Court Opinion

ID: 811254
Source: CourtListenerOpinion
Date Created: 2012-11-05 16:15:51+00
Date Added: 2024-06-11T09:53:07.583585
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
              __________________________

               TRAVEL SENTRY, INC.,
               Plaintiff-Cross Appellant,
                           v.
                 DAVID A. TROPP,
                 Defendant-Appellant.
              __________________________

                   2011-1023, -1367
              __________________________

   Appeals from the United States District Court for the
Eastern District of New York in Case No. 06-CV-6415,
Judge Eric N. Vitaliano.
               __________________________

              Decided: November 5, 2012
              __________________________

   WILLIAM L. PRICKETT, Seyfarth Shaw LLP, of Boston,
Massachusetts, argued for plaintiff-cross appellant.

    DONALD R. DINAN, Roetzel & Andress, LPA, of Wash-
ington, DC, argued for defendant-appellant.
               __________________________

    Before LOURIE, LINN, and MOORE, Circuit Judges.
TRAVEL SENTRY   v. TROPP                                   2

 Opinion for the court filed by Circuit Judge LOURIE, in
which Circuit Judge MOORE joins. Opinion concurring in
           part filed by Circuit Judge LINN.
LOURIE, Circuit Judge.
     David A. Tropp (“Tropp”) appeals from the decision of
the United States District Court for the Eastern District
of New York granting summary judgment that Travel
Sentry, Inc. (“Travel Sentry”) does not infringe the as-
serted claims of Tropp’s U.S. Patents 7,021,537 and
7,036,728 (the “’537 patent” and “’728 patent”). Travel
Sentry, Inc. v. Tropp, 736 F. Supp. 2d 623, 639 (E.D.N.Y.
2010). Travel Sentry cross-appeals from the court’s denial
of its claim for attorney fees and costs. Travel Sentry, Inc.
v. Tropp, No. 06-CV-6415, 2011 WL 1327134, at *2
(E.D.N.Y. Mar. 31, 2011). We vacate the court’s grant of
summary judgment and the order denying Travel Sentry’s
claim for fees. We remand for further proceedings.
                       BACKGROUND
    The terrorist attacks of September 11, 2001, have led
to a heightened concern for air travel security. That
concern is addressed in part by the Transportation Secu-
rity Administration (“TSA”) of the Department of Home-
land Security (“DHS”), which conducts airline luggage
inspections and is the sole luggage screening entity in the
United States. Pursuant to a Congressional mandate (the
“Screening Mandate”) adopted in response to the terrorist
attacks, TSA instituted a policy on January 1, 2003, of
screening all checked airline luggage for flights originat-
ing in the United States. Travel Sentry, 736 F. Supp. 2d
at 626. In announcing the new policy, TSA advised trav-
elers to leave their checked luggage unlocked. TSA
warned that its agents would otherwise break the locks on
locked bags in order to open and inspect them.
3                                   TRAVEL SENTRY   v. TROPP

     The ’537 and ’728 patents are both entitled “Method of
Improving Airline Luggage Inspection.” Tropp is the sole
named inventor and owner of the patents, which claim a
filing date of November 12, 2003.1 Tropp’s patents dis-
close an improved method of airline luggage screening
using a dual-access lock. The lock enables a traveler to
secure his or her luggage while still permitting it to be
accessed by a luggage screening entity with a master key.
Id. at 624. According to the patents, Tropp’s invention
addresses “a compelling and immediate need” for a
method of inspecting luggage that does not create security
risks associated with unlocked baggage and does not
damage luggage or aggravate passengers. ’537 patent
col.2 ll.21–24.
     Tropp’s patents claim methods involving the steps of
(1) providing to consumers a “special” dual-access luggage
lock having an “identifying structure,” (2) marketing the
special lock to consumers, (3) the identification structure
signaling to a luggage screener that the lock may be
opened with a master key, and (4) the luggage screener
using the master key to open the lock. Claim 1 of the ’537
patent is representative:
         1. A method of improving airline luggage in-
    spection by a luggage screening entity, compris-
    ing:
    [Step 1] making available to consumers a special
             lock having a combination lock portion
             and a master key lock portion, the mas-
             ter key lock portion for receiving a mas-
             ter key that can open the master key lock
             portion of this special lock, the special

