Ramifications of Joint Infringement Theory on Emerging Technology Patents

Two cases decided by the U.S. Court of Appeals for the Federal Circuit articulate the standards for joint infringement. In BMC Resources, Inc. v. Paymentech, L.P., the court ruled that to find liability in situations where steps of a method claim are performed by multiple parties, the entire method must be performed at the control or direction of the alleged direct infringer — the mastermind. Approximately one year later, in Muniauction, Inc. v. Thomson Corp., the Federal Circuit clarified that “the control or direction standard is satisfied in situations where the law would traditionally hold the accused direct infringer vicariously liable for the acts committed by another party that are required to complete performance of a claimed method.” District courts have attempted to apply the holdings of BMC Resources and Muniauction in the two years following the Federal Circuit’s decisions. In deciding their cases, district courts have focused on how the asserted claims are drafted and the relationships between the accused infringer and third parties. Absent significant evidence of how an accused infringer controlled third parties, patent holders have found it difficult to support claims of infringement under a joint infringement theory. Further, courts have suggested that carefully drafted claims directed to a single actor would eliminate the need for patent holders to rely solely on joint infringement theory

Economic Theory, Divided Infringement and Enforcing Interactive Patents

High tech companies – especially in the emerging areas of the Internet of Things, wearable devices, and personalized medicine – have found it difficult to enforce their patents on interactive technologies. This is especially true when multiple parties combine to perform all of the steps of a claimed method. This problem is referred to as joint or divided infringement, and some commentators advocate that “interactive” patents susceptible to divided infringement should not be enforced. In contrast, this article argues that economic theory supports the enforcement of interactive patents. Previous papers have analyzed divided infringement problems from a doctrinal and policy perspective. This article is the first to analyze divided infringement from an economic perspective, using three prevalent economic theories of the patent system. Uniquely, all three prevalent economic theories of the patent system – (1) reward theory, (2) prospect theory, and (3) rent dissipation theory – support the enforcement of interactive patents. Reward theory is consistent with enforcing the rights of interactive patents so long as the patent system balances the social cost with the social benefit of interactive technologies. Prospect theory recommends enforcing interactive patents where it would promote an inventor’s ability to commercialize her invention free from direct competition. Finally, rent dissipation theory suggests enforcing interactive patents if it will effectively reduce the dissipation of patent rents. Viewing interactive patent enforcement through the lens of these economic theories reveals how doctrinal tests for divided infringement may align with the economic goals of the patent system. Although it is likely that the doctrinal test for divided infringement will continue to evolve, start-ups and disruptive, hi-tech companies who own interactive patents should find some guidance in the notion that the economic underpinnings of the patent system support enforcement of their interactive inventions

Trade Secrets, Safe Harbors, and International Trade

The Trans-Pacific Partnership (TPP) is a proposed trade agreement that establishes terms for trade and business between the United States and eleven Pacific Rim nations. The United States has withdrawn from the TPP, but interest in the agreement remains because some of its provisions serve as a template for future international trade deals. This article focuses on the TPP provisions concerning trade secrets and Internet Service Provider (ISP) Safe Harbors. While both provisions mirror U.S. law, they do lack certain safeguards. Commentators have observed that the absence of these safeguards unfairly favor the interests of large corporations and rights holders over individuals and the public. This article argues for a flexible approach that encourages participating countries to include safeguards in future trade agreements that are missing from the TPP. Adding these safeguards will balance the interests of individuals with the interests of corporations and large rights holders

Using Interactive Inventions

Interactive inventions are systems and processes that can be used by multiple actors at the same time. Many interactive inventions are the product of emerging technologies such as the Internet of Things that allow billions of everyday devices to communicate with each other via the Internet. Other interactive inventions are prevalent in the emerging fields of personalized medicine and FinTech (new financial technologies). Unfortunately, the law concerning how to determine liability when a patent directed to an interactive invention is infringed is dissonant across classes of inventions. Specifically, what it means to “use” an interactive system is different from what it means to “use” an interactive method. Why does the law treat these acts differently? Should it? This Article attempts to answer these important questions. Specifically, this Article contends that the current framework for what it means to “use” an interactive system is problematic. Interactive inventions are different than traditional method and system inventions. Unfortunately, courts have too often applied, especially in recent cases involving interactive systems, an outmoded framework to interactive inventions. When interactive inventions are analyzed under the proper framework, it allows for the application of sound legal principles to solve multi- actor liability problems. Specifically, this Article argues that a direct infringer “uses” an interactive system when it controls the system and obtains a benefit from it. This approach is also more consistent with the recently broadened standard for infringement of interactive methods

A Case Study of Federal Circuit Policy Making

The Federal Circuit\u27s legal decisions are perceived to have a significant impact on patent policy because of its close relationship with the patent bar and the United States Patent and Trademark Office (USPTO). Accordingly, litigants before the Federal Circuit may have the unique opportunity to directly influence patent policy. In a 2003 article, Professor Arti Rai suggested that if factual determinations concerning litigation were the responsibility of the USPTO and U.S. District Courts, then the Federal Circuit would be the ideal entity to make patent policy. Interestingly, during a recent panel at the 2013 Intellectual Property Symposium at the Southern Methodist University Dedman School of Law, judges from the Federal Circuit suggested that they would like to see more policy arguments made in appellate briefs. Policy arguments are generally not emphasized in Federal Circuit briefs, but if a litigant does advance policy arguments before the Federal Circuit, it is instructive to observe (1) how the policy arguments are constructed, and (2) whether the Federal Circuit expresses a policy preference in its opinion. As an example, one need look no further than the Federal Circuit\u27s recent en banc decision in Akamai Techs., Inc. v. Limelight Networks, Inc. (Akamai II) where a dissenting judge accused the majority of playing policy maker. This Article analyzes the Federal Circuit\u27s recent en banc decision in Akamai II from a policy perspective. This Article observes that the Federal Circuit\u27s fractured decision was, at least in part, due to unhelpful statutory language and tension between formalism and policy concerns. Further, this Article argues all three opinions issued in Akamai are in some way consistent with policy concerns raised by the plaintiffs and their amici. Finally, this Article raises several questions, including: When are policy arguments most effective? What are the current limits of the Federal Circuit\u27s policy making? And what is the impact on patent stakeholders when policy arguments are raised more frequently before the Federal Circuit

USPTO Issues Supplementary Examination Guidelines Explaining the Requirement for Clarity in Patent Claims

The US Patent and Trademark Office (USPTO) recently published Supplementary Examination Guidelines on the requirement that proper patent claims must allow the public to clearly distinguish what infringes from what does not. The Guidelines focus to some degree on computer-implemented inventions. The Guidelines acknowledge that computer implemented inventions have “unique examination issues.” But the Guidelines are important to patent applicants in all fields, perhaps more so in newer technologies with developing terminology, or where the invention is otherwise difficult to put into words

Emerging Technologies Challenging Current Legal Paradigms

U.S. patent law has made assumptions about where new inventions will be created, who will create them, and how they will be infringed. Throughout history, emerging technologies have challenged these paradigms. This decade’s emerging technologies will allow humans to create in virtual worlds, connect billions of every day devices via the Internet, and use artificial intelligence to invent across technology fields. If countries like the U.S. wish to encourage inventors to seek patent protection in these emerging areas, then a paradigm shift in the law must occur. Specifically, the law must clarify patent eligibility, recognize the increasing role of artificial intelligence in inventing, and continue to develop the doctrinal framework for enforcing interactive patents