By Jason Rantanen
Aristocrat Technologies Australia PTY Limited v. International Game Technology (Fed. Cir. 2012) Download 10-1426.Opinion.3-11-2013.1
Panel: O'Malley (author), Bryson and Linn
Aristocrat and IGT compete in the casino gaming machine industry; Aristocrat was the patent holder here. After construing the claims, the district court granted summary judgment of noninfringement under Muniauction v. Thomson, 532 F.3d 1318 (Fed. Cir. 2008), because no single actor performed all of the claimed steps. On appeal, the Federal Circuit affirmed the district court's claim construction and summary judgment of no direct infringement but remanded for further proceedings on inducement of infringement in light of its intervening en banc decision in Akamai Technologies, Inc. v. Limelight Networks, Inc., 692 F.3d 1301 (Fed. Cir. 2012). This is the second case this month to address the issue of joint/divided infringement.
The patents-in-suit relate to a gaming system in which an additional prize is awarded to a player through a secondary feature game appearing after the main game is completed. Most of the claim limitations relate to steps that would performed by the casino itself, such as "initiating a first main game at said particular gaming machine" and "awarding said one progressive prize from said plurality of progressive prizes that has been won."
One limitation, however, requires "making a wager at a particular gaming machine in the network of gaming machines." The district court interpreted this limitation to mean "betting, which is an act performed by the player." Aristocrat challenged this construction on appeal, contending that "making a wager" is merely "carrying out a bet" (and thus could be performed by the same actor that carried out the other steps). The Federal Circuit disagreed, noting the overwhelming support for the district court's construction. It rejected Aristocrat's other claim construction challenge based on similarly overwhelming amounts of contrary evidence. This opinion is a great example of what happens when a party tries to twist the meaning of a claim term far beyond what is reasonable or supportable.
Divided infringement (direct): Turning to the divided infringement problem the construed claims raised, the Federal Circuit began by affirming summary judgment of no direct infringement. The court first noted that Akamai expressly did not revisit the law of divided infringement as it applies to 271(a); to be liable for direct infringement of a method claim, a party must perform "all the steps of the claimed method, either personally or through another acting under his direction or control." Slip op. at 25, quoting Akamai. Under Muniauction, “the control or direction standard is satisfied in situations where the law would traditionally hold the accused direct infringer vicariously liable for the acts committed by another party that are required to complete performance of a claimed method.” Here, no single actor performed all the claimed steps and the Federal Circuit declined to conclude that the alleged conduct satisfied the "direction or control requirement. In doing so, it expressly rejected Aristocrat's argument that this requirement was satisfied due to the player's actions being "the 'natural, ordinary, and reasonable consequences of' IGT's conduct." Slip op. at 27.
Divided infringement (indirect): Applying Akamai, the Federal Circuit vacated the district court's summary judgment with regard to indirect infringement, an issue that neither the parties nor the district court expended significant time on. The Federal Circuit's opinion provides no substantive discussion on this issue but does highlight two key parts of Akamai that nicely sum it up:
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 infringer; 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.
Slip op. at 28. Here, Aristocrat deserved the opportunity to argue its indirect infringement theory with the benefit of the Federal Circuit's clarification regarding inducement.
Update on petitions for certiorari in Akamai and Epic v. McKesson: As noted by Dennis earlier this month, petitions for certiorari were filed in both Akamai and Epic v. McKesson. However, Epic and McKesson recently settled and Epic has withdrawn its cert petition. (Thanks to Tim Holbrook for pointing this out). Clarification: Both Limelight's petition and Akamai's conditional cross-petition remain pending.
I am loathe to accuse the patent draftsman of malpractice in this case. Perhaps the client insisted on the form of the claims or they resulted from the prosecution or some other factor influenced the wording. As a former patent examiner in the 1960s, I would like to believe that I (as the examiner of these claims) would have noticed the two actors in the steps and objected to the claims as indefinite citing 112 and have pointed out the problem to the prosecuting attorney. Did that happen in the prosecution of these patents? Probably not since 112 objections seem to have disappeared. There are some attentive examiners but most seem lax about claim definiteness. One cannot rely on them to correct 112 mistakes much less 271 lapses.