    1  The ’728 patent is a continuation-in-part of two
patent applications, including one that was filed on No-
vember 12, 2003, and issued as the ’537 patent.
TRAVEL SENTRY   v. TROPP                                   4

              lock designed to be applied to an individ-
              ual piece of airline luggage, the special
              lock also having an identification struc-
              ture associated therewith that matches
              an identification structure previously
              provided to the luggage screening entity,
              which special lock the luggage screening
              entity has agreed to process in accor-
              dance with a special procedure,
    [Step 2] marketing the special lock to the con-
             sumers in a manner that conveys to the
             consumers that the special lock will be
             subjected by the luggage screening entity
             to the special procedure,
    [Step 3] the identification structure signaling to a
             luggage screener of the luggage screen-
             ing entity who is screening luggage that
             the luggage screening entity has agreed
             to subject the special lock associated with
             the identification structure to the special
             procedure and that the luggage screening
             entity has a master key that opens the
             special lock, and
    [Step 4] the luggage screening entity acting pur-
             suant to a prior agreement to look for the
             identification structure while screening
             luggage and, upon finding said identifi-
             cation structure on an individual piece of
             luggage, to use the master key previously
             provided to the luggage screening entity
             to, if necessary, open the individual piece
             of luggage.
Id. col.6 ll.6–37.
5                                   TRAVEL SENTRY   v. TROPP

    Tropp, through his company Safe Skies, LLC, admin-
isters a lock system that permits TSA to unlock, inspect,
and relock checked baggage. Tropp asserts that he con-
ceived of his method of airline luggage inspection upon
reading about the Screening Mandate in December of
2002. Travel Sentry, 736 F. Supp. 2d at 630. Tropp twice
contacted TSA in early 2003, proposing an agreement to
implement his method. Id. TSA informed Tropp that his
proposal did not meet the TSA lock standards then in
effect. Id. Shortly after Tropp filed his patent application
in November 2003, however, TSA notified Tropp that it
would recognize his system. Id. at 631. In 2005, Tropp
incorporated Safe Skies, LLC, and began selling locks
marked with a red flame logo. Safe Skies sells its locks
online, by mail order, and to large retailers. Safe Skies
and TSA entered into a memorandum of understanding
pursuant to which Safe Skies provides TSA with training
materials regarding lock recognition and master keys to
open Safe Skies’ locks, and TSA agrees, whenever practi-
cable, to open checked baggage secured with Safe Skies’
locks using the master keys. J.A. 852.
    Travel Sentry also administers a system that enables
a traveler to lock a checked bag while allowing the TSA to
open the lock, search the bag as needed, and then relock
it. Travel Sentry, 736 F. Supp. 2d at 627. The identifying
mark on Travel Sentry’s locks is a red diamond logo, for
which Travel Sentry holds a registered trademark. Id. at
630. Under the terms of Travel Sentry’s “Trademark
License Agreement,” lock manufacturers pay Travel
Sentry an initial fee and subsequent royalties for each
lock bearing the red diamond logo that they sell to dis-
tributors, as well as an annual fee and a fee for the mas-
ter keys provided to TSA. Id. Under Travel Sentry’s
“Marketing License Agreement,” lock distributors pay
Travel Sentry an annual fee for the right to market a
TRAVEL SENTRY   v. TROPP                                  6

capped number of marked locks. Id. Under Travel Sen-
try’s Limited Distribution Letter of Agreement, certain
luggage manufacturers pay Travel Sentry an annual fee
and royalties for each marked lock used in their luggage.
Id. Travel Sentry’s website provides an explanation to
consumers about how the concept works and identifies
websites and stores where Travel Sentry-marked products
can be purchased. Id. Travel Sentry retains the right to
monitor the quality of the locks bearing its mark and to
control the distribution of master keys, which have a
distinctive shape and color. Id.
    Travel Sentry entered into a three-page Memorandum
of Understanding (“MOU”) with TSA in October 2003. Id.
at 628–30; see also J.A. 322–24. The MOU, which is
quoted at length in the district court opinion, is the only
written agreement between TSA and Travel Sentry
concerning Travel Sentry-marked locks. Travel Sentry,
736 F. Supp. 2d at 628. The MOU states that Travel
Sentry will supply TSA with master keys (termed “pass-
keys”) to open checked baggage secured with Travel
Sentry-certified locks. According to the MOU, the pur-
pose of the agreement:
   is to set forth terms by which Travel Sentry will
   provide TSA, at no cost, with 1,500 complete sets
   of passkeys for the TSA to distribute to field loca-
   tions. These passkeys are designed to permit TSA
   screeners to open checked baggage secured with
   Travel Sentry certified locks without breaking
   such locks.
       TSA will test these passkeys to ensure their
   operational suitability. If TSA determines that
   Travel Sentry certified locks or the passkeys re-
   quired for their operation do not perform their in-
   tended function, TSA will inform Travel Sentry
7                                   TRAVEL SENTRY   v. TROPP

