Judge rules that Keurig can’t lock up the single-use coffee cartridge market
Keurig has a number of patents directed to its single self serve coffee makers. These patents cover the coffee maker and the method of using the coffee maker. Keurig makes a profit from both the sale of the coffee maker but also from the repeat business of consumers that buy its single-use coffee cartridge.
Sturm Foods sells competing coffee cartridges. Since Sturm isn’t selling a competing coffee maker, Keurig can’t enforce the patent directed to the coffee maker. Instead, Keurig accused Sturm of facilitating infringement by the end user of the method patents in Keurig v. Sturm (Fed. Cir. 2013).
Let me explain what is going on here for those unfamiliar with the basic structure of patent infringement. Infringement can be found in two different ways. The preferred type of infringement is direct infringement. The person that you sue is making, using, offering for sale, selling or importing the patented product into the United States. The second means to prove up infringement is indirect infringement. The entity being sued isn’t being accused of directing practicing your invention. Instead, the claim is that the entity is facilitating someone to infringe your patent. Suing on direct infringement is preferred over indirect infringement because indirect infringement requires the patent owner to also prove up that someone else is directly infringing your patent. Simply put, there is one less step to prove for direct infringement.
In Keurig’s case, Keurig is accusing Sturm of selling a cartridge that facilitates direct infringement of others. The people being accused of direct infringement are those that bought into Keurig’s coffee maker device. Here is the rub. How can the people that purchased Keurig’s coffee maker be thought to directly infringe Keurig’s patent? They purchased the coffee maker from Keurig. Instinctively, you know that Keurig’s customers cannot be direct infringers. The Federal Circuit agreed under the doctrine of patent exhaustion.
“Where a person has purchased a patented machine of the patentee or his assignee or his assignee, this purchase carries with it the right to use the machine so long as it is capable of use. … We conclude, therefore, that Keurig’s rights to assert infringement of the method claims of the ‘488 and ‘938 patents were exhausted by its initial authorized sale of Keurig’s patented brewers.” (emphasis added).
The good news is that purchaser’s of Keurig’s coffee maker can have a variety of coffee cartridges, and not solely those sanctioned by Keurig. Keurig can’t lock up the single-use coffee cartrige market. They need to allow others to come in. This is great for consumers. They can get great tasting coffee from others at a lower price.
Now, as a patent attorney, I read these cases to learn the rule of law but also to think of how I might be able to structure a patent portfolio so that you could have your cake and eat it too, if you were in Keurig’s position. One possible way would be to separate the two businesses. Keurig would be in charge of selling its self serve coffee makers. Keurig could spin off a separate business solely directed to the single-use coffee cartridges. This separate business would hold the patent rights to the method. In this manner, it is conceivable that the patent rights for the method claims directed to the single-use coffee cartridges is not exhausted when Keurig coffee makers are sold. Only the patent rights for the device are exhausted when the parent company sells coffee makers. I’ve never seen a court case with these fact scenario. Hence, I wouldn’t be able to predict how the courts will rule on this type of business structure. However, it would be pose an evolution in the fact pattern and a potential means of getting around this decision for those similarly situated with Keurig.
I invite you to contact me with 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 Lawyer, I serve Orange County, Irvine, Los Angeles, San Diego and surrounding cities.