Source: http://www.ipwatchdog.com/2012/09/05/the-discordant-en-banc-ruling-in-akamai-technologies-and-mckesson-technologies-part-ii/id=27820/
Timestamp: 2013-05-24 18:01:00
Document Index: 155255191

Matched Legal Cases: ['§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 101', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', 'art 1']

The Discordant En Banc Ruling in Akamai Technologies and McKesson Technologies | IPWatchdog.com | Patents & Patent Law
The Discordant En Banc Ruling in Akamai Technologies and McKesson Technologies Part II* Written by Eric W. GuttagEric W. Guttag IP Law OfficePosted: September 5, 2012 @ 4:46 pm
TweetIn Part I, I discussed the per curiam majority opinion in en banc decision in Akamai Technologies and McKesson Technologies. See CAFC’s Joint Infringement Conundrum. In Part II, I’m going to discuss Judge Linn’s and Judge Newman’s dissenting opinions, followed by some concluding remarks.
Although Judge Newman’s dissenting opinion came next in the en banc decision, I’m going to discuss Judge Linn’s dissenting opinion first. That Judge Linn was the author of this dissenting opinion is unsurprising, given that he had authored the now overruled BMC Resources opinion, as well as the panel opinion in McKesson Technologies. What is somewhat surprising is the strident tone that Judge Linn used to characterize the per curiam majority opinion: “this court assumes the mantle of policy maker.” Not satisfied with applying that moniker alone, Judge Linn also accused the per curiam majority of “effectively rewrite[ing]” 35 U.S.C § 271(a) and 35 U.S.C § 271(b). (In that regard, I think Judge Linn’s accusation goes a bit overboard).
In challenging the correctness of the per curiam majority ruling, Judge Linn’s dissenting opinion makes four points. Point No. 1 is that the per curiam majority’s approach “is contrary to both the Patent Act and the Supreme Court’s longstanding precedent that “if there is no direct infringement of a patent there can be no contributory infringement,” citing Aro Manufacturing and Deepsouth Packing, as well as the Federal Circuit’s Joy Technologies. But as discussed above, none these cases specifically holds that direct infringement of the claimed method for the purposes of liability for indirect infringement requires that all steps of the claimed method must be performed by a single actor. Judge Linn’s further assertion that, in enacting 35 U.S.C §§ 271(e)(2), (f), and (g), “Congress did not give the courts blanket authority to take it upon themselves to make further policy choices or to define ‘infringement’” still doesn’t address why direct infringement for the purposes of indirect infringement liability requires all infringing acts to be performed by a single actor. (As I discuss below, enactment of 35 U.S.C §§ 271 (f) and (g) also reflects Congress’ intent to close “loopholes” in the primary infringement statute, 35 U.S.C §§ 271 (a)). Judge Linn also makes the comment that Congress “removed joint-actor patent infringement liability from the discretion of the courts” in 1952, but cites to absolutely no legislative history to support this comment.
In support of Point No. 1, Judge Linn also challenges the per curiam majority view that the direct infringement predicate has been established to support indirect infringement liability “even though [35 U.S.C §] 271(a)’s requirements are not satisfied.” Judge Linn’s view of the impact 35 U.S.C § 271(a) on indirect infringement liability is not necessarily incorrect. But that view also assumes that direct infringement for the purposes of indirect infringement liability under 35 U.S.C § 271(b) is controlled by 35 U.S.C § 271(a). Nowhere does 35 U.S.C § 271(a) say that it defines “infringement” for the purposes of any of the other subsections, including 35 U.S.C § 271(b), nor does 35 U.S.C § 271(b) refer to 35 U.S.C § 271(a) for such a definition of “infringement.” In fact, as I observed in my 2007 article cited above, 35 U.S.C § 271 is an essentially a “patchwork” of individual subsections that operate almost independently of each other. (In this regard, I find Judge Linn’s comment that “Congress carefully crafted subsections (b) and (c)” of 35 U.S.C § 271 to be somewhat ironic.)
Point No. 2 argues that the per curiam majority “impermissibly bends the statute to define direct infringement differently for the purposes of establishing liability under [35 U.S.C.] §§ 271(a) and (b).” But I’m not sure “bending” is the correct characterization as opposed to having a different take on what “direct infringement” means with respect to other subsections of 35 U.S.C. § 271, such 35 U.S.C. § 271(b). Judge Linn’s argument assumes that the direct infringement predicate for the purposes of liability in each subsection must be the same, especially in terms of how many actors are responsible for the direct infringement. And contrary to what Judge Linn’s opinion suggests, the per curiam majority is not “divorcing indirect infringement from direct infringement,” but is instead treating direct infringement (e.g., performing all steps of the claimed method) for the purposes of indirect infringement liability as encompassing more than one actor.