    and this agreement will be considered null and
    void. TSA takes no responsibility for any damage
    to locks or baggage secured with Travel Sentry
    locks, although TSA will make good faith efforts to
    distribute the passkeys and information provided
    by Travel Sentry on the use of the passkeys, and
    to use the passkeys to open checked baggage se-
    cured with Travel Sentry certified locks whenever
    practicable. TSA screeners will make good faith
    efforts to relock Travel Sentry locks after bags are
    inspected.
Id. at 628–29.
    The MOU sets forth the responsibilities of both par-
ties to the agreement. With respect to the TSA, the MOU
provides that:
    (a) TSA will accept passkey sets, as well as
    backup replacement sets, from Travel Sentry and
    distribute the sets to all areas where baggage is
    being screened;
    (b) the passkeys will be stamped “Property of
    TSA” and “Unlawful to Duplicate,” “may include
    the DHS logo if desired and authorized,” and will
    be marked with a tracking number in a TSA-
    agreed format so that they “can be easily inte-
    grated into the TSA property management sys-
    tem;”
    (c) Travel Sentry will coordinate the content of
    public announcement with the TSA in advance of
    the program launch, tentatively scheduled for No-
    vember 12, 2003, “including promotional materi-
    als, press releases and similar media;” and
TRAVEL SENTRY   v. TROPP                                  8

   (d) “TSA may offer the same terms and conditions
   in this agreement to any other entity that seeks to
   provide similar services.”
Id. at 629. With regard to Travel Sentry’s responsibili-
ties, the MOU states that:
   (a) “Travel Sentry acknowledges that the TSA
   cannot make or infer any exclusive endorsement
   of Travel Sentry certified locks, nor can Travel
   Sentry claim that any such endorsement exists.
   Travel Sentry may not use the DHS/TSA logo on
   any of its locks or distributed print or other media
   materials unless specifically authorized to do so in
   writing;”
   (b) “Travel Sentry understands that the TSA in-
   tends to develop a functional standard, open to
   the public, for ‘Independent Dual Custody Opera-
   tion Locking Systems.’ By moving ahead with its
   program in advance of the publication and adop-
   tion of this standard, Travel Sentry or any other
   entity takes some degree of risk in that their lock-
   ing system may not meet the final version of the
   functional standard;” and
   (c) “Travel Sentry will provide TSA with all neces-
   sary screener training materials, in sufficient
   quantities, on lock recognition, use of passkeys to
   open locks and ordering of replacement or addi-
   tional sets of passkeys. Travel Sentry will work
   with TSA in ensuring distribution of training ma-
   terials to all checked baggage screening sites.”
Id. Finally, the MOU states that its terms will remain in
effect until terminated, and that either party may termi-
nate the MOU upon 30 days’ notice to the other party. Id.
at 630.
9                                   TRAVEL SENTRY   v. TROPP

    In December 2006, Travel Sentry sued Tropp seeking
a declaratory judgment of noninfringement and invalidity
of the ’537 and ’728 patents, and Tropp subsequently
counterclaimed for infringement.2 Id. at 624. In Septem-
ber 2009, following a Markman hearing, the district court
issued an opinion construing the disputed claim terms.
Travel Sentry, Inc. v. Tropp, 661 F. Supp. 2d 280
(E.D.N.Y. 2009). Travel Sentry then moved for summary
judgment of noninfringement.
    In an opinion dated September 10, 2010, the district
court granted Travel Sentry’s motion for summary judg-
ment of noninfringement. Travel Sentry, 736 F. Supp. 2d
at 624. The court began by summarizing the significance
of the four steps of the asserted method claims.3 The
court explained that “the first and second steps of the
method[] describe the actions of ‘making available’ and
‘marketing’ locks to customers, without specifying that
those actions are to be performed by any particular type
of person or entity.” Id. at 637. The court further ob-
served that “[t]he third and fourth [steps of the method]
specifically describe actions to be taken by a luggage
screening entity in the course of performing luggage
screening (recognizing a signal denoting a special lock,
    2    In November 2008, Tropp commenced a related
action, claiming infringement of the ’537 and ’728 patents
by eighteen luggage manufacturers and/or distributors
who have licensed Travel Sentry’s trademark. Travel
Sentry, 736 F. Supp. 2d at 624 & n.1. That action is not
before us in this appeal.
    3    Before the district court, Travel Sentry contended
that the asserted claims contained four steps, whereas
Tropp asserted that they contained only two. Arguably
they contain three steps, that labeled above as step 3 in
fact being not a step of a method but a whereas-type
clause. On appeal, as Tropp acquiesces in the district
court’s conclusion that the methods contain four steps, we
will also.
TRAVEL SENTRY   v. TROPP                                  10

