Posts Tagged: "inducement"

Recently the Federal Circuit has been interpreting 25 U.S.C. 271(b) to mean that unless the accused infringer directs or controls the actions of the party or parties that are performing the claimed steps, the patentee has no remedy, even though the patentee’s rights would be plainly being violated if the actions of the various partiers were combined. The Federal Circuit decided to go a different route and broke with that line of cases, specifically saying: “We now conclude that this interpretation of section 271(b) is wrong as a matter of statutory construction, precedent, and sound patent policy.” But there were 5 of the 11 Federal Circuit Judges dissenting, and very adamantly so.

Mirror Worlds also alleged that Apple induced its customers to infringe claim 13. The infringement theory in play here is called inducement and is found in 35 U.S.C. § 271(b): a party who “actively induces infringement of a patent shall be liable as an infringer.” Inducement, however, requires that there be a showing of an underlying act of direct infringement. This does not require that Apple themselves engaged in direct infringement, otherwise direct infringement and inducement would be one and the same theory, which they are not. Nevertheless, in order for there to be inducement each and every step of the claim in question must be performed.

In Akamai Technologies and McKesson Technologies (August 31, 2012), with an opinion over 30 pages long, a bare six judge per curiam majority found it unnecessary to resolve the joint infringement issue. Instead, the per curiam majority ruled that the Akamai Technologies and McKesson Technologies cases should be resolved by applying the doctrine of inducing (indirect) infringement under 35 U.S.C § 271(b). The majority also ruled that such indirect infringement could occur as long as all steps of the a claimed method are performed, but didn’t requiring that all steps be performed by a single actor, expressly overruling the 2007 case of BMC Resources v. Paymentech, and at least implicitly overruling the 2008 case of Muniauction, Inc. v. Thomson Corp. (no joint infringement of patented electronic method for conducting auctions of financial instruments where auctioneer and bidder each perform some but not all of the steps).

The Federal Circuit’s recent decision in SEB S.A. v. Montgomery Ward & Co., Inc. (Fed. Cir. Feb. 5, 2010) (“SEB”) addresses a defendant’s liability for inducement as well as for direct infringement. It is significant in that it may expand the scope of infringement liability, particularly for foreign defendants, in multiple respects.  What follows is an Executive Summary of SEB…