Indirect Infringement: What is it and how to prove it?
Receiving a patent does not automatically provide patent holders with security against patent infringement of the patent. When a patent holder feels that their innovation is vulnerable, they must take necessary measures to protect their invention from exploitation. This includes the patent holder proceeding for a patent infringement litigation. In 2019, for example, patent holders across the US filed 3,446 patent infringement lawsuits.
Patent infringement occurs in broadly two forms: Direct Infringement and Indirect Infringement (which can further be divided into induced infringement and contributory infringement).
A patent is said to be directly infringed when a person without authority makes, uses, offers to sell, or sells any patented invention during the term of the patent.
To claim direct infringement a proof or finding of prior knowledge of the patent or intent is not required.
For direct infringement to be present, every claim limitation must be practiced or performed. The limitations can be practiced in a final product or when the product is assembled.
In the case of patented processes, it is required that each limitation or step is performed by the same party (infringing party).
For a patented system, a person who uses a patented system, is liable for direct infringement even if all the components or parts of the system are not controlled by the person.
Direct infringement implies that the unauthorized version of the invention either performs the same function as the original or meets the original’s description. Direct infringement is easier to identify within an infringing product.
Akamai Technologies, Inc. v. Limelight Networks, Inc. - Akamai Technologies, Inc., owns a patent that covers a method for efficient delivery of web content. The claimed method consists of placing some of a content provider’s content elements on a set of replicated servers and modifying the content provider’s web page to instruct web browsers to retrieve that content from those servers. Akamai filed a complaint against Limelight Networks, Inc., alleging both direct and induced infringement of the patent. Limelight, however, does not modify the content providers’ web pages itself but instructs its customers on the steps needed to do that modification. Limelight was held not to infringe the patent because Limelight’s customers performed one of the steps of the claimed method.
NTP, Inc. v. Research in Motion, Ltd. - The patents-in-suit concern a wireless electronic mail system that pushes e-mail to an end user. The BlackBerry relay component of the accused system is located in Canada and RIM argued that certain steps of the allegedly infringing activity took place outside of the United States. RIM asserted that the entire accused system and method must be contained or conducted within the territorial bounds of the United States for § 271(a) to apply. The Federal Circuit ruled, however, that when two domestic users communicate via their BlackBerry devices, their use of the BlackBerry system occurs within the United States. The Court reasoned that the location of RIM’s customers and their purchase of the BlackBerry devices establish control and beneficial use of the BlackBerry system within the United States and § 271(a) is valid.
Indirect infringement on the other hand is tricky to recognize. Before diving deep into the indirect infringement, let us see what 35 U.S. Code § 271 discloses about patent infringement.
35 U.S.C. § 271(b) Whoever actively induces infringement of a patent shall be liable as an infringer.
35 U.S.C. § 271(c) Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial non infringing use, shall be liable as a contributory infringer.
Based on the statues, we have two types of indirect infringement: induced infringement and contributory infringement.
Inducement of Infringement holds a person responsible for inducing infringement of a patent as an infringer.
Liability for induced infringement of a patent is defined by 35 U.S.C. § 271(b)
The infringer in this case does not commit direct infringement. He induces others to perform the direct infringement. The person can induce infringement by selling a product with instructions. The instructions when performed by a user of the product leads to direct infringement.
For a person to claim induced infringement it is required that there exists direct infringement.
It is also required that the accused party had prior knowledge of the patent at issue. A finding of willful blindness is sufficient to show knowledge.
Another necessary but not sufficient condition to claim induced infringement is proof of intent. Though the statue 35 U.S.C. § 271(b) does not explicitly mention intent but the case law made proof of intent a necessary requirement.
Contributory infringement defines a means by which a person is held liable for infringement. This does not require the person to actually engage in the infringement. It is found when a person sells a component to be used in a patented product or process.
Liability for contributory infringement of a patent is defined by 35 U.S.C. § 271(c).
Similar to induced infringement, for a person to claim contributory infringement it is required that the existence of direct infringement is proved.
Another requirement for a person to claim contributory infringement is that there must be an evidence showing that the alleged contributory infringer knew of the patent and had specific intent that his or her actions would lead to infringement of the patent.
Also, the infringing product or commodity or article should have no non infringing uses. For example, an accused product available for sale and configured to perform an infringing use along with other uses is not a sufficient proof for supporting the contributory infringement claim.
Since the accused product is adapted to be used in a patented invention only, a higher level of guilt is present in contributory infringement.
Now that we have knowledge about indirect infringement, let’s look at some prominent cases concerning indirect infringement. Proving indirect infringement is difficult. As described earlier, there are a plurality of claims a plaintiff should make to provide evidence for the infringement. With each case related to indirect infringement, the companies are getting a clear picture of the risks involved in this infringement and the problems that may arise.
The Global-Tech decision drew a new picture on the indirect infringement canvas. In the decision, the Supreme Court held that a defendant must have actual knowledge of, or be “willfully blind” to infringement for induced infringement to arise.
With the Commil decision, the problems grew. In Commil, the United States District Court for the Eastern District of Texas ordered a second trial after it withdrew a prior finding of no induced infringement. In the second trial, the district court then instructed the jury that it could find inducement if Cisco actually intended to cause the acts that constitute direct infringement and that Cisco knew or should have known that its actions would induce actual infringement. This was followed by the jury awarding Commil $63.7 million for Cisco’s induced infringement. The Federal Circuit dismissed the verdict, holding that the district made a mistake in preventing Cisco from presenting evidence regarding patent invalidity. Such evidence along with defendant’s belief on non-infringement, should be considered in determining whether an accused party knew that the induced acts constitute patent infringement.
Convertible Top Replacement Co., Inc. owned rights to a combination patent US2569724A (a patent granted for an invention that unites existing components in a novel way) for a top structure for convertible automobiles. Convertible Top filed an infringement suit against Aro Manufacturing Co., Inc.), who, without a license, made and sold replacement fabrics to fit Ford cars using the patented top structures. Ford Motor Co., had no license for the top structure during that period. Ford paid the patent owner $73,000 to release Ford, its dealers, customers and users from all claims of infringement. That holding was reversed by Supreme Court on grounds that the fabric replacement is repair and not reconstruction and does not imply direct infringement by the car owner to which Ford could contribute. On remand, the District Court dismissed the complaint. The Court of Appeals reinstated the judgement that since Ford was not licensed to produce the top structures, Aro's sale of replacement fabrics aided contributory infringement even though it was a repair. Also, the patent owner's attempt, in the agreement with Ford, to reserve the right to license future replacement sales was invalid. After the July 21, 1955 agreement, Ford car owners had authority to use and repair the patented top structures and hence, they were no longer direct infringers, and hence petitioners such as Aro, sellers of replacement fabrics for such use and repair, were not contributory infringers.
These cases showcase the additional challenges for patent owners to prove types of indirect infringement. Now the parties enforcing licenses, making accusations of indirect infringement should have well-supported claims to ensure that they avoid the hurdles for proving the infringement.