The claim language does seem to be old school in that care was taken to establish proper antecedents for limitations appearing subsequently in the steps, and the claim steps are supported by the specification flow charts. How the drafter missed the implications of writing the player into the flow charts and the claim steps is hard to understand.
A good deal of my career involved implantable medical devices where a variety of actors might interact with the IMDs in use, and so I guess I was sensitized to this issue. Method claims would be typically drafted to recite IMD functions only to protect the IMD from infringement. In a system context, claims were drafted to IMD and patient or physician or third party interactions with the IMD, but with an eye as to how such claims might be enforced against a seller of the IMD or a service provider that implanted or monitored or serviced the IMD in the patient’s body. For example. internet monitoring and reprogramming of implanted pacemakers involves a number of actors and separated IMDs and external devices, and so the safest approach involved apparatus and method claims to individual IMDs, external devices, and operative combinations.
Finally, this is one of the few instances I have ever seen where recitations of the prior art in the specification have been successfully used against the patentee to establish non-infringement. As the court pointed out it is fairly clear from the prior art discussions just what “wager” and “reward” and the party making and receiving the same was intended to mean. Now could you add that factor to the claim dysfunction to make out a case of malpractice?
“A patent draftsman must be sensitive to the limitations and pitfalls of method claims”
Does this then rise to the level of malpractice (dealer’s choice of which state to pursue any possible malpractice action)?
Without the benefit of the prosecution history, I wonder why the “making a wager” and “awarding” steps are even recited in the claims. Both are prior art steps that add nothing to patentability, and the remaining steps could have simply been written to reflect a response to the user interface activated by the player as stated in the claim preamble and the first step modified as below:
“In a network of gaming machines, each of said gaming machines having a user interface activatable by a player to affect game display -and make a wager- (added), each of said gaming machines being capable of accepting different wager amounts made by the player, a method of randomly awarding one progressive prize from a plurality of progressive prizes using a second game to select said one progressive prize, a display of said second game being triggered upon an occurrence of a random trigger condition having a probability of occurrence related to the amount of the wager, comprising:
[making a wager at a particular gaming machine in the network of gaming machines;](deleted)
initiating a first main game at -a- [said] particular gaming machine -in the network of gaming machines in response to a player activating said user interface-; . . .
identifying to the player said one progressive prize -that may be awarded- from said plurality of progressive prizes that has been won[; and
awarding said one progressive prize from said plurality of progressive prizes that has been won].
Alternatively, the “machines having a user interface activatable by a player to affect game display and make a wager” expression might also be simplified so that “game display and make a wager” are not even expressed, which still supports the first step.
A patent draftsman must be sensitive to the limitations and pitfalls of method claims. A simple final review of the claim asking the question “Who is going to infringe it?” would have revealed the faults of these claims.
“OK, but if the machine only performs part of such function”
A machine never performs “part” of “such function”(s). It does its function, period. Also, that is all irrelevant here because what is being performed is a step.
… but whether the language is BROAD enough to capture a machine performing part of such function.
OK, but if the machine only performs part of such function, don’t you still have the same divided infringement problem? It seems to me that you have to decide – does the machine perform the operation or not? It also seems to me that the answer is probably “no.”
I disagree entirely with the “making a wager” limitation
The applicant specifically amended the claim to remove the notion that it was a human PLAYER who “made the bet.” The CAFC’s retort on this point is clearly faulty, because in their opinion they say “well, this amendment did not LIMIT the claim to machine activity.” But this is a faulty starting point: the question is not whether the language LIMITs the activity to a human, but rather whether the language is BROAD enough to capture a machine performing part of such function.
Since even if the CAFC agrees that this language at most did not LIMIT to machines, it has implicitly ruled the machine actions in the specification are well within the limitation.
I’ve added a clarification – Epic has withdrawn its petition but Akamai’s remains pending.
Interesting that we’re not going to see any Supreme Court action on this issue, but it seems that the Federal Circuit has ended up at a reasonable place.
Off topic, a new case out today is a bit unusual. A 3-judge panel produced 4 opinions: /media/docs/2013/03/12-1185.pdf . Apparently this is what happens when you have individual judges trying to tell the district court how the case should be handled on remand…
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