The Software IP Report

Yet Further Clarification on Indirect Divided and Joint Infringement

By Charles Bieneman

Categories: Patent Infringement, The Software IP Report

Under the doctrine of divided infringement, patent claims directed to a slot machine were properly found not to be directly infringed. Aristocrat Tech., Australia v. Int’l. Game Tech., No. 2010-1426 (Fed. Cir. March 13, 2013). However, for the second time in as many weeks, the Federal Circuit remanded a case to a District Court for further proceedings relating to indirect infringement based on the rules of divided and joint infringement articulated in Akamai Techs. Co. v. Limelight Networks, Inc., 692 F.3d 1301 (Fed. Cir. 2012) (en banc).

The patents at issue, U.S. Patent Nos. 7,056,215 and 7,108,603 “relate to gaming machines, such as slot machines, and claim methods for awarding a progressive prize through a bonus game that may appear in addition to the main game.” Claims of both patents included steps that indisputably had to be initiated by a player, rather than the game machine. The District Court, conducting its analysis under BMC Res., 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), had entered summary judgment of non-infringement. The District Court found that there was no direct infringement because there was not a single infringing actor carrying out, or directing and controlling, the claimed steps. Further, under BMC and Muniauction, there could be no indirect infringement where there was no direct infringement.

The court devoted much of its opinion to the patent owner’s arguments that the District Court had improperly construed the claims. Only after holding that the claims were properly construed did the Federal Circuit turned to the the district court’s summary judgment of non-infringement.

Even under Akamai, “[d]irect infringement has not been extended to cases in which multiple independent parties perform the steps of the method claim.” Here, the patent owner admitted that a player, and not a casino or game, performed a crucial step recited in one of the patent’s claims. There was no genuine issue of material fact concerning the accused infringer’s lack of direction or control over the player. Further, the court rejected the patent owner’s argument that a contractual obligation, or a natural result of the accused infringer’s conduct, could constitute direction or control.

With respect to another patent claim, the court here agreed with the District Court that the accused infringer’s testing of its machines could not constitute direct infringement because that testing lacked a claimed step of awarding a prize. Therefore, the District Court’s finding that there was no direct infringement was upheld.

However, Akamai mandated vacating and remanding the finding that there was no indirect infringement, specifically, infringement by inducement. The court explained:

As we stated in Akamai, “[r]equiring proof that there has been direct infringement as a predicate for induced infringement is not the same as requiring proof that a single party would be liable as a direct infringer.” Akamai, 692 F.3d at 1308-09 (emphasis in original). Thus, “[a] party who knowingly induces others to engage in acts that collectively practice the steps of the patented method—and those others perform those acts—has had precisely the same impact on the patentee as a party who induces the same infringement by a single direct infring-er; there is no reason, either in the text of the statute or in the policy underlying it, to treat the two inducers differently.” Id. at 1309.