In support of Point 2, Judge Linn’s dissenting opinion also asserts that the per curiam majority’s reliance upon Fromson is “misplaced and misleading.” Having read the Fromson case several times, I don’t agree with Judge Linn’s contention (with one exception discussed below). In support of this contention, Linn initially asserts that Fromson “merely vacates an incorrect claim construction.” But without the ruling in Fromson that indirect (contributory) infringement liability of the claimed process was possible based on that correct claim construction, there would have been no reason to remand the case back to the district court for further fact findings to determine if the claimed process, as correctly construed, was infringed. (And Fromson clearly vacates and remands to the district court all four noninfringement rulings, including those relating to the process claims.)
Judge Linn also asserts that Fromson didn’t identify which claims (product or process) were potentially contributorily infringed, so that Fromson’s statement could be read as relating to only the product claims. But that argument also overlooks the fact that the contributory infringement question, in view of the technology involved, was the same for both product and process claims. (Judge Linn further asserts that Fromson in the sentences immediately after the portion quoted by the per curiam majority “explained that even though some products were not completed by the accused infringer, but by the customer, other products were,” so that the “claim construction issue actually decided did not depend on the resolution of the doctrinal issue here.” After repeated review, all that those “sentences” in the Fromson case tell me is that both direct and contributory infringement were potentially in play.)
Finally, Judge Linn asserts that Fromson “contains no doctrinal analysis on this issue” and “contains little more than a recitation of hornbook law in explaining the background of the appeal.” Judge Linn is correct that Fromson does not analyze its view that selling the “presensitized plates” (prepared by the accused manufacturer according to the initial step of the claimed process) to a customer that applied a diazo coating to those plates (according to the remaining step of the claimed method) could create contributory infringement liability. But given the legal stature of Chief Judge Markey, it would be surprising if his belief that contributory infringement liability was possible didn’t have at least some legal foundation. And as Judge Newman stated in her dissenting opinion in the McKesson Technologies panel decision, Fromson’s ruling that the accused infringer’s activity there could create contributory infringement liability “has been the law” of the Federal Circuit since 1983, and thus prior to the ruling in BMC Resources. Indeed, Judge Linn’s assertion that Fromson “contains no doctrinal analysis on this [contributory infringement liability] issue” is somewhat ironic, given that Linn’s opinion in BMC Resources cites Fromson as an example of the proposition that a “party cannot be liable for direct infringement [if] the party did not perform all the steps” of the claimed method.
Point No. 3 is that enactment of 35 U.S.C §§ 271(e)(2), (f), and (g) “contradicts” the per curiam majority view that “infringement” should be defined differently in 35 U.S.C § 271 (b) “in a way that is not limited to circumstances that give rise to liability under” 35 U.S.C § 271(a). That could be one take on the enactment of 35 U.S.C §§ 271(e)(2), (f), and (g), but is not the only one. As I’ve pointed out in Part I of this article, the enactment of 35 U.S.C §§ 271(f) and (g) also reflects Congress’ intent to close the “loopholes” in 35 U.S.C § 271(a), which is consistent with the “policy” underlying the ruling made by the per curiam majority. Indeed, 35 U.S.C §§ 271(f), as construed by Waymark, goes even further in not requiring that the claimed invention must be completed (i.e., any direct infringement) for there to be infringement liability under that particular subsection.
Point No. 4 is that the per curiam majority’s analogies to the federal criminal statutes and general tort law (as expressed by the Restatement of Torts) are flawed. I would agree that the per curiam majority’s analogy to the federal criminal statutes may be a stretch (although the Supreme Court’s “willful blindness” standard for the inducer in Global-Tech Appliances is based on criminal law). But in my view, the per curiam majority’s reliance upon general tort law principles from the Restatement of Torts is not the stretch that Judge Linn’s dissenting opinion suggests it is. (I’m also of the view that the per curiam majority’s analogies to the federal criminal statutes and general tort law are the least important base for their ruling.)
