Further Clarification on Indirect Divided and Joint Infringement

Holding that a district court improperly applied the doctrine of joint patent infringement with respect to indirect infringement, while agreeing with the lower court’s reasoning concerning direct infringement, the Federal Circuit has vacated a summary judgment of non-infringement. Move, Inc. v. Re-Max Int’l., Inc., No. 2012-1342 (Fed. Cir. Mar. 4, 2013).

Claim 1 of U.S. Patent 5,032,989 recites “[a] method using a computer for locating available real estate properties.” Steps of the claimed method include “selecting a first area having boundaries within the geographic area” and “selecting a second area having boundaries within the zoomed first area.” The district court held that Move, Inc.’s systems did not meet these claim limitations because users, and not Move, chose search boundaries. The district court reasoned that, on Move’s websites, “a user first selects an already bounded area either by entering a zip code or by clicking on the name of a city or neighborhood, a point on a map, or a zoom bar, but then the computer merely updates the display variables to reflect the user’s selected area.” Further, there was no joint infringement “because Move did not exert direction or control over users who may have performed the selecting steps.”

After a prior appeal, the Federal Circuit had issued a claim construction order defining “selecting” as something that could be performed by either a user or a computer. The patent owner argued that the district court had ignored this order. Move argued that its computer never chose boundaries, and therefore could not infringe.

As the court noted, and as discussed previously on this blog, the en banc decision in Akamai Techs. Co. v. Limelight Networks, Inc., 692 F.3d 1301 (Fed. Cir. 2012) (en banc) dealt with indirect infringement under 35 U.S.C. § 271(b), but did not revisit “the law of divided infringement as it applies to liability for direct infringement
under 35 U.S.C. § 271(a).” Accordingly, the Federal Circuit agreed “with the district court that there is no genuine issue of material fact that Move does not control or direct the performance of each step of the claimed method.”

However, the district court, although conducting its analysis under the then-applicable rubric, erred in failing to analyze whether Move could have infringed by inducement. The Akamai decision overruled BMC Res., Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007), which had held “that in order for a party to be liable for induced infringement, some other entity must be liable for direct infringement.” Here, the District Court incorrectly held that Move could not be liable for joint infringement if it could not be liable for direct infringement as a single party. Akamai held that “liability under § 271(b) may arise when the steps of a method claim are performed by more than one entity, provided that the other requirements for inducement are met.”

Accordingly, the Federal Circuit vacated the District Court’s decision and “remanded for further proceedings consistent with this opinion.”

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