement

    So an Examiner hasn’t met his/her burden when the art cited against a multiple-actor method claim doesn’t mention contractual obligations?

  48. 25

    All overtime is suspended until further notice;

    * Hiring—both for new positions and for backfills—is frozen for the rest of the year unless an exemption is given by the Office of the Under Secretary

    Lolz – perversely, this should make 6 and his slashdot friends very happy.

  49. 24

    But never fear! By reducing spending and public services, millions of new jobs will be created!!!! Otherwise, the wealthy corporations that we rely on for our freedoms will be very very afraid to invest in anything. That’s why the stock market is at historic lows right now. We need to shrink the government back to 1830 size levels. Nobody was on welfare back then, or getting free cancer treatment entitlements from the government. It was a paradise!

  50. 23

    Should it make them less patentable under 103?

    may or may not – often the PTO engages in this same type of “divided” patentability analysis – they argue:

    reference A (entity A) shows doing X, Y, Z
    B shows doing W

    “we believe one skilled in the art would combine A and B for ….(make up a reason) to perform steps W, X, Y, Z”

    so what you have is one standard for determining patentability, in which ANY manner of combining references and entities is just fine, but from an infringement perspective the existence of independent entities precludes infringement

    thus there is a basic inequality that is being accentuated now – rarely, if ever, does one carry the day with the PTO on patentability by arguing that existence of a single actor performing the steps is what distinguishes the invention over the prior art – now if you said THAT, sure, I can see that being a limiting factor like any other prosecution estoppel argument

  51. 22

    Non Sequitur, can I ask you a question? Let’s focus on the “make” right.

    If a contractor contracts with an independent contractor to make the claimed invention and provides the independent contractor the specifications and/or parts, is the contractor guilty of

    1. Direct infringement?
    2. Inducement?
    3. Contributory infringement?

  52. 18

    Looks like the backlog’s gonna get worse:

    Message to USPTO Employees from
    Director David Kappos

    As you may know, the FY 2011 budget was signed by the president on April 15, 2011 and contains the USPTO’s appropriation through the end of this fiscal year, September 30, 2011. With the enactment of the Full-Year Continuing Appropriations Act, 2011 (Pub. Law 112-10), USPTO spending authority for FY 2011 has been limited to $2.09 billion. In view of the funding cuts reflected in the final budget and affecting the U.S. government as a whole, we will be unable to expend the additional $85-100 million in fees that we will be collecting during this fiscal year—funds that we had anticipated being able to use to fund operations this year.

    In short, the Continuing Appropriations Act for FY 2011 does not allow us to maintain spending at the levels planned for this year. Further, I am mindful of the fact that we may very well be operating at the FY 2011 level for the foreseeable future. As a result, we have had to make some difficult decisions in order to ensure the responsible stewardship of the agency. It is against that backdrop that I must reluctantly announce, effective immediately, that:

    * All overtime is suspended until further notice;

    * Hiring—both for new positions and for backfills—is frozen for the rest of the year unless an exemption is given by the Office of the Under Secretary;

    * Funding for employee training will be limited to mandatory training for the remainder of the year;

    * Funding for contracting of Patent Cooperation Treaty (PCT) search is significantly reduced;

    * The opening of the planned Nationwide Workforce satellite office in Detroit and any consideration of other satellite locations are postponed until further notice;

    * Only limited funding will be available for mission-critical IT capital investments;

    * The Track One expedited patent examination program, scheduled to go into effect on May 4, 2011, is postponed until further notice.

    In addition, all business units will be required to reduce all other non-compensation-related expenses, including travel, conferences and contracts.

    Trademark activities are unaffected and will maintain normal operations.

    I want each of you to know that we have not come by these decisions easily. I recognize that these measures will place additional burdens on your offices, your staff, and your ability to carry out the agency’s mission. However, I believe that they are absolutely necessary to ensuring that the agency can continue to operate through the remainder of this fiscal year and into FY 2012.

    I thank you for continuing cooperation and patience, and I appreciate your dedication and service during this challenging time.

    David Kappos

    Under Secretary of Commerce for Intellectual Property and Director of the USPTO

  53. 16

    Lemley never wrote a claim in his life, so of course like any other critic he has an imaginary solution to a whole bunch of theoreticals.

    Let’s see him explain:

    1) how he would have re-written the actual claims he asserts are just bad draftsmanship;

    and most importantly:

    2) how the PTO would have still signed off on patentability.

    There is also of course just the blatant hindsight bias he uses, in which he forgets that most cloud-type computing systems today are basically just distributed versions of prior architectures. That should not make them any less infringing.

  54. 15

    “me” said in the real world you may have needed to add that step to get around an Examiner objection or you simply did not foresee splitting the method between two entities.

    Everyone knows that it is the CAFC’s job to step in and correct the work of incompetent applicants.

  55. 14

    The Track One expedited patent examination program, scheduled to go into effect on May 4, 2011, is postponed until further notice. -Davi K”

    What the …?

    Oh well. The most important thing ever is that we don’t increase the deficit!!!!!!!!!!! I heard some white millionaire on TV say that over the weekend so it must be true.

  56. 13

    I agree, if you are filing a lot of system claims, you should check your malpractice insurance.

  57. 12

    “I think the real problem is that, once you rewrite a claim so that it avoids the divided infringement problem, it may no longer be novel and/or non-obvious.”

    In other words, if you draft a claim to a collection of methods rather than to a method then it is a lot easier to come up with something novel/nonobvious. And, in addition, if you have to rewrite a claim like that then it may no longer be novel and/or non-obvious.

