Current Standard for Induced Infringement Allows for Liability Even Where No Single Party Performed All Steps of a Claimed Method

Authored by John C. Paul, D. Brian Kacedon, Daniel T. Sharpe III

Inducement, a form of indirect patent infringement, provides for liability where one party causes infringement by another. Under recent law, inducement may apply to situations where one party performs certain steps of a patented method and causes another party to perform the other steps (see Akamai Techs., Inc. v. Limelight Networks, Inc. and our previous discussion of it here). Stated otherwise, induced infringement allows for liability when no single party performs all steps of a patented method.

In Move Inc. v. Real Estate Alliance Ltd.,¹ the Federal Circuit found the need for an indirect-infringement analysis, even when a party is not liable for direct infringement. While agreeing with the district court that the facts could not support liability for direct infringement, the Federal Circuit vacated the summary judgment and remanded the case for the district court to evaluate induced infringement under the standard established in Akamai.

Background

Real Estate Alliance Ltd. ("REAL") owns the '989 patent, which covers methods for locating available real-estate properties. Claim 1 includes the steps of "selecting a first area having boundaries within the geographic area" and "zooming in on the first area of the displayed map to about the boundaries of the first area to display a higher level of detail than the displayed map." Move, the plaintiff in this case, operates multiple interactive websites that assist users in searching for available real-estate properties. In 2007, Move filed suit seeking a declaratory judgment of invalidity and noninfringement of REAL's patent.

Based on the district court's claim construction, the parties stipulated to noninfringement in 2009. REAL then appealed and the Federal Circuit vacated the district court's judgment, on the grounds that the claim construction used was flawed. On remand, both parties moved for summary judgment. The district court granted Move's motion after finding that Move's systems did not directly infringe because they did not perform all steps of the claim. Further, because Move did not exert direction or control over users who may have performed the remaining steps, Move was also not liable for direct infringement.

The Move Decision

On appeal, the Federal Circuit vacated the district court's grant of summary judgment and remanded for a determination of indirect infringement. Citing Akamai, the Federal Circuit restated the rule that induced infringement does not necessarily require direct infringement by a single entity.

First, the Federal Circuit affirmed the district court's holding of no direct infringement. The Federal Circuit agreed with the district court that, under the correct claim construction, there was no genuine issue of material fact because Move did not control or direct performance of all of the claimed method steps. In particular, Move (i.e., Move's computer system) did not select an area on the map—rather, a user selected the area and the system merely displayed the area selected by the user. And because Move's users—and not Move itself—chose which area to select in a map, Move could not be liable for direct infringement.

Although agreeing with the district court on direct infringement, the Federal Circuit then concluded that the district court failed to properly address indirect infringement. Specifically, because the Federal Circuit had clarified the law of induced infringement in its Akamai decision, it was necessary to evaluate the facts in Move under Akamai. Akamai, the court noted, established that, for induced infringement, all steps of a claimed method must be performed but need not be performed by a single entity. Accordingly, the court vacated the summary judgment in favor of Move and remanded for the district court to analyze whether Move both knew of REAL's patent and knowingly induced its customers to select areas in a map.

Strategy and Conclusion

It is important to evaluate induced infringement of method claims under the current law, as defined by the Akamai case. Induced infringement requires first that all steps of a claimed method were performed and further that one party both knew of the asserted patent and either performed or knowingly induced the performance of those steps. Thus, even where the facts do not support liability for direct infringement, they may support liability for induced infringement.

Endnotes

¹The Federal Circuit's Move decision can be found here.

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