AdvanceME v. RapidPay (E.D. Tex. 2007).
Traditionally, direct patent infringement requires a single actor that causes infringement of each element of the asserted patent claim. An agency doctrine allows for multiple actors acting under control of a single entity. However, the common law of patents has long resisted calls for liability for any looser form of "joint infringement."
In AdvanceME, the Texas court provided additional dicta expanding our notion of circumstances where two separate entities can combine to infringe a patent even when neither entity infringes all claim elements. Here, the court finds that multi-actor infringement requires (1) that all elements of the claim be performed and (2) that there be a “sufficient connection” between the accused actors. “A showing of ‘agency’ or ‘working in concert’ is not required.” The sufficient connection could instead “be shown through a contractual relationship.”
According to the court, joint infringement is easier to prove when a patent claim includes steps performed by two entities. The patent at issue here involves claims that move money from a customer to a merchant then to a merchant processor which is directly infringed by the merchant and merchant processor.
The infringement finding is, however, moot as the patent was also found invalid as anticipated and obvious.
Notes:
- Read the case
- The issue of joint infringement is “squarely raised” in another case – BMC v. PaymenTech. [See Divided Infringement]. Oral arguments were held in that case in April, and a decision is expected by October.
- The expanded joint infringement notion is supported by the CAFC's recent On Demand decision where the court noted that "[i]t is not necessary for the acts that constitute infringement to be performed by one person or entity."
- See Cross Medical (“However, if anyone makes the claimed apparatus, it is the surgeons, who are, as far as we can tell, not agents of Medtronic. Because Medtronic does not itself make an apparatus with the “interface” portion in contact with bone, Medtronic does not directly infringe.”)
- In PharmaStem, the CAFC did not decide the issue, but noted that the “viability and scope of [the theory of joint infringement] liability is a subject of considerable debate.”
- Applied Interact, LLC v. Vermont Teddy Bear Co., Inc. 2005 WL 2133416 (S.D.N.Y.,2005), the district court noted that infringement by separate entities requires “some connection” between the entities.
- Free Standing Stuffer, Inc. v. Holly Dev. Co., 187 U.S.P.Q. 323 (N.D. Ill. 1974), requires a “sufficient connection to, or control over” third party entities performing some of the elements.
- Cordis Corp. v. Medtronic AVE, Inc., 194 F. Supp. 2d 323 (D. Del. 2002) (requiring close relationship between defendant and the doctors performing part of the patented process).
- Shields v. Halliburton Co., 493 F.Supp. 1376 (W.D. La. 1980) (finding defendants liable for infringement based on the combined actions of two entities).
- Sriranga Veeraraghavan, Joint Infringement of Patent Claims: Advice for Patentees, 23 Santa Clara Computer & High Tech L.J. 211 (2006),
