SoCal IP Law Group

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Tag Archives: pleading

SoCal IP Institute :: October 27, 2014 :: Divided Infringement of System Claims and Pleading Inequitable Conduct

Our weekly SoCal IP Institute meeting on Monday, October 27, 2014 will be a discussion of two older cases. The first is a 2011 Federal Circuit case regarding divided infringement of a system claim and the second is a district court case on the requirements of pleading inequitable conduct after Therasense.

Centillion Data Systems, LLC v. Qwest Corp. Int’l et al., No. 2010-1110, 01131 (Fed. Cir. Jan 20, 2011) (available here).  Here, Centillion appealed a decision finding that there was no direct infringement of a system claim by Qwest.  In particular, Centillion’s claims included “backend” and “frontend” computer components such that the claims relied upon user’s computers to cause the backend components (servers, etc.) to begin to function.

On appeal, while discussing “use” infringement under 271(a), the Federal Circuit held “that to ‘use’ a system for purposes of infringement, a party must put the invention into service, i.e., control the system as a whole and obtain benefit from it.”  Qwest, as a matter of law, cannot use its own system that is reliant upon the personal computers of its users.  However, in this case, Qwest’s customers did use the system and were the direct infringers. However, Qwest did not vicariously infringe because “Qwest in no way directs its customers to perform nor do its customers act as its agents. While Qwest provides software and technical assistance, it is entirely the decision of the customer whether to install and operate this software on its personal computer data processing means.”

Cutsforth v. LEMM Liquidating, 2013 U.S. Dis. LEXIS 79385 (June 6, 2013) (available here).  Here, a defendant answered with a counterclaim of inequitable conduct and the plaintiff filed a motion to strike from the complaint.  The district court here found that LEMM Liquidating had adequately pled inequitable conduct where Cutsforth had previously asserted two patents during the pendency of a third and been presented with invalidity charts identifying several references that allegedly invalidated the patents.  That earlier case was soon thereafter dismissed prior to even an early meeting of counsel in the case.  Cutsforth submitted the references identified by that defendant in the then-pending patent, but did not provide the invalidity charts provided by that defendant to the PTO.  On that basis, the district court here found this withholding of the invalidity charts sufficient to meet the Therasense requirements at least at the pleading stage.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, October 27, 2014 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Smith by 9 am Monday morning.

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SoCal IP Institute :: June 18, 2012 :: Patent Infringement Pleading Standards and Indirect Infringement

We will be discussing two Federal Circuit cases during our weekly SoCal IP Institute meeting on Monday, June 18, 2012. Brief synopses are presented below.

In re Bill of Lading Transmission and Processing System Patent Litigation, Case Nos. 2010-1493, -1494, -1495, -1496; 2011-1101, -1102 (Fed. Cir. June 7, 2012) (attached).  In this case R + L Carriers, Inc. sued a number of defendants alleging infringement of a patent directed to a method of transmitting bills of lading from a truck cab, as the truck is in the process of transporting freight from a location to a destination.  The case was consolidated to the S.D. of Ohio wherein each of the complaints were dismissed as failing to identify specific customers who directly infringed.  The defendants in these cases provide systems that enable trucking companies to transmit the bills of lading.  The district court noted that for contributory infringement, R+L was required to allege that the accused products were not staple articles and that they were not suitable for substantial non-infringing uses.  R+L did not and, therefore, these claims were dismissed.  The remaining claims for indirect infringement were similarly dismissed. R+L appealed.

First, R+L argued that no direct infringement in an offer-to-sell case was necessary.  The Federal Circuit noted that this argument was incorrect under the law.  Direct infringement is always required.  R+L also argued that it adequately pled the presence of a direct infringer in each case.  On this the Federal Circuit agreed citing Form 18 of the Appendix of Forms to the Federal Rules of Civil Procedure.  The Federal Circuit indicated that these forms, though written before Twombly, were adequate to meet pleading requirements.  R+L’s pleading roughly fulfilled Form 18’s boilerplate language.  The Federal Circuit took the opportunity to subtly note its displeasure with the bare bones nature of Form 18.  With regard to one of the complaints, that against Intermec, the complaint simply alleged that “[Intermec] customers are in fact practicing the ‘078 Patent” without naming a specific direct infringer.  The Federal Circuit found that it was sufficient.

Turning to contributory infringement, the Federal Circuit found that R+L’s claims were not helped by Form 18, which was directed only to direct infringement.  Because the Federal Circuit agreed that there were many substantial non-infringing uses, the contributory infringement dismissal was affirmed.  Induced infringement was discussed at some length for each defendant, taking care to note the district court’s dismissal and the factual allegations associated with each defendant. In each case, the Federal Circuit found that, taking all reasonable inferences for the benefit of the non-moving party, the six complaints met the pleading standards for induced infringement.

Judge Newman dissented to voice concern regarding the adoption of the bare bones pleading standards of Form 18 for patent infringement actions.

Toshiba Corp. v. Imation Corp. et al., Case No. 2011-1204 (Fed. Cir. June 11, 2012) (attached).  Toshiba accused a number of DVD manufacturers of infringing two patents related to finalized DVD writing and the information associated with finalization.  The defendants moved for summary judgment on Toshiba’s claims of indirect infringement.  Because, the district court found that there were substantial non-infringing uses of the DVD’s, all indirect infringement claims must fail.  The parties stipulated to dismissal of the remaining claims and Toshiba appealed.

The Federal Circuit agreed with the district court’s decision regarding contributory infringement for the same reasons given by the district court. However, the Federal Circuit pointed out that the district court applied the law of indirect infringement incorrectly when it stated that a substantial non-infringing use was a bar to liability for infringement. As an alternative on appeal, the appellees argued that Toshiba failed to proffer evidence of direct infringement, a requirement for indirect infringement liability.  In response, the Federal Circuit relies upon circumstantial evidence to support at least one direct infringer and to enable Toshiba’s indirect infringement claim to survive summary judgment.

Toshiba also appealed the construction of claim 1, particularly as to an alleged “reading in” of a “purpose” to the construction of claim 1 when it construed claim 1 as requiring the identifying information on the DVD to provide identifying information for the entire recording medium.  The Federal Circuit agreed. Instead, the identifying information need only “uniquely identify a recording plane.”  The case was remanded for further proceedings.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, June 18, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Attalla by 9 am Monday morning.