Another “key” decision on joint/divided infringement
| January 16, 2018
Travel Sentry, Inc. v. Tropp (Precedential)
December 19, 2017
Before Lourie, O’Malley and Taranto. Opinion by O’Malley.
Summary:
Recent developments in the joint/divided infringement case law allow David Tropp to revive his patent infringement lawsuit against Travel Sentry and various other luggage manufacturers. Tropp’s patents claim a method for luggage inspection, where the luggage manufacturer supplies special locks on luggage and a master key, and TSA uses the master key to inspect the luggage.
Details:
David Tropp sued Travel Sentry and various other luggage manufacturers for infringement of his patents on a method of performing luggage inspection by screening entities (for example, in airports, the Transportation Security Administration (“TSA”)) involving the use of a master key.
A representative method claim recites:
1) steps of “making available” and “marketing” to “consumers” a luggage equipped with a lock that can be opened by a master key, and
2) a step of “using” the master key to open the luggage, performed by a “luggage screening entity acting pursuant to a prior agreement… to use the master key previously provided”.
Travel Sentry has an agreement with TSA since 2003, whereby Travel Sentry supplied 1,500 master keys to TSA, and TSA “will make good faith efforts to distribute” the master keys and “to use” the master keys to open Travel Sentry bags “whenever practicable”, and “to relock” the bags after inspection.
This is the second appeal by Tropp to the Federal Circuit. Initially, in 2010, the district court granted summary of non-infringement to Travel Sentry, on the ground that Travel Sentry could not be a direct infringer since it did not have “control or direction” over TSA’s use of the master keys. “Control or direction” by a single actor was the sole test for direct infringement at the time, when different entities perform different steps of a claimed method. However, in 2014, the Federal Circuit’s en banc decision in Akamai v. Limelight repudiated the rule that direct infringement by a single entity is required for induced infringement. In its decision on the first appeal by Tropp, just after the Federal Circuit’s 2014 Akamai decision, the Federal Circuit remanded to the district court for determining whether Travel Sentry could be an indirect infringer, even without a direct infringer.
Shortly thereafter, the Supreme Court reversed the Federal Circuit’s 2014 Akamai decision and reaffirmed that direct infringement is a prerequisite to indirect infringement. In a 2015 en banc Akamai decision, the Federal Circuit then explained that direct infringement requires all steps of a claimed method to be “performed by or attributable to a single entity”. This attribution can be found where 1) an entity “directs or controls” the performance of steps by others, for example, through agency or contract, 2) the separate performers of the various steps form a “joint enterprise”, or 3) an entity a) “conditions participation in an activity or receipt of a benefit” to the performance of steps and b) “establishes the manner or timing of that performance”.
On remand of this case, the district court interpreted this new test for direct infringement restrictively. Accordingly, it again granted summary judgment of non-infringement to Travel Sentry, noting that TSA “faces no consequences from or by anyone for non-compliance” under the agreement with Travel Sentry. Travel Sentry filed this second appeal.
In this second appeal, the court starts by reviewing the facts in the Akamai case: Limelight provided website hosting services for customers. The customer was free to use or not the services, but if they wanted to use Limelight’s services, they had to follow the tagging and uploading instructions provided by Limelight.
The court also reviews the facts in another recent patent infringement decision involving performance of different method steps by different actors. In Eli Lilly v. Teva (Federal Circuit 2017), the method claims at issue recited steps of “administering” a chemotherapy drug (performed by physicians) and “administering” folic acid (typically performed by the patients themselves). The Federal Circuit concluded that the patient’s actions were “conditioned” by physicians. This conclusion relied heavily on the product labeling, which insisted that physicians should “instruct” patients to take folic acid, as well as on evidence in the record that, in practice, physicians did not administer the drug to patients unless the patients were taking folic acid.
From these facts patterns, the court summarizes that “mere guidance and instruction” is insufficient for “conditioning” a benefit, but conversely, it is not necessary to set up a system to “verify compliance”. Also, a “legal obligation” is not required.
Turning to Travel Sentry’s agreement with TSA, the court finds that, in order to obtain the benefit of opening and closing easily the Travel Sentry luggage, TSA must follow Travel Sentry’s pass key instructions, so that a reasonable jury could find direct infringement under the two prongs of the 2015 Akamai test, i.e., a reasonable jury could decide that Travel Sentry 1) conditions a benefit to the use of the master key and 2) establishes the manner of this use. The grant of summary judgment is reversed, and the case is remanded.
Takeaway:
The ideal practice is of course to draft claims where all elements are practiced by a single actor. But in some situations, this is impossible or inadvisable. For example, when the invention is directed to a patent-ineligible abstract idea, a product of nature, or a natural phenomenon, steps performed by different actors may be needed to define an “inventive concept”. For these situations, the decisions in Akamai, Eli Lilly and now Travel Sentry are the beginning of a rough map on how to avoid divided infringement.
