McKesson Technologies Inc. v. Epic Systems Corporation, No. 2010-1291 (Fed. Cir. Apr. 12, 2011) (Judges Linn, Bryson, and Newman)

McKesson adds to a recent line of cases in which the Federal Circuit has articulated a higher standard for proving joint infringement. See also BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007); Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008); Akamai Technologies, Inc. v. Limelight Networks, Inc., 629 F.3d 1311 (Fed. Cir. 2010). There does, however, seem to be a fault line developing in the Federal Circuit’s jurisprudence with respect to joint infringement, which this opinion exposes. In fact, the court has just agreed to rehear Akamai en banc (more on this below).

Judge Linn wrote for the majority, and was joined by Judge Bryson, who also filed a short concurrence. Judge Newman wrote a fairly loud dissent, expanding on the dissent she wrote in Golden Hour Data Sys., Inc. v. emCharts, Inc., 614 F.3d 1367 (Fed. Cir. 2010).

The patent claim-at-issue recites a “method of automatically and electronically communicating between at least one health-care provider and a plurality of users serviced by the health-care provider.” Epic licensed its allegedly infringing software to health care providers, so McKesson accused it of inducing infringement rather than direct infringement.

All the steps of the claim but one are performed by Epic’s licensees. An outside user, however, had to perform the step of “initiating a communication by one of the plurality of users to the provider for information.” Epic moved for summary judgment of non-infringement citing the BMC line of cases, and the district court granted the motion. McKesson appealed that ruling.

The majority opinion reflects a fairly straightforward application of existing case law. Under Akamai, joint infringement requires a contractual obligation by the third party to perform the additional steps of the claim. There was no evidence of such an obligation here. The problem, according to Judge Linn, is one of claim drafting.

The opinion starts to get interesting when you reach the concurrence. Judge Bryson states that he agrees that precedent compels the majority’s result, but then adds, “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.”  We assume he voted in favor of rehearing Akamai en banc.

Judge Newman, in dissent, went further. In Golden Hour, she had criticized the view that collaboration by two entities without direction and control of one by the other was not joint infringement. Her primary concern here is that McKesson’s patent claim seemed to be “uninfringeable” (if that’s a word). “A patent that can never be infringed is not a patent in the definition of the law, for a patent that cannot be infringed does not have the ‘right to exclude.’  This court’s elimination of infringement, by creating a new but far-reaching restriction, is inappropriate.” Slip op. at 18 (Newman, J. dissenting). She worried, in particular, that the court is excluding from protection a whole category of new interactive technologies.

Judge Newman would treat joint infringement like joint tortfeasors generally. Let’s let Judge Newman have the last word:

Today’s holding, and the few recent cases on which it builds, have the curious effect of removing from patent eligibility the burgeoning body of interactive computer-managed advances.

A patent that cannot be enforced on any theory of infringement, is not a statutory patent right. It is a cynical, and expensive, delusion to encourage innovators to develop new interactive procedures, only to find that the courts will not recognize the patent because the participants are independent entities.

Slip op. at 29 (Newman, J. dissenting). Given the court’s decision to revisit the joint infringement issue in the Akamai case, we expect that this area of the law will continue to evolve as the courts and parties grapple with the practical application of infringement issues to increasingly complex multi-party relationships involving modern technologies.

You can read the court’s full opinion here.

 

In re Tanaka, No. 2010-1262 (Fed. Cir. Apr. 15, 2011) (Judges Linn, Bryson, and Dyk)

This case addresses an interesting question relating to reissue practice: is adding a dependent claim sufficient grounds for a reissue? The PTO said no. Judge Linn, writing for the majority, said yes. (Judge Dyk said no, in dissent.) Both opinions seem to dance around the real dispute, which is whether it is an error correctable by a reissue application to fail to include a dependent claim as a later hedge against invalidity of a broader claim.

In 2000, Tanaka received a patent for an “alternator pulley” that improves the performance of an automobile alternator. Two years later, he filed a reissue application, seeking to broaden independent claim 1. Eventually, he gave that up and sought reexamination of original claims 1-7 and the addition of new claim 16, which depended from claim 1. The examiner rejected this as an impermissible use of the reissue procedure, and the BPAI agreed. Tanaka appealed that decision to the Federal Circuit.

The majority agreed with Tanaka that the reissue statute, 35 U.S.C. § 251, allows a patentee to seek additional dependent claims “as a hedge against possible invalidity of the original claims…” Slip op. at 6. The majority relied heavily on a footnote in In re Handel, 312 F.2d 943, 946 n.2 (CCPA 1963), where Judge Rich wrote that “The narrower appealed claims are simply a hedge against possible invalidity of the original claims should the prior use be proved, which is a proper reason for asking that a reissue be granted.”

The majority noted that Tanaka had complied with the statute by surrendering his patent, and any public notice issue that might result could be handled by the intervening rights statute, 35 U.S.C. § 252. Although the majority relied upon statements in several opinions that are dicta, it concluded that the result is compelled by “the doctrine of stare decisis,” slip op. at 11.

And this is where Judge Dyk took issue with the majority. Judge Dyk pointed out that all of the statements the majority relied upon were dicta. For example, the holding in Handel had nothing to do with whether adding a narrower claim is sufficient reason to request reissue. In contrast, Judge Dyk relied on Gage v. Herring, 107 U.S. 640 (1883), to claim that precedent actually compels the opposite result. Yet the reissue filed in Gage was an attempted broadening reissue over 13 years after the patent had issued. See Gage, 107 U.S. at 644 (describing two claims in the reissue: one was the original patent claim and the other was five of seven elements of the original patent claim). Judge Dyk, like the majority, didn’t directly address why a new dependent claim that is added as a hedge against invalidity is or isn’t proper grounds for reissue.

You can read the court’s opinion here.

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