In This Issue
· Federal
Circuit Expands Direct Divided Infringement Analysis Of Method Claims
· Federal
Circuit Clarifies That ITC May Adjudicate Claims Of Induced Infringement In
Section 337 Actions
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Federal
Circuit Expands Direct Divided Infringement Analysis Of
Method Claims
On remand
from the Supreme Court, the Federal Circuit recently clarified en banc, in Akamai Technologies, Inc. v. Limelight Networks, Inc., that an
entity may be held liable for direct infringement under 35 U.S.C. §271(a)
even if that entity does not perform all of the steps of a claimed method. When the Federal Circuit first heard the
case, it held that the defendant, Limelight, could be liable for indirect
infringement under 35 U.S.C. §271(b) even though no single entity was liable
for direct infringement of the asserted patent(s) under 35 U.S.C.
§271(a). Thereafter, the Supreme Court
reversed the Federal Circuit, holding that there can be no indirect
infringement of a method claim without direct infringement, which requires
performance of the claimed steps by a single entity.
The Federal
Circuit’s initial decision was based upon its previous holdings that a
third-party’s conduct may be attributable to a “single entity” in the event
of a joint venture/enterprise and/or the third-party is directed or
controlled by the single entity through an agency or contractual relationship
relating to the claimed method.
After the Supreme Court remand, the
Federal Circuit clarified the analysis, and expanded direct infringement,
under Section 271(a), to include scenarios wherein the accused entity
conditions: (i) participation by a third-party in an activity; or (ii) receipt
of a benefit by such third-party upon performance of a step(s) of a claimed method
and establishes the manner or timing of such performance. The Federal Circuit also reiterated that
whether the third-party’s relationship with the single entity is sufficient
to satisfy the expanded analysis for direct infringement of a method claim is
a question of fact for the jury. While
the Akamai decision involves
electronics, the decision will have implications for other technologies as
well, when method claims are involved.
Federal Circuit Clarifies That ITC May
Adjudicate Claims Of Induced Infringement In Section 337 Actions
In an en banc decision on
appeal from the International Trade Commission (“ITC”), the Federal Circuit
overturned the previous panel holding that the ITC may exercise jurisdiction to
adjudicate claims of induced infringement. Specifically, the Federal Circuit held that, although 19 U.S.C. §337
does not expressly permit the ITC to exclude imports based upon a finding of
induced infringement, the ITC’s interpretation that the statute confers such jurisdiction
on the ITC should be accorded deference under the Chevron analysis.
By way of
background, Cross Match Technologies, Inc. filed an ITC complaint alleging
infringement of U.S. Patent No. 7,203,344 (“the ‘344 patent”) by: (i) Mentalix,
the domestic importer of scanners at issue; and (ii) Suprema, the Korean
developer of the scanners. The ITC found
direct infringement of the ‘344 patent based upon the scanners’ use of
Mentalix’ software when imported, and further that Suprema induced Mentalix
to infringe directly by actively encouraging the use of Mentalix’ software
with the scanners.
On appeal of that
finding, the first Federal Circuit panel overturned the ITC on the grounds
that Section 337 remedies may not be based upon a claim of induced
infringement where the underlying direct infringement does not occur until
importation. The Federal Circuit also
observed that the ITC’s authority to adjudicate patent infringement claims extends
to “articles that—infringe” a U.S. patent, and conducted an infringement analysis
based upon the the scanners when imported as follows: “The focus is on the infringing nature of the articles at
the time of importation, not on the intent of the parties with respect to the
imported goods.” The first Federal
Circuit panel accordingly held that direct infringement claim occurred after
importation such that the scanners were not within the ambit of Section 337. Upon
the request for rehearing en banc,
the Federal Circuit held en banc that
under the Chevron analysis the ITC’s interpretation that it may
adjudicate induced infringement claims should be accorded deference given
that Section 337 is silent on the issue.
By way of further explanation,
the Chevron analysis governs what (if any) deference a court analyzing
agency decisions should accord that agency’s interpretation of the statue at-issue. Under the two step Chevron analysis, a court first looks to the express language of
the statute to determine whether it address the issue. If the answer is affirmative, no deference
is given the agency’s interpretation, but if negative, the court looks to see
if the agency’s decision “is based on a permissible construction of the
statute.” Here, the Federal Circuit noted that Section 337 was silent on the
issue of induced infringement and held that the ITC’s interpretation should
be accorded deference given that the ITC was created to address a broad
spectrum of acts constituting unfair competition, including patent infringement.
While
this decision is particularly important for cases involving the software and
high-tech industries, which are often predicated upon induced infringement claims,
it shows that the Federal Circuit is inclined to broadly construe the ITC’s
jurisdiction such that commentators have opined that various other causes of
action, in addition to allegations of patent, trademark, and copyright
infringement, could likely be brought at the ITC. |