Fed Circuit Adopts New Induced Infringement Standard - Federal Circuit
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Fed Circuit Adopts New Induced Infringement Standard

Quick. Simple. Direct. Just how we like our patent decisions.

Last week, the Federal Circuit Court of Appeals adopted a new standard for induced infringement, holding that a patent owner no longer has to show that a single induced entity is liable for direct infringement, reports Patently-O.

In the 6-5 decision, the en banc court explicitly abandoned its 2007 BMC Resources, Inc. v. Paymentech, L.P. holding that, in order for a party to be liable for induced infringement, some other single entity must be liable for direct infringement.

So what was the problem with the old standard? The appellate court explained that it turned on two sections of 35 U.S.C. § 271:

When a single actor commits all the elements of infringement, that actor is liable for direct infringement under 35 U.S.C. § 271(a). When a single actor induces another actor to commit all the elements of infringement, the first actor is liable for induced infringement under 35 U.S.C. § 271(b). But when the acts necessary to give rise to liability for direct infringement are shared between two or more actors, doctrinal problems arise.

In the two cases, Akamai Technologies, Inc. v. Limelight Networks, Inc. and McKesson Technologies, Inc. v. Epic Systems Corporation, the Federal Circuit addressed whether a defendant may be held liable for induced infringement if the defendant has performed some of the steps of a claimed method and has induced other parties to commit the remaining steps (Akamai), or if the defendant has induced other parties to collectively perform all the steps of the claimed method, but no single party has performed all of the steps itself (McKesson).

This problem of divided infringement in induced infringement cases typically arises only with respect to method patents, and sometimes, is the natural way that a particular method will be practiced.

Until last week, Federal Circuit precedent interpreted section 271(b) to mean that, unless the accused infringer directs or controls the actions of the party or parties that are performing the claimed steps, the patentee has no remedy. Since the patentee's rights were plainly being violated by the actors' joint conduct, the appellate court realized that its interpretation was "wrong as a matter of statutory construction, precedent, and sound patent policy."

So that interpretation is gone. Under the new induced infringement standard, all the steps of a claimed method must be performed in order to find induced infringement, but it is not necessary to prove that all the steps were committed by a single entity.

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