April 2013
SJ of No Indirect Infringement by Gaming Machines Vacated and Remanded Under Akamai
| Judges: O’Malley (author), Bryson, Linn |
| [Appealed from N.D. Cal., Senior Judge Whyte] |
In Aristocrat Technologies Australia PTY Ltd. v. International Game Technology, No. 10-1426 (Fed. Cir. Mar. 13, 2013), the Federal Circuit affirmed the district court’s claim constructions of U.S. Patent Nos. 7,056,215 (“the ’215 patent”) and 7,108,603 (“the ’603 patent”), and affirmed the SJ ruling that International Game Technology and IGT (collectively “IGT”) did not directly infringe the ’215 and ’603 patents. The Court vacated and remanded the SJ ruling on the issue of indirect infringement.
Aristocrat Technologies Australia PTY Limited and Aristocrat Technologies, Inc. (collectively “Aristocrat”) and IGT compete in the casino game machine industry. Aristocrat owns the ’215 and ’603 patents, which relate to gaming machines and claim methods for awarding a progressive prize through a bonus game that may appear in addition to the main game.
Aristocrat sued IGT for direct and indirect infringement of the ’215 and ’603 patents. Following remand from a previous appeal on the issue of validity, IGT moved for SJ of noninfringement. The district court granted IGT’s motion, explaining that because IGT’s accused gaming devices required two separate actors—the casino via the gaming machine and the player—direct infringement was precluded as a matter of law. The district court also concluded that because there was no direct infringement, IGT did not indirectly infringe the ’215 and ’603 patents. Aristocrat appealed, and while the appeal was pending, the Federal Circuit issued its opinion in Akamai Technologies, Inc. v. Limelight Networks, Inc., 692 F.3d 1301 (Fed. Cir. 2012) (en banc).
On appeal, Aristocrat contested the district court’s construction of the claim terms “making a wager” and “awarding said one progressive prize,” and argued that material issues of fact existed as to whether IGT performed the “making a wager” and “awarding” steps under the district court’s constructions. The Federal Circuit agreed with IGT and the district court that the “awarding said one progressive prize” step must be construed as conferring rights from the operator of the game to the player. The Court reasoned that Aristocrat’s proposed construction of presenting or displaying the monetary amount due was inconsistent with the surrounding claim language and unsupported by the specification. The Court also dismissed Aristocrat’s argument that defining “awarding” in terms of conferring a legal entitlement would produce inconsistent treatment of the ’215 and ’603 patents in different jurisdictions, explaining that whether “a particular state’s law may complicate a player’s ability to enforce collection of their prize does not affect the operation of the system claimed in the asserted patents.” Slip op. at 17.
“For method claims—such as those at issue here—a patent holder must establish that an accused infringer performs ‘all the steps of the claimed method, either personally or through another acting under his direction or control. Direct infringement has not been extended to cases in which multiple independent parties perform the steps of the method claim.’” Slip op. at 25 (quoting Akamai Techs., Inc. v. Limelight Networks, Inc., 692 F.3d 1301, 1307 (Fed. Cir. 2012) (en banc)).
The Court also affirmed the district court’s construction of “making a wager” as “betting, which is an act performed by the player.” Id. at 24. The Court concluded that Aristocrat’s proposed construction of “making a wager” as merely carrying out a bet was inconsistent with the specification and unsupported by the prosecution history. The Court also rejected Aristocrat’s claim that the district court improperly disregarded as conclusory its expert’s declaration on construction. The Court reasoned that although the expert explained how a gambling machine’s software carries out a bet, he did not explain whether the patent’s use of making a wager refers to the steps performed by the gaming machine or the player: “By failing to explain why a person of ordinary skill in the art would understand ‘making a wager’ to describe the steps performed by the microprocessor in processing the best, [the expert] failed to support his assertion that ‘making a wager,’ as understood by a person of ordinary skill in [the] art, ‘means transfer of credits from the credit meter to the bet meter by the game software.’” Id. at 23 (citation omitted).
Turning to the issue of infringement, the Court found that under the claim constructions, no single actor performed all of the steps of the claimed methods, because a player, rather than a casino or game operator, performed the steps of “activating said user interface” and “making a wager.” The Court concluded that to be liable for direct infringement, IGT must exercise direction or control over a player playing the game: “For method claims—such as those at issue here—a patent holder must establish that an accused infringer performs ‘all the steps of the claimed method, either personally or through another acting under his direction or control.’ Direct infringement has not been extended to cases in which multiple independent parties perform the steps of the method claim.” Id. at 25 (quoting Akamai, 692 F.3d at 1307). The Court held that the district court correctly determined that no material issue of fact existed as to IGT’s lack of direction or control over the player.
The Court rejected Aristocrat’s contention that the player’s actions were the natural, ordinary, and reasonable consequences of IGT’s conduct in programming the gaming machine, stating that such a test was not recognized by the case law. The Court also rejected Aristocrat’s argument that a reasonable jury could find that IGT directly infringed during the testing of its machines, reasoning that there was no evidence of record that testers were given the right to use any credits or claim any prizes won in the course of such use. The Court thus affirmed the district court’s grant of SJ of noninfringement for liability under 35 U.S.C. § 271(a).
Lastly, the Court vacated and remanded the portion of the SJ order relating to indirect infringement, based on its decision in Akamai. The Court explained that under Akamai, a party can indirectly infringe by “knowingly induc[ing] others to engage in acts that collectively practice the steps of the patented method,” and that Aristocrat deserved the opportunity to press its indirect infringement theory with the benefit of the Court’s clarification. Id. at 28 (quoting Akamai, 692 F.3d at 1309).
As an alternative ground, IGT argued that remand could be avoided on the basis that the bonus game in its accused machines appeared during the main game instead of after it, whereas the asserted claims provide for “said second game appearing after competition of said first main game.” The Court disagreed, holding that the district court correctly found disputed issues of material fact as to when the main game completes.
