The U.S. Supreme Court recently reaffirmed patented business methods as part of the arsenal of protection available to patent holders, but these methods can be tricky to draft and enforce. In a case litigated to success after a highly publicized reversal of the district court’s ruling by the Federal Circuit, Vedder Price litigators had a chance to help clarify some of the rules on induced infringement of business methods.

Meyer Intellectual Properties Limited (Meyer) was the owner of U.S. Patent No. 5,780,087. The patent as written was directed at a method of frothing milk using the simple device shown. The claims, as written, are directed to a simple method with only four steps: (1) providing a special container, (2) pouring milk into the container, (3) introducing a special plunger with a screen and (4) pumping the plunger to aerate the milk.¹

The claim as written is broad and ambiguous. Vedder Price, representing a seller of frothing devices said to have infringed the method, argued that the defendant was only the provider of the special container and performed only one of the four steps. Arguably, the first step of the method would involve the manufacturer if it were written with a verb like “using” or “holding” of the special container instead of the verb “providing.” Only the user would have been a potential infringer of the method if the word “providing” were used. As written in the claim, one step is performed by one party (the manufacturer), while the other three steps are performed by a second party (the end user).

The Federal Circuit reaffirmed that the sale of a product, without more, does not directly infringe a method patent where the steps are directed to the actions of the ultimate user of the product. Direct infringement of a method claim requires a showing that every step of the claimed method has been practiced by a single entity.²

Under the law, a manufacturer who “actively induces infringement of a patent shall be liable as an infringer” on the theory of infringement by inducement.³ To succeed on an inducement claim, a party must establish that (1) there has been direct infringement, and (2) the defendant, with knowledge of the patent, actively and knowingly aided and abetted such direct infringement.

In this case, the court found that induced infringement was not the issue since, as written, the four steps of the method could be performed by either the defendant or the ultimate user. A large corporation selling coffee could infringe this claim by providing the products to its agents, who in turn would perform the subsequent steps.⁴

In cases where direct infringement by at least one party is found, induced infringement can be found in a second party under the recent new guidance of the Federal Circuit. The Federal Circuit overruled on August 31, 2012 its BMC decision,⁵ in which it had held that a party cannot be liable for induced infringement of a method claim unless some other single actor was liable for direct infringement of that claim.

The court articulated a standard whereby all of the steps of a method must be performed to find induced infringement but not by a single entity. There is no longer a need for a single actor, and there is no need for the induced party to be an agent of the inducer or to act under the inducer’s direction or control. It is now sufficient that the inducer “cause, urge, encourage, or aid” the infringing conduct and the induced conduct be carried out. The court clarified that proof of a direct infringement as a predicate for induced infringement is not the same as requiring proof that a single party would be liable as a direct infringer.⁶

Claim Drafting Tips

For a manufacturer to be found to have induced infringement, (a) the ultimate user must be able to perform all of the steps of the method, and (b) the manufacturer must “cause, urge, encourage, or aid” the user to perform all of the steps of the method. When a device is built in such a way that it simply cannot be used without performing all of the steps of the method, a manufacturer will be found liable for induced infringement if it willingly sells and teaches via a product guide how the user is to infringe the patented method.

¹ A method for aerating a liquid comprising the steps of: providing a container characterized by a height and a diameter, the height being at least two times the diameter; placing the liquid into the container; introducing a rod terminating in a plunger into the liquid in said container so that the plunger contacts the liquid, the plunger comprising; a plunger body having a circumference; a screen; and a spring positioned about the circumference of the plunger body such that the spring is biased to hold the screen in place in contact with, though not sealably connected to, the container; and pumping the plunger by moving the rod in a vertical motion such that the plunger passes through the liquid in the container for a time sufficient to aerate the liquid until it takes on a frothy or foamy consistency.

² Meyer Intellectual Props. Ltd. v. Bodum Inc., No. 2011-1329, slip op. at 18 (Fed. Cir. Aug. 15, 2012) (Robert S. Rigg, Vedder Price attorney for Bodum Inc.) (citing i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d 831, 850 (Fed. Cir. 2010), and Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1317 (Fed. Cir. 2009)).

³ DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1305 (Fed. Cir. 2006) (en banc).

⁴ Meyer Intellectual Props. Ltd. v. Bodum Inc., No. 2011-1329, slip op. at 19 (Fed. Cir. Aug. 15, 2012).

⁵ BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007).

⁶ Akamai Techs, Inc. v. Limelight Networks, Inc. and McKesson Techs, Inc. v. Epic Sys. Corp. See Akamai Techs., Inc. v. Limelight Networks, Inc., No. 2009-1372, 2012 U.S. App. LEXIS 18532 (Fed. Cir. Aug. 31, 2012) (en banc).