McKesson Technologies Inc. v. Epic Systems Corp. (Fed. Cir. 2011)
The Court of Appeals for the Federal Circuit has again ruled that infringement of a patented method requires that a single entity performs all steps of the method. Other recent cases on point include BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007) and Muniauction, Inc. v. Thomson Corp., 552 F.3d 1318 (Fed. Cir. 2008). According to these cases, actions by third parties only count toward infringement if those parties are acting as agents of or under the control and direction of the single direct infringer.
In McKesson, the patented communications method requires action from a health care provider as well as multiple users. There was no infringement here because the users were not acting under the "control and direction" of the health care provider.
Inducement <> Control: Although the users were encouraged by the health care provider to take the would-be infringing step, encouragement alone is doctrinally insufficient to consider the users as agents of the health care provider. In his opinion for the court, Judge Linn noted that the users were not under a contractual duty to use the system and that the "voluntary actions of patients" were did not create an agency relationship.
An interesting aspect of the decision is that each judge filed an opinion.
Judge Linn, writing the "opinion for the court" indicated that the court was bound by prior precedent, but also argued that patentee's facing a joint infringement situation simply should have done a better job in claim drafting.
[I]n patent law, unlike in other areas of tort law, the patentee specifically defines the boundaries of his or her exclusive rights and provides notice to the public to permit avoidance of infringement. This stands in sharp contrast to the circumstances surrounding a joint tort where the victim has no ability to define the injurious conduct upfront and where, absent joint liability, the victim would stand uncompensated as a consequence.
This approach is supported by an interesting article by Mark Lemley, et al., that argues most divided infringement situations could be solved by better claim drafting.
Judge Bryson concurred in the judgment based upon binding precedent, but called for an en banc re-hearing.
I agree that the decision in this case is correct in light of this court's decisions in BMC Resources, Muniauction, and Akamai Technologies. Whether those decisions are correct is another question, one that is close enough and important enough that it may warrant review by the en banc court in an appropriate case.
Judge Newman dissented – arguing that the approach conflicts with prior precedent:
Earlier cases applied the law of infringement as a straightforward matter of tortious responsibility. For example, in Fromson v. Advance Offset Plate, Inc., 720 F.2d 1565 (Fed. Cir. 1985), the court held that contributory infringement was possible when a step of a method claim was practiced by the customer, and explained that "because [the manufacturer's] customers, not [the manufacturer], applied the diazo coating, [the manufacturer] cannot be liable for direct infringement with respect to those plates but could be liable for contributory infringement." Id. at 1568. This has been the law. It has never had en banc reversal.
Interestingly, the Fromson case has been repeatedly cited for the notion that customer actions cannot be used to support a direct infringement charge against a manufacturer. The case has only rarely been cited this additional teaching that inducing infringement does not require a single direct infringer. The first Federal Circuit decision holding that inducement requires proof of direct infringement appears to be Met-Coil Systems Corp. v. Korners Unlimited, Inc., 803 F.2d 684, 687 (Fed. Cir. 1986). In several post-1952 cases, the Supreme Court has stated that an invention must actually be infringed – i.e., practiced – before someone can be liable for indirect infringement. However, in those cases, the Supreme Court did not state that the actual infringement must be performed by a single entity, and a fair reading of those cases would allow for infringement-by-conspiracy.