and looking for and opening locks with that signal with a
master key).” Id.
     The district court then considered the matter of direct
infringement. As to the first two steps of the claimed
method, the court “assum[ed] arguendo that Tropp has
demonstrated a material question of fact as to whether
Travel Sentry performs and/or directs or controls its
licensee[s]’ performance of each of those two steps, either
literally or under the doctrine of equivalents.” Id. at 638.
The court then observed that Tropp’s “direct infringement
claim against Travel Sentry is only viable if there is
sufficient evidence to permit a reasonable jury to infer
that Travel Sentry directs and controls the TSA’s per-
formance of the additional steps of the method.” Id.
Focusing its analysis on steps 3 and 4 of Tropp’s claimed
method, the district court held that the MOU “is insuffi-
cient to establish the ‘control or direction’ requirement for
joint infringement liability established by the Federal
Circuit in BMC Resources and Muniauction.” Id. (citing
Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed.
Cir. 2008); BMC Res., Inc. v. Paymentech, L.P., 498 F.3d
1373 (Fed. Cir. 2007), overruled on other grounds by
Akamai Techs. Co. v. Limelight Networks, Inc., 692 F.3d
1301 (Fed. Cir. 2012) (en banc)). As the district court
explained, “Tropp points to no evidence at all that could
morph this relatively noncommittal ‘understanding’
between Travel Sentry and the TSA into a contract that
renders Travel Sentry vicariously liable for the TSA’s
actions.” Id. The court thus concluded that Travel Sentry
did not directly infringe the method claims under a theory
of joint infringement.
    The district court then turned to the matter of indi-
rect infringement. In view of its holding of no direct
infringement, the court concluded that, “in the absence of
a showing that any entity has directly infringed Tropp’s
11                                  TRAVEL SENTRY   v. TROPP

patents, any claim by him against Travel Sentry for
indirect infringement fails as a matter of law.” Id. at 639
(citing Dynacore Holdings Corp. v. U.S. Philips Corp., 363
F.3d 1263, 1272 (Fed. Cir. 2004)). On that basis the
district court found no genuine issue of material fact that
Travel Sentry did not indirectly infringe Tropp’s asserted
claims.
    The district court entered summary judgment of non-
infringement in favor of Travel Sentry and dismissed the
action with prejudice. Id. The court subsequently denied
a motion by Travel Sentry for attorney fees and costs
pursuant to 35 U.S.C. § 285 and 28 U.S.C. § 1927, and
closed the case. Travel Sentry, 2011 WL 1327134, at *2.
    Tropp appealed from the grant of summary judgment
of noninfringement, and Travel Sentry cross-appealed
from the denial of its motion for fees and costs. We have
jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).
                       DISCUSSION
                             I
    Summary judgment is appropriate “if the movant
shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a). “We review de novo a district
court’s grant of summary judgment, drawing all reason-
able inferences in favor of the nonmovant.” Tokai Corp. v.
Easton Enters., Inc., 632 F.3d 1358, 1366 (Fed. Cir. 2011);
see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
(1986).
    Infringement is a question of fact. Absolute Software,
Inc. v. Stealth Signal, Inc., 659 F.3d 1121, 1129–30 (Fed.
Cir. 2011). “On appeal from a grant of summary judg-
ment of non-infringement, we determine whether, after
resolving reasonable factual inferences in favor of the
TRAVEL SENTRY   v. TROPP                                12

patentee, the district court correctly concluded that no
reasonable jury could find infringement.” Id. at 1130.
    On appeal, Tropp asserts that the district court erro-
neously granted summary judgment of noninfringement.
Tropp contends that Travel Sentry, by directing and
controlling third parties’ actions, infringes the asserted
claims. Tropp argues that Travel Sentry directs and
controls its manufacturer licensees and distributor licen-
sees to perform steps 1 and 2 of the asserted claims.
Tropp further asserts that Travel Sentry directs and
controls TSA in its performance of steps 3 and 4. Tropp
contends that TSA, pursuant to the MOU, specifically
agreed to use the Travel Sentry system. Further, Tropp
argues, TSA in fact uses the Travel Sentry system, as a
notice on TSA’s website indicates. See J.A. 447. In argu-
ing that Travel Sentry directs and controls TSA in its
performance of claim steps 3 and 4, Tropp points out that
under the MOU: (1) Travel Sentry supplies TSA with
master keys and replacement keys designed to permit
TSA screeners to open checked baggage secured with
Travel Sentry-certified locks; (2) the TSA commits to
make “good faith efforts” to distribute the passkeys to its
screeners and to use them to unlock and relock Travel
Sentry-certified locks; (3) Travel Sentry and TSA coordi-
nate public announcements concerning the program;
(4) Travel Sentry provides screener training materials to
TSA and works with TSA to ensure distribution of those
materials to all screening sites; and (5) Travel Sentry
agrees to assume liability for luggage damaged by TSA.
The relationship between Travel Sentry and TSA, Tropp
argues, amounts to direction and control such that sum-
mary judgment of noninfringement should not have been
granted.
    Travel Sentry, in response, contends that Tropp has
presented no evidence that Travel Sentry directs or
13                                  TRAVEL SENTRY   v. TROPP