  58. 11

    Do you have a basis for your suggestion that the “AIPLA is fundamentally correct”? If it were really so fundamental, then there wouldn’t be much disagreement, but here we are.

    What exactly does this have to do with joint infringement? I don’t think anyone is arguing that joint infringement requires knowledge of the patent.

  59. 10

    “To date, I have not seen a careful or complete retort to the Lemley’s article.”

    I think the real problem is that, once you rewrite a claim so that it avoids the divided infringement problem, it may no longer be novel and/or non-obvious.

    Dennis – may be you can ask readers to send you examples of hypothetical inventions for which it is difficult to write claims that avoid the divided infringement problem. You can then post the most interesting examples for people to solve. I will be happy to help if you think a project like this would make sense – just reply to this comment and I’ll contact you through email.

  60. 9

    Sure, all joint infringement problems can be solved by better claim draftin IN HINDSIGHT! That is the problem with academics, in the theortical ivory tower it looks easy to draft claims that would have worked – in the real world you may have needed to add that step to get around an Examiner objection or you simply did not foresee splitting the method between two entities. I guess that means we need Lemley to draft all our claims – but he can’t can he? He is not a member of the patent bar if memory serves.

  61. 8

    You heard it here first folks!

    “The Track One expedited patent examination program, scheduled to go into effect on May 4, 2011, is postponed until further notice. -Davi K”

    Tha budget’s a biotch ain’t it? A biotech silly!

  62. 7

    I just read Lemley’s article. Regardless of his remedy, the article does illustrate a central flaw in his thinking and to the extent it is attributable to the Federal Circuit, in its jurisprudence. It has to do with what is required for liablility for indirect infringement.

    Lemely discusses a 9th Circuit case regarding the make right. For 150 years, a party has been liable if he “causes” another to make the invention for him. The 9th circuit cases said as much when it held a general contractor liable for “making” when it hired an independent contractor to make the invention (per his specification, or with the parts supplied).

    Lemley went on to discuss this case as a form of “agency.” But look deeper. The independent contractor was not an agent. He was operating under a contract. He used his own skill to make. The central factor here was that there was a contract and there were specifications. That was enough for imposing liability on the general contractor.

    Because the independent contractor was not an agent of the general contractor, the general contractor did not directly infringe. But liability was imposed regardless and it was because the general contractor induced infringement.

    Now turning to the AIPLA brief to the Supreme Court in the rice cooker case now on cert there. The AIPLA argued that the one has only to induce the acts that constitute infringement, not that the inducer specifically intend to induce patent infringement by knowing of the patent.

    I suggest the AIPLA is fundamentally correct, and Lemley and the Federal Circuit to the extent they would hold otherwise, are incorrect.

    Claim drafting is not the only way forward. The Feds must do their research in a broader context than just method claims. They must review the whole arena of liability for indirect infringement that includes the use of systems, having products or apparatus or methods performed by others, and the like. None of these past regimes for indirect infringement require an agency relationship. The problems occur solely by trying to reconfigure these indirect liability cases into direct infringement cases. What this does illustrate is that indirect liability jurispruduce has gone seriously off the rails.

  63. 6

    claim drafters (especially those who say no patent needs more than 20 claims) – check your malpractice insurance and start saving for the increased premiums.

    examiners – clear your desk to get ready for a pile of claims targeted at each of the possible infringers and a pile of system claims.

  64. 5

    Bryson? Why not Newman?

    Let’s go back to BMC or was it Muniauction:

    Customer, C, uses system A, which in turn uses system B. The liability of A is in question.

    Assume A and B have a contract for B to perform services for A. To C, he is dealing with one entity, A.

    C, in turn, has a contractual relationship with A.

    On its face, C, is a direct infringer, or at least should be.

    Now, if A provided C the means for using the A system, C is an indirect infringer under both 271(b) and (c).

    All this seems obvious.

    So, what we really need to understand is why this was not so from the get go.

  65. 4

    “To date, I have not seen a careful or complete retort to the Lemley’s article.”

    There is no retort other than the person attempting to make a retort is incompetent.

  66. 3

    DC Lemley argues that virtually all divided infringement problems could have been prevented by better claim drafting. To date, I have not seen a careful or complete retort to the Lemley’s article.

    You never will see “a careful or complete retort” to Lemley’s article, for one simple reason.

  67. 2

    Great post in so far as the opportunity to self quote is amply provided for.

    Drive those numbers up baby !!

  68. 1

    I wonder which of the following two points the rehearing will turn on:

    1. as a matter of Federal Circuit law that there 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.” Slip Op. at 14.

    2. The court also rejected Akamai’s theory that Limelight’s customers are contractually required to perform the tagging step. Rather, the court stated, the contract does not obligate the customers to perform any of the method steps; instead, it “merely explains that the customer will have to perform the steps if it decides to take advantage of Limelight’s service.” Slip Op. at 16.

    I also wonder what the result might be if it were asserted that the customer is the direct infringer, and the Limelight is the agent of the customer or under a contractual obligation to the customer. After all, a sale is a contract, and in order for Limelight to get paid by the customer, Limelight has to perform all of the other steps and prepare a product that has no non-infinging use, so that the customer can complete the steps. Why should it matter if Limelight performed the steps ahead of time, and advertised its willingness to fulfill the obligation of the sale? At the time of the sale, the obligation of Limelight existed. Shouldn’t that be enough to identify the customer as the direct infringer, and permit the patentee to pursue Limelight as a joint infringer?

Comments are closed.