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McKesson and Akami: Clarification of Legal Standards for Joint Infringement Expected Soon

Overview

The Court of Appeals for the Federal Circuit will focus on the legal standard for joint infringement in the forthcoming McKesson and Akami opinions.  Because of software’s inexorable transition from computer-readable media to network and internet distribution, these opinions significantly affect joint infringement for software inventions.

McKesson Technologies Inc. v. Epic Systems Corp., (Fed. Cir. 2011) focuses on two questions, as ordained by the en banc order:

1. If separate entities each perform separate steps of a method claim, under what circumstances, if any, would either entity or any third party be liable for inducing infringement or for contributory infringement?

2. Does the nature of the relationship between the relevant actors—e.g., service provider/user; doctor/patient—affect the question of direct or indirect infringement liability?

Akamai Technologies, Inc. v. Limelight Networks, Inc., (Fed. Cir. 2011) paraphrased McKesson’s questions in its single en banc order question:

1. 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?

Akami

At issue in Akamai is Akamai’s Patent No. 6108703 (“’703”), which uses the term “tagging” to describe prepending a URL, as suggested by Limelight’s brief: “www.provider.com/…/story.gif” may become “ghost1467.com/www.provider.com/…/story.gif”.  Limelight infringes every step but one of ‘703 by hosting the content and providing an alternate server name to its customers; the customers perform the final step by prepending the server name onto the URL.

Arguing for Akamai, Mr. Dunner’s oral argument proposed three tests:

“One test is direction or control, not ‘and control,’ ‘or control.’  The second test is concert of action.  The third test is knowingly combining steps with another.  So there are three separate tests, and in each case, there has to be knowledge of what is happening.”

Arguing for Limelight, Mr. Panner cited § 271’s sharp distinction between § 271(a)’s establishment of patent infringement as a strict liability tort, and that knowledge of infringement is required for indirect infringement under § 271(b) or § 271(c).

Judge Newman was clearly uncomfortable with this strict reading of § 271 to Limelight’s admitted desire for the customer to perform the final step.  Judge Lourie also indicated discomfort with this outcome.  However, this is exactly the arm’s length transaction contemplated by Judge Rader in BMC: “This court acknowledges that the standard requiring control or direction for a finding of joint infringement may in some circumstances allow parties to enter into arms-length agreements to avoid infringement.”  (498 F.3d at 1381.)  Indeed, that Limelight intended the result and that this portion of Limelight’s website seems to have no substantial noninfringing use (to borrow language from § 271(c)) seems to imply some degree of inequity.

McKesson

At issue in McKesson is McKesson Patent No. 6,757,898 (“‘898”), which covers a method of communication between a patient and a healthcare provider.  Defendant Epic’s software “MyChart” infringes every step of the method claim except for the first step: “initiating a communication by one of the plurality of users to the provider for information . . . .”

Mr. Joseffer restated the BMC “direction-or-control” test McKesson advanced in its brief.  He was immediately peppered with questions about his assertion that McKesson can prevail under either § 271 (a) or (b) (where § 271 (b) inducement generally requires direct infringement under § 271 (a)), but he clarified that the direction-or-control test broadens legal attribution to cover either (a) or (b).

Judge Dyk inquired about whether this method patent could be enforceable if it had been written entirely from the perspective of the doctor.  Mr. Joseffer replied that such a patent could be circumvented if the doctor asked someone in IT to perform at least one step, and explained that requiring a claim construction solution would expand multi-step method claims to an unworkable number of party subcombinations, and that no such construction could be expected to anticipate every possible scenario.

Arguing for Epic, Mr. Moore held to the Supreme Court’s decision in Aro (previously cited against Mr. Joseffer by Judge Moore), which requires performing all steps of a method patent to satisfy § 271 (a) infringement.  Mr. Moore went on to explain that § 271 (b) and (c) were created to encompass negligent or intentional acts by secondary or tertiary parties, and that statutory construction interprets their separation to preclude multiple party inducement under (a).

Judge Moore asked, “Then why would you ever file for inducement if, in your theory, the direct infringer would be the same person as the inducer because he is, in the common-law sense, making them act as his agent.  271 (b) would be superfluous in your statutory interpretation because it would be entirely encapsulated under 271 (a).”  Subsequent questioning, alas, did not clear up this apparent contradiction before the end of Mr. Moore’s time.

Conclusion

The Federal Circuit did not seem eager to adopt Akamai’s knowledge test, nor did they seem satisfied by McKesson’s argument that all patents must have a remedy.  The Judges may not find explicit support in § 271 or previous method patent cases, but seem to be open to expanding the direction-or-control test to avoid circumvention of method patents.  Though the oral arguments provided some insight the concerns of Judges Linn, Prost, Moore, Dyk, Bryson, and Newman, we are left to extrapolate the proclivities of the quieter Judges Lourie, O’Malley, Reyna, and silent Chief Judge Rader.

The outcome will have a significant effect on authoring method claims, especially as applied to software patents.  As such, we eagerly anticipate the decision, expected later this spring.

 

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