Direct infringement requires that party exercises “control or direction” over performance of each claimed step, but inducement does not have single-entity requirement

Shuji Yoshizaki | March 11, 2013

Move, Inc. v. Real Estate Alliance Ltd.

March 4, 2013

Panel:  Rader, Lourie and Moore.  Opinion by Lourie

Summary:

REAL owns the ’989 patent, directed to methods for locating real estate properties using a zoom-enabled map on a computer.  Move operates websites that allow users to search for available real estate properties.  REAL alleged that the functions employed by Move’s websites infringed REAL’s claims.  In the recent en banc decision of Akamai, CAFC decided an issue of divided infringement under § 271(b).  On the issue of direct infringement under § 271(a), CAFC found that there is no genuine issue of material fact that Move does not control or direct the performance of each step of the claimed method.  Therefore, Move is not liable for direct infringement.  However, CAFC vacated the summary judgment regarding indirect infringement under 35 U.S.C. § 271(b).  In en banc in Akamai, all the steps of a claimed method must be performed in order to find induced infringement, but that it is not necessary to prove that all the steps were committed by a single entity.  Since the district court summarily concluded that because Move, as a single party, was not liable for direct infringement, it could not be liable for joint infringement.  However, in Akamai, a single-entity requirement is not required in the inducement context.

Real社はコンピュータ上で拡大することが可能な地図を使用して、不動産物件の所在地を示す方法に関する特許を所有していた。一 方、Move社らは、ユーザーが不動産物件を探すことができるウェブサイトを運営していた。Real社は、Move社のウェブサイト機能がReal社の特 許を侵害すると主張した。

CAFCは特許法271条(b)項における共同侵害の成立要件に関して、昨年、Akamai判決(大法廷)を下し たが、本件では、Move社はクレーム方法の各ステップの実行を監督したり指示したりしていないので、特許法271条(a)項の直接侵害に関しては事実関 係についての実質的な争いはない。したがって、Move社の直接侵害はないと判断した地裁判決は正しい。

しかしながら、誘発侵害成立のため には、方法クレームの全てのステップが実行されることが条件ではあるが、全てのステップが単独で被告によって実行されていることは必ずしも要件ではないこ とをAkamai判決では判示した。ところが、本件の地裁判決は、Move社が単独で直接侵害がないがゆえに、共同侵害もないと判断している。 Akamai判決に従うならば、被告が単独で全てのステップを実施したかどうかは誘発侵害成立の要件にはならない。よって、特許法271条(b)項の間接 侵害に関する地裁のサマリージャッジメントを破棄し、誘発侵害の認定を地裁に差し戻した。

Details:

REAL owns the ’989 patent, directed to methods for locating available real estate properties using a zoom-enabled map on a computer.  Claim 1 recites:

1.         A method using a computer for locating available real estate properties comprising the steps of:

(a)        creating a database of the available real estate properties;

(b)        displaying a map of a desired geographic area;

(c)        selecting a first area having boundaries within the geographic area;

(d)       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;

(e)        displaying the first zoomed area;

(f)        selecting a second area having boundaries within the first zoomed area;

(g)        displaying the second area and a plurality of points within the second area, each point representing the appropriate geographic location of an available real estate property; and

(h)        identifying available real estate properties within the database which are located within the second area.

Move operates multiple interactive websites that allow users to search for available real estate properties.  In 2007, Move filed suit seeking a declaratory judgment that REAL’s patents were invalid and that Move’s websites did not infringe them.  REAL counterclaimed, alleging that the “Search by Map” and “Search by Zip Code” functions employed by Move’s websites infringed REAL’s claimed search methodologies.  In prior appeal to CAFC in 2009, CAFC construed that “selecting an area” in steps (c) and (f) of claim 1 means that “the user or a computer chooses an area having boundaries, not when the computer updates certain display variables to reflect the selected area,” and remanded to the district court.

On remand, based on the claim construction by CAFC, the district court granted summary judgment of noninfringement to Move.  The court held no direct infringements by Move since on the Move’s websites, a user first selects an already bounded area either by entering a zip code or by clicking on the name of a city etc., but then the computer merely updates the display variables to reflect the user’s selected area.  In other words, in Move’s systems, the user, not the computer, makes the “choice” having boundaries, but then the computer merely displays the corresponding map.  The district court also concluded that Move’s systems were not liable for joint infringement because Move did not exert direction or control over users who may have performed the selecting steps.

