Debate on Joint/Divided Infringement Doctrine Continues

Patent, ,

by Dennis Crouch

Move, Inc. v. Real Estate Alliance (REAL) (Fed. Cir. 2013)

REAL owns U.S. Patent No. 5,032,989 that covers a computerized map-based system for locating available real estate.  Although the patent is now expired, MOVE filed a declaratory judgment action to stop REAL from pursuing back-damages.

Claim 1 appears to read on most online real-estate systems.  The method includes the following steps:

(a) creating a database of the available real estate properties;
(b) displaying a map of a desired geographic area;
(c) selecting a first area having boundaries within the geographic area;
(d) zooming in on the first area of the displayed map to about the boundaries of the first area to display a higher level of detail than the displayed map;
(e) displaying the first zoomed area;
(f) selecting a second area having boundaries within the first zoomed area;
(g) displaying the second area and a plurality of points within the second area, each point representing the appropriate geographic location of an available real estate property; and
(h) identifying available real estate properties within the database which are located within the second area.

REAL’s problem, of course, is on the question of divided infringement. The accused infringers “create the database” while independent users select the various areas.  In that situation, neither party could be considered a “direct infringer” under the traditional Federal Circuit rule that direct infringement occurs only when a single actor performs each and every element of an asserted claim. 

Of course the law has changed somewhat since the district court’s January 2012 dismissal of the case.  In August 2012, the Federal Circuit issued its en banc rulings in the parallel cases of Akamai Tech. v. Limelight Networks, 692 F.3d 1301 (Fed. Cir. 2012) and Mckesson Tech. v. Epic Systems (Fed. Cir. 2012). In those cases, the court expanded the potential for liability for so-called divided-infringement under the rubric of inducement. In particular, to prove inducement liability, “it is no longer necessary to prove that all the steps were committed by a single entity."

On appeal, the Federal Circuit agreed that there is no direct infringement. “If the performance of those steps is not attributable to Move, then Move cannot be directly liable for infringing REAL’s asserted method claim.”  However, the court remanded on the question of inducement:

We conclude that the district court legally erred by not analyzing inducement under 35 U.S.C. § 271(b). Recently, sitting en banc in Akamai, we clarified the law on inducement. We explained that all the steps of a claimed method must be performed in order to find induced infringement, but that it is not necessary to prove that all the steps were committed by a single entity. In so holding, we overruled the holding in BMC that in order for a party to be liable for induced infringement, some other entity must be liable for direct infringement.

On remand, REAL may be able to prove that it induced users to act in a way that completed all of the claimed step.  However, inducement raises some difficulty because it also requires that the accused inducer have knowledge of the patent (or be willfully blind) and have intended for their actions to induce the infringement.
 
In the background, both Akamai and Epic Systems have filed pending petitions for Supreme Court review. Epic’s question is most pointed: “Whether a defendant may be held liable for inducing infringement of a patent that no one is liable for infringing.” Akamai has asked the Supreme Court to push the envelope on direct infringement by holding that concerted action by two parties can result in direct infringement liability.  Those cases are at the petitions stage and briefing is ongoing.
In the past, I have suggested that liability should persist based upon infringement by conspiracy.