“Divided” on “Divided Infringement”

“Divided” on “Divided Infringement” - The lessons from Akamai, McKesson and Zoltek

The last quarter of 2012 saw some important decisions delivered in patent lawsuits that led to creation of what some may call as “new standards” on induced or divided infringement. The major point of contention was on the liability of the parties when separate parties perform separate parts of a “method” claimed in a patent.  

Traditionally, in cases relating to induced infringement, the patentee (plaintiff) needed to prove that the defendant has induced another party to directly infringe the patent. Thus, under the old school, induced infringement required the proof that a “single party” performed all the steps of the method claim. However, the “single party” requirement was exploited by many to circumvent the claims and avoid costly lawsuits. This was especially true in the field of internet where multiple parties/entities are involved for completing a specific action. The “single party” requirement created problems for the patentee who often found it hard to find one party that performed all the elements of direct infringement. The people drafting the patent application were also forced to write claims keeping in mind the “single party” requirement for providing infringement. 

However, the decisions in Akamai vs. Limelight, McKesson vs. Epic Systems and Zoltek vs. United States have put open to interpretation, yet again, the requirements to prove infringement under 35 USC 271. The “new standards” as laid down in Akamai and McKesson, now require the patentee to only prove that (i) the defendant was aware of the patent, (ii) induced the performance of the method claimed and (iii) and those steps were performed. Thus, it is no longer necessary to prove that all steps were performed by a single party. Consequently, the defendant will be held liable even if performs some of the steps and actively induces others to perform the remaining steps of the method claimed. 

One can draw parallels with principles of “vicarious liability” and mens rea, which are often used in deciding liability of parties in criminal and contractual cases, in the “new standards” for deciding induced infringement. The knowledge of the patent and active inducement will make the defendant vicariously liable for the acts done by others. It is quite probable that the 6-5 en banc decision will be taken up by the Supreme Court in the near future for providing further clarity on the topic. Till then, the uncertainty on divided infringement is likely to continue.

Case Laws:

1.       BMC Resource vs. Paymentech

2.      Akamai vs. Limelight

3.      McKesson vs. Epic Systems

4.      Zoltek Corporation v. United States