To be liable for patent infringement, a “single” entity must sell a product or perform all of the steps of a claim in a patent. If “two” different parties provide different components or different steps of the patented product or method, then there is no liability unless one party control or directs the other party.
In Golden Hour Data v. emsCharts (Fed. Cir. Aug. 9, 2010), two companies, namely, emsCharts and Softtech formed a strategic partnership. emsCharts manufactures a web-based program which charts patient information and integrates billing. Softtech manufactures computer-aided flight dispatch software which coordinates flight information. The two companies enabled their respective programs to work together and collaborated to sell the two programs as a unit. Golden Hour Data, the patentee, accused emsCharts and Softtech of joint infringement. In this case, neither party had sufficient control or direction over the entire product. Accordingly, the Court held that there was no joint infringement at least for the method claims. The Court mentioned that emsCharts may have been liable for patent infringement on the apparatus claims since emsCharts (i.e., a single entity) sold the combined software but the patentee failed to submit this issue to the jury at trial.
Strategic partnerships require both entities to work together not only on the product being developed for the end user but also on clearing a product for use in the marketplace to avoid patent infringement. For example, the partners may want to obtain opinion of counsel on specific patents. The partners may also want to allocate duties to indemnify, defend and hold harmless based on the jointly developed product(s).
I invite you to contact me regarding your patent questions at (949) 433-0900 or [email protected]. Please feel free to forward this article to your friends. As an Orange County Patent Attorney, I serve Orange County, Irvine, Los Angeles, San Diego and surrounding cities.