Indirect Patent Infringement Requires Direct Infringement

Because “a finding of direct infringement is a predicate to any finding of indirect infringement,” the Federal Circuit reversed a district court’s findings of indirect patent infringement where the evidence did not support a finding of direct infringement. Intellectual Ventures I LLC v. Motorola Mobility LLC, No. 2016-1795 (Sept. 13, 2017) (precedential) (majority opinion by Judge Dyk joined by Judge Taranto, Judge Newman concurring-in-part and dissenting-in-part).

At issue was claim 41 of US Patent No. 7,810,144, which recites:

A communications device, comprising:

a processor; and

a memory that stores at least one program usable to control the communications device,

wherein the communications device is configured to:

display a collection of file identifiers, wherein each file identifier represents a selectable file;

receive a user selection of at least one file identifier representing a file selected to be transferred to a second device;

display a collection of destinations identifiers, wherein each destination identifier represents a remote device having a numbered destination address on a circuit switched or packet switched network;

receive a user selection of at least one destination identifier as selection of the second device;

display a data entry field in which a text message can be entered;

receiving the text message;

encapsulate the text message with the selected file into a single combined file;

generate a unique transaction identifier that identifies a transfer of the single combined file; and

send the single combined file to the second device at its numbered destination address, the second device being configured to:

receive the single combined file irrespective of user action at the second device;

generate a delivery confirmation message confirming reception of the single combined file;

transmit to an authenticating device of the communications network, the delivery confirmation message;

provide an alert indicating reception of the single combined file;

display an identification of the communications device in relation to at least one of the selected file or the associated text file, wherein the identification includes at least one of a communications address of the communications device, a name of the communications device, or a username associated with the communications device; and

display at least a portion of content of the selected file or the text message, wherein the authenticating device is configured to:

generate a delivery report that indicates a delivery event and a time of the delivery event.

The patent owner, Intellectual Ventures, had argued at trial that defendant Motorola directly infringed the claim by testing Multimedia Messaging Service (MMS) functionality of accused phones, and that Motorola’s customers directly infringed the patent claim by sending “text-plus-photo messages” via MMS.

Treating the claim’s recitation of a “device configured” for certain functionality as a “system” claim under Centillion Data Systems, LLC v. Qwest Communications International, Inc., 631 F.3d 1279 (Fed. Cir. 2011), the court turned to the question of “where” infringing use of the claimed system had occurred under NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282 (Fed. Cir. 2005).  Under NTP, the place of “use of a claimed system under [35 USC § 271(a)] is the place at which the system as a whole is put into service, i.e., the place for control of the system is exercised and beneficial use of the system obtained.”  Under Centillion, the court had interpreted NTP to mean that to be found to be a direct infringer, “a party must put the invention into service, i.e., control the system as a whole and obtain benefit from it.”

The District Court had incorrectly held “that Centillion requires only that the infringer benefit from the ‘system as a whole,’ such that a benefit derived from any claimed component of the claimed system would suffice to demonstrate an infringing ‘use.’” The Federal Circuit thought, in contrast, that Centillion and NPT in fact require that a person’s “use” of a claimed system requires the person to “control (even if indirectly) and benefit from each claimed [system] component.” Further, the requisite “direct or indirect control” could be established only if the party had “the ability to place the system as a whole into service.”

Here, Motorola’s customers did not benefit from the recited “delivery report.” Contrary to Intellectual Ventures’ position, Centillion did in fact require such benefit for Motorola’s customers to be direct infringers. These benefits could accrue only to parties receiving the delivery reports, and there was no evidence to “support an inference that Motorola’s customers ever received the delivery reports.”

Intellectual Ventures “notably” did not even brief the theory that Motorola itself directly infringed claim 41 by testing its accused phones. Thus, there was no evidence of a direct infringer, i.e., a party who benefited from every component of the claim.  Limelight Networks, Inc. v. Akamai Techs., Inc., 134 S. Ct. 2111, 2117 (2014), established that “a finding of direct infringement is predicate to any finding of indirect infringement,” and therefore warranted “judgment as a matter of law regarding non-infringement of claim 41 of the ’144 patent” in Motorola’s favor.

Although not discussed in this blog post, it should be noted that the court also discussed questions of validity concerning the ’144 patent and a companion patent. Judge Newman dissented from the majority’s holdings with respect to validity, but agreed with the court’s reversal based on its “holding of non-infringement of the ’144 patent.”

Lessons for Practice

It is sometimes very difficult and computer and software patent cases to draft claims that are guaranteed to cover a single entity as an infringer. The present case is a good illustration of the importance of paying attention to the dangers of divided infringement, drafting challenges notwithstanding.

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Functional Claiming After Williamson v. Citrix
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