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Federal Circuit Developments Regarding Divided Infringement
Posted in Litigation, Patents

The divided infringement defense, also known as the joint infringement defense, requires that a single party infringe every limitation of a patent claim in order to establish a basis for liability. Therefore, no liability (direct or indirect) can be found where some elements of a patent claim are infringed by one party and others are infringed by a second party, except where the first party provides direction or control to the second party.

The divided infringement defense has grown more popular in recent years, paralleling the rising importance of system and method claims used to describe cutting edge computer software and business method inventions. The attention continues to build with the Federal Circuit’s recent decision to review the issue en banc in the case of Akamai Technologies, Inc. v. Limelight Networks, Inc.

In Akamai, the patents at issue involve streamlining the delivery of content on the web to a user’s computer display. The method claims under consideration recite not only steps taken by Akamai as a content delivery network provider, but also steps taken by its customers to utilize Akamai’s services. As a result, no single entity can be said to infringe every limitation of the claims. Although the jury issued a multi-million dollar verdict in favor of Akamai on divided infringement grounds, the U.S. District Court for the District of Massachusetts granted the defendant’s motion for judgment as a matter of law (JMOL) of noninfringement, finding that the defendant did not exercise sufficient direction or control over its customers to give rise to divided infringement. The court cited the earlier decisions in BMC Resources, Inc. v. Paymentech LP and Muniauction, Inc. v. Thomson Corp. as controlling. The District Court’s opinion was affirmed in a decision by a three judge panel of the Court of Appeals for the Federal Circuit in 2010.

Since the Federal Circuit’s affirmation, the court has issued two other precedential divided infringement opinions. The first, in Centillion Data Systems, LLC v. Quest Communications International, Inc., concerned the application of the divided infringement defense to a system claim rather than a method claim. The court held that the defense applies equally and requires a single defendant to use, or compel others to use, every claimed element in a system. The court noted, however, that a single defendant need not possess or even directly interact with every element; liability can be found where a single defendant puts the invention into service and obtains a benefit from it.

The second decision, McKesson Technologies, Inc. v. Epic Systems Corporation, also found no infringement based on the divided infringement defense. In this case, the patent claims at issue concerned a method for delivering instructions from a health care provider to patients over the internet. The Federal Circuit held that, because patients were not in a contractual or agency relationship that obligated them to perform the recited method steps, Epic could not be liable for infringement.

The rehearing of the Akamai case en banc is sure to keep divided infringement in the news for some time. Practitioners looking to avoid the pitfalls of the divided infringement defense should consider the method claim drafting strategies discussed in Nutter’s IP Bulletin in 2009 following the BMC and Muniauction decisions. Indeed, a common sentiment from the Federal Circuit is that the burden lies with patent prosecutors to appropriately define the boundaries of the invention—and that properly drafted claims (i.e., those that can be infringed by a single party) can sidestep this issue entirely.

This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.

This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.

  • Associate

    Derek Roller is an associate in Nutter’s Intellectual Property Department who has a wide range of experience spanning both patent prosecution and contested proceedings. Clients rely on Derek to help them navigate through patent ...

Maximizing the protection and value of intellectual property assets is often the cornerstone of a business's success and even survival. In this blog, Nutter's Intellectual Property attorneys provide news updates and practical tips in patent portfolio development, IP litigation, trademarks, copyrights, trade secrets and licensing.

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