controls the performance of any steps of the asserted
claims. As for method steps 1 and 2, Travel Sentry con-
tends that the record is devoid of evidence that Travel
Sentry controls the relevant actions of any other parties,
including manufacturers of locks, retailers of locks, or
consumers. Regarding steps 3 and 4, Travel Sentry
asserts that it does not direct or control TSA. According
to Travel Sentry, although the MOU suggests that TSA
may open Travel Sentry-marked locks with master keys,
the MOU makes clear that TSA is not obligated to do
anything for Travel Sentry. Travel Sentry argues that, at
most, TSA represented that it would make “good faith
efforts,” when practicable, to use the master keys to open
and relock checked baggage secured with Travel Sentry-
marked locks. Moreover, according to Travel Sentry, the
MOU does not set forth any consequence or remedy for
either party’s failure to comply with its terms, and it
allows either party to unilaterally terminate the agree-
ment. Travel Sentry points out that TSA’s screening
procedures are classified, see 49 C.F.R. § 1520.5(b)(9), and
that TSA maintains complete discretion over whether,
how, where, and when it performs the luggage screening
steps. Because the MOU does not require the TSA to take
any action, Travel Sentry asserts, it does not in any way
support the requisite direction or control for a finding of
joint infringement. Finally, Travel Sentry contends that
it cannot be liable for either contributory infringement or
inducement because no party engages in direct infringe-
ment, i.e., performs or controls the performance of each
step of the claimed methods.
    To establish liability for direct infringement of a
claimed method or process under 35 U.S.C. § 271(a), a
patentee must prove that each and every step of the
method or process was performed. BMC, 498 F.3d at
1378; Muniauction, 532 F.3d at 1328. In cases in which
TRAVEL SENTRY   v. TROPP                                  14

more than one entity performs the steps of a claimed
method or process, a party is liable for direct infringement
only if that party exercises “control or direction” over the
performance of each step of the claim, including those
that the party does not itself perform. Golden Hour Data
Sys., Inc. v. emsCharts, Inc., 614 F.3d 1367, 1381 (Fed.
Cir. 2010) (“Where the combined actions of multiple
parties are alleged to infringe process claims, the patent
holder must prove that one party exercised control or
direction over the entire process such that all steps of the
process can be attributed to the controlling party, i.e., the
mastermind.” (internal quotation marks omitted)); see
also Muniauction, 532 F.3d at 1329; BMC, 498 F.3d at
1380 (“Courts faced with a divided infringement theory
have also generally refused to find liability where one
party did not control or direct each step of the patented
process.”). The determination is a fact-specific inquiry;
relevant considerations include whether the accused
direct infringer “provides instructions or directions” to
another entity for performing steps of the patented proc-
ess or, on the other hand, “contract[s] out steps of a pat-
ented process to another entity.” BMC, 498 F.3d at 1381.
Alternatively, “the control or direction standard is satis-
fied in situations where the law would traditionally hold
the accused direct infringer vicariously liable for the acts
committed by another party that are required to complete
performance of a claimed method.” Muniauction, 532
F.3d at 1330.
    In the recent en banc decision of this court in Akamai,
we decided an issue of divided infringement under
§ 271(b), rather than under 271(a). Akamai, 692 F.3d at
1307. We found that “we have no occasion at this time to
revisit any of those principles regarding the law of divided
infringement as it applies to liability for direct infringe-
ment under 35 U.S.C. § 271(a).” Id. We therefore left
15                                  TRAVEL SENTRY   v. TROPP