After making these four points, Judge Linn’s dissenting opinion then articulated its “one actor” rule: “[d]irect infringement liability requires that one actor perform[] each and every element or step of a claim,” citing Aro. (Judge Linn also supports its “one actor” rule for direct infringement based on the legislative history surrounding the enactment of the 1952 Patent Act.) Judge Linn also rejected the contention that the phrase “whoever” in 35 U.S.C § 271(a) “undermines” the “one actor” rule. Instead, Judge Linn interpreted “whoever” in 35 U.S.C § 271(a) to mean that “[m]ore than one entity can be independently liable for direct patent infringement if each entity practices every element of the claim.” (More on the meaning of “whoever” in 35 U.S.C § 271(a) when I discuss Judge Newman’s dissenting opinion.) In the context of its “one actor” rule, Judge Linn also reaffirmed his view (based on his opinion in BMC Resources) that vicarious infringement liability based on multiple (joint) actors requires that “one party direct[] or control[] another in a principal-agent relationship or like contractual relationship, or participate[] in a joint enterprise to practice each and every limitation of the claim” (e.g., all steps of the claimed method).
In her dissenting opinion, Judge Newman was extremely perplexed that neither the per curiam majority opinion, nor Judge Linn’s “resolves the issues of divided infringement.” (As noted above, Judge Newman also dissented in the McKesson Technologies panel decision.) With all due respect to Judge Newman, the two questions presented for briefing by the parties in the McKesson Technologies en banc order do not mention “divided infringement”: (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? (citing Fromson); and (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? The per curiam majority’s ruling answered the first question in a way that makes the second question essentially irrelevant. Judge Linn’s dissenting opinion answered the second question in the affirmative, while answering the first question by requiring one party (or one joint enterprise) to direct or control the performance of all steps of the claimed method, i.e., the “one actor” rule. Accordingly, “resolving the issues of divided infringement” was not necessarily required by the two questions posed.
Judge Newman also asserts that the per curiam majority’s “inducement-only” rule (as she characterizes it) is: (1) “not in accordance with statute, precedent, and sound policy”; (2) “raise new issues unrecognized by the [per curiam] majority”; and (3) “contains vast potential for abuse.” Instead, Judge Newman articulated her “direct infringement may be based on more than one actor” rule. This “more than one actor” direct infringement rule is based on Judge Newman’s view that “whoever” in 35 U.S.C § 271(a) “embraces the singular or plural” under the canons of statutory construction. If we were writing on a “blank slate,” I might agree that Judge Newman’s view of the meaning of “whoever” in 35 U.S.C § 271(a) is certainly plausible (she also points 35 U.S.C §§ 101, 161, and 171 as referring to “inventors” without distinguishing between the singular and plural). Unfortunately, we’re not writing on a “blank slate,” and none of the cases cited by Judge Newman say directly (or even suggest) that infringement liability under 35 U.S.C § 271(a) may involve “more than one actor.” In addition, the same logic would apply to 35 U.S.C § 271(b) which also contains the phrase “whoever,” thus supporting the per curiam majority’s “inducement-only” rule (albeit for a different reason).
In announcing her “more than one actor” rule for infringement liability under 35 U.S.C § 271(a), Judge Newman also asked for a resolution of the conflicting precedent between the panel decisions in BMC Resources, Muniauction, Akamai Technologies, and McKesson Technologies on the issue of joint, collaborative, or interactive infringement. In this regard, Newman was especially alarmed by Judge Linn’s “one actor” rule as requiring the “presence or absence” of infringement liability to depend on “cleverness or luck.” In fact, Newman pointed to copyright law for potential guidance on how to resolve such vicarious patent infringement liability issues (citing the Supreme Court’s 2005 decision in Metro-Goldwyn-Mayer Studios, Inc. v. Grokster Ltd. involving “peer-to-peer” sharing of copyrighted works.) In view of vicarious copyright liability doctrine, Newman pleaded that the “[Federal Circuit] should simply acknowledge that a broad, all-purpose single-entity requirement is flawed, and restore infringement to its status as occurring when all of the claimed steps are performed, whether by a single entity or more than one entity, whether by direction or control, or jointly, or in collaboration or interaction.”