REAL appealed from the grant of summary judgment of noninfringement.

CAFC reviewed the district court finding of no direct infringement by Move.  To establish liability for direct infringement of a claimed method or process under 35 U.S.C. § 271(a), a patentee must prove that each and every step of the method or process was performed. See Akamai Techs. Co. v. Limelight Networks, Inc., 692 F.3d 1301, 1307 (Fed. Cir. 2012) (en banc).  In cases in which more than one entity performs the steps of a claimed method or process, a party is liable for direct infringement only if that party exercises “control or direction” over the performance of each step of the claim, including those that the party does not itself perform. Golden Hour Data Sys., Inc. v. emsCharts, Inc., 614 F.3d 1367, 1381 (Fed. Cir. 2010)  The determination is a fact specific inquiry; relevant considerations include whether the accused direct infringer “provides instructions or directions” to another entity for performing steps of the patented process or, on the other hand, “contract[s] out steps of a patented process to another entity.” BMC, 498 F.3d at 1381.

In the recent en banc decision of Akamai, CAFC decided an issue of divided infringement under § 271(b), rather than under § 271(a).  Akamai, 692 F.3d at 1307.  On the issue of direct infringement under § 271(a), CAFC agrees with the district court that there is no genuine issue of material fact that Move does not control or direct the performance of each step of the claimed method.  Since the performance of those steps is not attributable to Move, Move cannot be directly liable for infringing REAL’s asserted method claim.

The district court correctly found that the Move computer does not do the selecting; a user does the selecting, and then the computer merely updates display variables to reflect the user’s selection, did not constitute selection in a previous appeal.  Although certain steps of REAL’s claimed method may be performed by individuals using Move’s system, that does not equate to direct infringement or joint direct infringement because Move does not exercise direction or control over users of its websites.  Move’s computer does not select boundaries; it just loads a map after a user provides specific instruction as to his or her geographic area of interest; i.e., Move’s computer does not “choose” the neighborhood within the county, the user makes that selection, and then the computer just retrieves a map based on the programmed coordinates for that neighborhood.  As REAL’s own expert admitted, Move’s computer would retrieve the same map of Beverly Hills every time a user selected Beverly Hills or 90210 from a list of neighborhoods or zip codes in L.A. County, which is not a “choice” because the coordinates for Beverly Hills are already encoded.  Accordingly, the district court did not err by finding no genuine issue of material fact that Move is not liable for direct infringement of claim 1 of the ’989 patent.

However, CAFC disagreed with the district court finding of indirect infringement.  CAFC concluded that the district court legally erred by not analyzing inducement under 35 U.S.C. § 271(b).  In en banc in Akamai, CAFC clarified the law on inducement, explaining that all the steps of a claimed method must be performed in order to find induced infringement, but that it is not necessary to prove that all the steps were committed by a single entity.  In so holding, the CAFC overruled the holding in BMC that in order for a party to be liable for induced infringement, some other entity must be liable for direct infringement. Id.

The district court here summarily concluded that because Move, as a single party, was not liable for direct infringement, it could not be liable for joint infringement.  However, as CAFC explained in Akamai, a single-entity requirement is not required in the inducement context. Rather, liability under § 271(b) may arise when the steps of a method claim are performed by more than one entity, provided that the other requirements for inducement are met. See id. at 1306, 1318.

The district court failed to conduct an indirect infringement analysis.  The court did not determine whether a genuine issue of material fact existed as to the performance of all the claim steps—whether by one entity or several.  Moreover, the court did not analyze whether Move had knowledge of REAL’s patent and induced users to perform the claim steps that Move did not itself perform.

CAFC therefore vacate the district court’s grant of summary judgment and remand for a determination whether Move is liable for indirect infringement under the standard set forth in Akamai.  That standard requires that the accused inducer, here, Move, knew of the asserted patent and performed or knowingly induced the performance of the steps of the claimed methods, and that all of those steps were in fact performed.

Takeaway:

A method claim should be drafted such that single entity performs all the steps under the control or direction by that entity, for purpose of finding direct infringement.  However, for purpose of finding inducement, a single-entity requirement is not required in Akamai.

Full Opinion

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