In general, a claim can be divided into different elements such as steps A, B and C for a method claim.  For example, a hypothetical method claim for a new way to drive a car may recite “A method for controlling a car comprising the steps of grasping a joystick (i.e., element A), moving the joystick (i.e., element B) and transmitting GPS position of the car (i.e., element C).  When one entity makes, uses, sells or imports a device that incorporates all of the steps A, B and C or performs all of the steps A, B and C then that entity is infringing on the patent.  However, when two different entities collectively practice all of the steps, but not individually then neither entity is infringing on the claimed invention.  For example, if the driver performs steps A and B but a third party does the transmitting step then the driver and the third party do not infringe the method claim.  Accordingly, the claims when drafted should be directed so that the claim can be infringed by one entity. The following case illustrates this issue.

SiRF (alleged infringers) manufactured and sold GPS units to end users.  Global Locate (patentee) held patents related to GPS technology.  The claims of the patents at issue required the step of transmitting data to the end user and processing the data at the GPS receiver.  SiRF contended that they did not perform all of the steps recited in the claims of the patent, namely, the processing step.  SiRF transmitted the data to the end user but the GPS receiver operated by the end user processed the data.  The end users performed the processing steps with the GPS receiver.  Accordingly, it appears that no single entity performed all of the steps of the claimed method.  Nonetheless, the court held that SiRF performed the processing step even though the GPS receivers were being used by the end users.  The reason is that the GPS receivers were built and sold by SiRF enabled and ready to process data.  SiRF’s device automatically performed the processing step.  Hence, the Court held that SiRF infringed the asserted claims.  SiRF Technology v. ITC 2009-1262 (Fed. Cir. April 12, 2010)

The following case involved a copycat footwear that looked similar but not identical to Crocs.  The copycat footwear was being sold by quite a few companies.  Crocs had a design patent directed toward their footwear and sued these companies.  Design patents protect the ornamental look of a product.  Design patents do not prevent others from incorporating or copying a utilitarian function – that is the function of a utility patent.  Fortunately for Crocs, recent cases have broadened the scope of protection afforded by a design patent.  Crocs was ultimately successful in obtaining a judgement of infringement against at least some of the eleven companies.

The present case clarifies the new standard of design patent infringement which is the ordinary observer” test.  Under this test, infringement exist if the ordinary observer, familiar with the prior art designs, would be deceived into believing that the accused product is the same as the patented design.  The Court emphasized that the test looks to the overall design and does not place undue emphasis on details. In comparing the accused product and the patented design, the Court conducted a side by side comparison and looked to the overall effects of the patented design.  For example, in the present case, one of the overall effects of the of the patented design that helped the Court to decide that the copycat footwear infringed the design patent is that the patented design created a focal point through the convergence of multiple major design lines and curves which was incorporated into the copycat footwear.  The Court held that despite minor differences between the accused product and the patented design, the accused copycat footwear still infringed Crocs’ design patent.  Crocs, Inc. v. ITC, 2008-1596 (Fed. Cir. Feb. 24, 2010).

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(1) provide actual notice to the infringer of your patent,
(2) demand that they immediately cease and desist in their infringing activity, and
(3) offer a license without any express threat of infringement, among other things.

However, the cease and desist letter may allow the alleged infringer to file a declaratory judgment action (“DJ Action”) against the patentee when the correspondence between the parties indicate that there is a threat of litigation. The DJ Action allows the alleged infringer to take the initial legal steps and prevents the alleged infringer from having to wait for the alleged infringer to initiate a lawsuit while the patentee continues to threaten litigation. The DJ Action requests the court to resolve the dispute between the parties.

In many instances, the DJ Action is undesirable for the patentee. The DJ Action may be filed in a different state forcing the patent owner to incur additional costs and burdens of litigating out of state, while providing a convenient, home town advantage for the alleged infringer.

Accordingly, it is important to carefully draft the correspondence to the alleged infringer so as to achieve the desired results – no DJ Action while opening the door to amicably resolving the dispute. In the following case, the patent owner did not want to litigate the patent issue but was dragged into court by the alleged infringer by way of the DJ Action.

Acceleron LLC (“Acceleron”), a patent holding company, sent a letter to Hewlett Packard Company (“HP”) providing notice of an issued patent that Acceleron owns, requesting that HP not file a DJ Action and requesting that HP agree to not file the DJ Action. Additional letters were sent between the parties. HP filed the DJ Action. Acceleron sought dismissal of the DJ Action. Hewlett-Packard Co. v. Acceleron LLC, 2009-1283 (Fed. Cir. Dec. 4, 2009).

For patent cases, a declaratory judgment action is appropriate if the patent owner asserts its rights under the patent based on certain ongoing or planned activity and where the alleged infringer contends that it has the right to engage in the accused activity without a license to the patent. HP contends that the DJ action is proper since Acceleron identified its patent and HP’s product line in the demand letter. The court disagreed. Rather, the court said that the propriety of the DJ Action is whether HP had a reasonable belief of litigation based on the totality of the circumstances.

In reviewing the totality of the circumstances, the court considered the content of the letters sent between the parties and also considered Acceleron’s business model. Acceleron is a patent holding company that generates revenues by enforcing its rights and obtaining licenses from infringers under its patents. The Court indicated that this fact favors a decision that there was a sufficient threat of litigation. Based on various items in the letters sent between the parties and the business model of the owner of the patent, the Court held that the DJ Action is proper.

It is thus important to consider the tone and content of the demand letter but also other circumstances that might allow the alleged infringer to file a DJ Action. In the Acceleron case, the patent owner’s business model of licensing patents for profit, while making no patented products, was a factor in the Court’s ruling that the DJ Action is proper.

You may also be interested in Stopping Infringement.

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This case dealt with the issue of whether liability for contributory liability should be viewed with respect to the computer drive (i.e., system level) in which case Quanta would not be liable for contributory patent infringement or at the component level in which case Quanta would be liable for contributory patent infringement.

The Court held that viewing liability for contributory patent infringement at the system level would allow any competitor to merely add different parts having non-infringing uses to a component specifically designed to infringe a patent to avoid liability for contributory infringement.  For this and other reasons, the Court held that liability for contributory infringement can be found at the component level.

For a brief explanation between direct and indirect infringement, read Avoiding Patent Infringement.