open to possible future cases whether some form of liabil-
ity for divided infringement could occur in some circum-
stances under § 271(a). While a reasonable fact-finder
could in some circumstances find that direction could be
separated from control and lead to infringement liability,
such circumstances have not found their way into our
precedent at the present time. We therefore will review
this appeal under the rubric of induced infringement.
    Thus, as our precedent now stands, on the issue of di-
rect infringement under § 271(a), we agree with the
district court that there is no genuine issue of material
fact that Travel Sentry does not control or direct the
performance of each step of the claimed method. Like the
district court, we focus our analysis on steps 3 and 4 of
Tropp’s claimed method. See Travel Sentry, 736 F. Supp.
2d at 638. If the performance of those steps is not attrib-
utable to Travel Sentry, then Travel Sentry cannot be
directly liable for infringing Tropp’s asserted method
claims. The parties do agree that steps 3 and 4 of Tropp’s
claimed method can only be performed by a baggage
screening entity—i.e., TSA. In addition, Travel Sentry
does not seriously dispute that it is TSA who performs
those steps independently. The inquiry, then, is whether
there is sufficient evidence that Travel Sentry controls or
directs TSA in its performance of those steps, such that
Travel Sentry is liable for TSA’s acts.
    In performing its direct infringement analysis, the
district court correctly scrutinized the MOU, the only
written agreement between Travel Sentry and TSA. Id.
at 628. It correctly concluded that it is clear from the
MOU that Travel Sentry neither controls nor directs
TSA’s performance of steps 3 and 4 of the asserted claims.
For example, there is nothing in the MOU to suggest that
Travel Sentry exerts control over TSA, as TSA remains
free to decide in the course of its screening whether or not
TRAVEL SENTRY   v. TROPP                                16

it will use the master keys to open a Travel Sentry-
certified lock. Id. at 638. As the district court correctly
observed, the MOU “does not provide for any conse-
quences of a failure to comply, and either party can uni-
laterally terminate it at will.” Id. Likewise, Travel
Sentry also does not direct TSA in its performance of
steps 3 and 4. As we explained in Muniauction, an ac-
cused infringer that merely “controls access to its system
and instructs [others] on its use” is not liable for direct
infringement. 532 F.3d at 1330. Travel Sentry’s actions
pursuant to the MOU amount to no more than that.
Tropp makes no attempt to distinguish the instructions at
issue in Muniauction from the MOU’s provision stating
that “Travel Sentry will provide TSA with all necessary
screener training materials.” Travel Sentry, 736 F. Supp.
2d at 629. As a result, Tropp fails to refute the district
court’s determination that the relationship between
Travel Sentry and TSA “is precisely the type of relation-
ship which the Federal Circuit in Muniauction deemed
inadequate to support a claim of direct infringement.” Id.
at 638. Accordingly, we, like the district court, reject
Tropp’s assertion of a genuine dispute that Travel Sentry
controls or directs TSA in a way that would give rise to
direct infringement liability. Id.
    Tropp characterizes the MOU as a “contract,” but that
inapt description fails to acknowledge the nonbinding,
nonexclusive nature of the MOU, which indicates that
TSA will make only “good faith efforts” to use the Travel
Sentry system “whenever practicable,” and provides no
remedy for a decision by TSA not to use Travel Sentry’s
master keys to open Travel Sentry-marked locks. Id. at
629. Tropp also contends that, because the MOU states
that “TSA takes no responsibility for any damage to locks
or baggage secured with Travel Sentry locks,” Travel
Sentry must be vicariously liable for TSA’s acts. Al-
17                                    TRAVEL SENTRY   v. TROPP

though the control or direction standard is satisfied where
the accused direct infringer is vicariously liable for the
actions of a third party who completes performance of the
claimed method, that does not describe the situation here.
The terms of the MOU do not contain any express or
implicit agreement that TSA will act on Travel Sentry’s
behalf or subject to its control, as an agency relationship
would require. See Dixson v. United States, 465 U.S. 482,
505 (1984) (“[An] agency relationship [is] created when
one person agrees with another ‘that the other shall act
on his behalf and subject to his control.’” (quoting Re-
statement (Second) of Agency § 1 (1957))). There is no
genuine factual dispute that Travel Sentry is not vicari-
ously liable for TSA’s actions.
    Accordingly, we conclude that the district court did
not err by finding no genuine issue of material fact that
Travel Sentry is not liable for direct infringement of
Tropp’s asserted claims. See Travel Sentry, 736 F. Supp.
2d at 639. That does not end our analysis, however,
because the district court’s grant of summary judgment
also rested on its determination that Travel Sentry could
not be liable for indirect infringement. Id. At 634-35, 639.
     With respect to inducement under § 271(b), we con-
clude that the district court legally erred in its analysis of
indirect infringement. Travel Sentry, 736 F. Supp. 2d at
634–35, 639. Recently, sitting en banc in Akamai, we
clarified the law on inducement. We explained that all
the steps of a claimed method must be performed in order
to find induced infringement, but that it is not necessary
to prove that all the steps were committed by a single
entity. Akamai, 692 F.3d at 1307. In so holding, we
overruled the holding in BMC that in order for a party to
be liable for induced infringement, some other entity must
be liable for direct infringement. Id.
TRAVEL SENTRY   v. TROPP                                  18