Regarding the per curiam majority’s “inducement-only” rule (and beside the question of whether liability for inducement still required direct infringement), Judge Newman expressed two concerns. The first was the remedies for such “inducement-only” infringement. As Newman correctly observed, the per curiam majority opinion said nothing about how compensation for such induced infringement was to be measured. In fact, in terms of remedies, Judge Newman essentially championed her “more than one actor” direct infringement rule as permitting apportionment/allocation of the remedy based on the “relative contribution to the injury to the patentee, the economic benefit received by [each joint] tortfeasor and culpability of the actor.” (In response to Judge Linn’s hypothetical that the person who provided the nuts, bolts, or gears that hold together an infringing machine “could be responsible for full damages for infringement by the machine” under Judge Newman’s “more than one actor” direct infringement rule, Newman bluntly said this example didn’t “pass the chuckle test.”)
Judge Newman’s second concern was the potential for abuse of the “inducement-only” rule because no “proof of direct infringement” is required. Instead, “the entity that advises or enables or recommends the divided infringement is fully responsible for the consequences of the direct infringement.” In my opinion, this “potential abuse” concern is overstated by Judge Newman. In fact, the per curiam majority’s “inducement-only” rule has far greater restrictions on it compared to Judge Newman’s “more the one actor” direct infringement rule, namely that the accused inducer must still know that its actions will cause infringement of the claimed method (which also requires performance of all steps of the claimed method to occur).
So which opinion in this en banc decision is the correct one? That depends on your view of what “direct infringement” means, and whether “direct infringement” is defined solely by 35 U.S.C. § 271(a), or whether “direct infringement” simply means that all steps of a claimed method/process must be practiced for the other subsections involving indirect infringement liability, such as 35 U.S.C. §§ 271(b), to apply. That also depends on your view of whether “direct infringement” requires that all steps of a claimed method/process must be practiced by a single actor, or whether those steps may be practiced by more than one actor. Frankly, the diverse views in this en banc decision in the Akamai Technologies and McKesson Technologies cases reflect the fragmented, disorganized, and antiquated nature of 35 U.S.C § 271 and its various subsections. Such is especially true when considering interactive computer-based technologies which often involve more than one “actor” to be practiced. In this regard, a statement I made in my conclusion to my 2007 article bears repeating:
When Congress finally decided to overturn Deepsouth Packing by enacting § 271(f) in 1984, they had a “golden opportunity” to provide a comprehensive and consistent approach to infringement determinations involving activities both inside and outside the United States. Unfortunately, Congress, in its usual fashion, responded simply to the issue at hand, namely exportation of unassembled components of a patented invention. This “patchwork” approach by Congress has left the Supreme Court, the Federal Circuit and the lower district courts with the unenviable task of trying to render consistent infringement interpretations for a variety of situations that do not always fit easily within the various paragraphs of § 271. In short, Congress, in addressing the gaps opened by Deepsouth Packing, has provided no comprehensive or consistent framework or scheme in § 271 for addressing those gaps.
The diverse and fragmented views in the en banc decision in the Akamai Technologies and McKesson Technologies cases simply confirm my view in my 2007 article that 35 U.S.C § 271 and its “patchwork” of subsections are outdated and obsolete. What is required is a comprehensive legislative overhaul of 35 U.S.C § 271 to effectively, consistently and fairly deal with infringement issues involving interactive computer-based technologies which are not just national, but global in nature. Needless to say, Congress again missed a “golden opportunity” to carry out this needed overhaul of 35 U.S.C § 271as part of the AIA (the Abominable Inane Act).
I might also add that the en banc decisions in the Akamai Technologies and McKesson Technologies cases are likely not the end of this “sad tale” concerning joint infringement of interactive computer-based technologies. The accused infringers are virtually certain to ask for review by the Supreme Court. And if the Supreme Court does decide to review these cases, “look out below!”
*© 2012 Eric W. Guttag. Posted on IPWatchdog on September 5, 2012.
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Tags: Akamai Technologies, CAFC, Eric Guttag, Federal Circuit, indirect infringement, joint infringement, judge linn, Judge Newman, McKesson Technologies Posted in: Eric Guttag, Federal Circuit, Guest Contributors, IP News, IPWatchdog.com Articles, Patent Fools™ 2 comments Leave a comment »
Akamai Technologies v. Limelight Networks: The CAFC Joint Infringement Conundrum | IPWatchdog.com | Patents & Patent Law September 5th, 2012 4:47 pm [...] >>>> Continue Reading <<<< [...]
EG September 8th, 2012 1:11 pm To all:
There’s been a lot of “electronic ink” spilt in the patent law media characterizing the per curiam majority opinion as announcing a “new” rule for inducing infringement. It does not. The concept that indirect infringement liability may be based on more than one actor performing all steps of the claimed method goes back to the 1983 in the Fromson case
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