     Travel Sentry’s reliance on BMC in support of the dis-
trict court’s conclusion on indirect infringement is, accord-
ingly, unpersuasive.       The district court summarily
concluded that because a single party was not liable for
direct infringement, “any claim by [Tropp] against Travel
Sentry for indirect infringement fails as a matter of law.”
Travel Sentry, 736 F. Supp. 2d at 639. As we explained in
Akamai, however, our prior cases do not support a single-
entity requirement in the inducement context. Akamai,
692 F.3d at 1315. Rather, liability under § 271(b) may
arise when the steps of a method claim are performed by
more than one entity, provided the other requirements for
inducement are met. Id. at 1306.
    The district court, although following our then-
existing precedent, erred by founding its indirect in-
fringement analysis on a single-entity requirement. See
id. at 1318. The district court did not determine whether
a genuine issue of material fact existed as to the perform-
ance of all the claim steps—whether by one entity or
several. Moreover, the court did not analyze whether
Travel Sentry had knowledge of Tropp’s patent and
induced others to perform the claim steps that Travel
Sentry did not itself perform.
    We therefore vacate the district court’s grant of sum-
mary judgment and remand for a determination whether,
under the standard set forth in our recent en banc opinion
in Akamai, Travel Sentry is liable for indirect infringe-
ment. That standard requires that the accused inducer,
here, Travel Sentry, knew of the asserted patents and
performed or induced the performance of the steps of the
claimed methods, and that all of those steps were in fact
performed.
19                                   TRAVEL SENTRY   v. TROPP

                             II
     In view of our disposition of the merits of Tropp’s ap-
peal, we need not address Travel Sentry’s cross-appeal
from the court’s denial of its claim for fees and costs under
35 U.S.C. § 285 and 28 U.S.C. § 1927. We therefore
vacate the district court’s denial of Travel Sentry’s motion
for fees and costs. See Raytheon Co. v. Indigo Sys. Corp.,
No. 2011-1245, 2012 WL 3104602, at *1 n.1 (Fed. Cir.
Aug. 1, 2012).
                       CONCLUSION
    For the foregoing reasons, the district court’s grant of
summary judgment and its order denying Travel Sentry’s
motion for fees and costs are vacated. The case is re-
manded for further proceedings consistent with this
opinion.
             VACATED AND REMANDED
       NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
               __________________________

               TRAVEL SENTRY, INC.,
               Plaintiff-Cross Appellant,

                            v.

                  DAVID A. TROPP,
                  Defendant- Appellant.
               __________________________

                    2011-1023, -1367
               __________________________

      Appeal from the United States District Court for
the Eastern District of New York in No. 06-CV-6415,
Judge Eric N. Vitaliano.
               __________________________

LINN, Circuit Judge, concurring-in-part.

    I agree with the majority in all respects but one.
Where I part company is with the majority’s suggestions
that the “direction or control” standard is an alternative
to and therefore different from the traditional principles
of vicarious liability and that circumstances may exist in
which “direction” could be separated form “control.” Maj.
Op. 14-15. These suggestions fly in the face of Akamai
Technologies, Inc. v. Limelight Networks, Inc., 692 F.3d
1301 (Fed. Cir. 2012) (en banc), and this court’s other
2                                    TRAVEL SENTRY v. TROPP

precedents and amount to no more than obiter dictum,
unnecessary to resolve the case presently before us.

    The majority’s suggestions are contrary to the test for
divided infringement liability under 35 U.S.C. § 271(a)
established in BMC Resources, Inc. v. Paymentech, L.P.,
498 F.3d 1373 (Fed. Cir. 2007) and Muniauction, Inc. v.
Thomson Corp, 532 F.3d 1318 (Fed. Cir. 2008). The
question of when liability arises for divided infringement
under § 271(a) was recently before the court sitting en
banc in Akamai, and a majority of this court’s active
judges expressly declined to alter the standard for direct
infringement established by BMC and Muniauction.
Akamai, 692 F.3d at 1307. To suggest that Akamai “left
open to possible future cases whether some form of liabil-
ity for divided infringement could occur in some circum-
stances under § 271(a),” Maj. Op. 14-15, unnecessarily
provokes continued debate and uncertainty in an area of
the law now settled by the court.

    The majority’s assertion that the traditional princi-
ples of vicarious liability are an alternative way to meet
the direction or control standard, suggesting that the
direction or control standard is broader than the tradi-
tional principles of vicarious liability, is not supported by
this court’s precedent. See id. 14 (“Alternatively, ‘the
control or direction standard is satisfied in situations
where the law would traditionally hold the accused direct
infringer vicariously liable for the acts committed by
another party that are required to complete performance
of a claimed method.’” (emphasis added) (quoting Muni-
auction, 532 F.3d at 1330)). This court has repeatedly
equated direction or control with the traditional principles
of vicarious liability, such as agency, and has done so
most recently in Akamai:
TRAVEL SENTRY v. TROPP                                    3
       This court has held that for a party to be li-
   able for direct patent infringement under 35
   U.S.C. § 271(a), that party must commit all the
   acts necessary to infringe the patent, either per-
   sonally or vicariously. In the context of a method
   claim, that means the accused infringer must per-
   form all the steps of the claimed method, either
   personally or through another acting under his di-
   rection or control. . . .

       To be sure, the court has recognized that di-
   rect infringement applies when the acts of in-
   fringement are committed by an agent of the
   accused infringer or a party acting pursuant to
   the accused infringer’s direction or control. Ab-
   sent an agency relationship between the actors or
   some equivalent, however, a party that does not
   commit all the acts necessary to constitute in-
   fringement has not been held liable for direct in-
   fringement even if the parties have arranged to
   “divide” their acts of infringing conduct for the
   specific purpose of avoiding infringement liability.
692 F.3d at 1307 (emphasis added) (citations omitted).
The holding of Muniauction similarly recognized the
relationship between the traditional principles of vicari-
ous liability and the direction or control test:

       Under BMC Resources, the control or direction
   standard is satisfied in situations where the law
   would traditionally hold the accused direct in-
   fringer vicariously liable for the acts committed by
   another party that are required to complete per-
   formance of a claimed method. In this case,
   Thomson neither performed every step of the
   claimed methods nor had another party perform
   steps on its behalf, and Muniauction has identi-
   fied no legal theory under which Thomson might
4                                    TRAVEL SENTRY v. TROPP

    be vicariously liable for the actions of the bidders.
    Therefore, Thomson does not infringe the asserted
    claims as a matter of law.

Muniauction, 532 F.3d at 1330 (citations omitted).

    The direction or control test determines when one
party “bears responsibility for the actions of the other,”
BMC, 498 F.3d at 1382 (emphasis added), or when the
steps performed by another are “attributable to the con-
trolling party,” Muniauction, 532 F.3d at 1329 (emphasis
added). The traditional principles of vicarious liability,
which are well established in the context of tort and
agency law, govern when liability arises for the acts of
another. See Restatement (Third) of Agency § 1.01 (2006);
Restatement (Second) of Torts § 877 (1979); Restatement
(Second) of Torts § 315 (1965). To find one party liable for
the actions of another independent of the traditional
principles of vicarious liability would essentially hold a
party liable for practicing only a portion of the claim, and
thus derogate from the general principle that “[i]n-
fringement requires, as it always has, a showing that a
defendant has practiced each and every element of the
claimed invention.” BMC, 498 F.3d at 1380 (citing War-
ner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17,
40 (1997)); see also Muniauction, 532 F.3d at 1329 (“The
court’s analysis [in BMC] was founded on the proposition
that direct infringement requires a single party to per-
form every step of a claimed method.”). As this court
explained in Akamai, while a single entity can directly
infringe a patent by performing all of the steps of a
method “either personally or vicariously,” direct infringe-
ment is a strict liability tort and “has not been extended
to cases in which multiple independent parties perform
the steps of the method claim.” 692 F.3d at 1307. This is
because to do so would “ensnare actors who did not them-
selves commit all the acts necessary to constitute in-
fringement and who had no way of knowing that others
TRAVEL SENTRY v. TROPP                                      5
were acting in a way that rendered their collective con-
duct infringing.” Id. The majority’s suggestion that the
traditional principles of vicarious liability are not the only
way to show direction or control is contrary to the single
entity rule and the all elements rule, and would allow
independent parties to be held strictly liable for an in-
fringement that none of them individually commits.

     The majority’s proposed separation of direction from
control is contrary to this court’s precedent. Muniauction,
532 F.3d at 1330 (treating “control or direction” as a
single standard met “where the law would traditionally
hold the accused direct infringer vicariously liable for the
acts committed by another party that are required to
complete performance of a claimed method”). Nonethe-
less, the majority invites a “reasonable fact-finder” to
draw such a distinction and separately discusses direction
and control in its analysis. Maj. Op. 15-16. The major-
ity’s sub silentio separation of direction and control in its
analysis is both inappropriate and uncalled for, as the
majority’s speculation on this settled standard is unneces-
sary to resolve the case presently before this court.