Centillion Data Systems, LLC v. Qwest Communications Int., Inc. et al

Centillion Data Systems, LLC v. Qwest Communications Int., Inc. et al.
Docket No. 2010-1110, -1131
January 20, 2011
LOURIE, LINN, MOORE

Centillion appealed DC grant of SJ of non-infringement to Qwest. Qwest cross-appeals DC grant of SJ that the claims were not anticipated. The panel reversed and remanded the case. Centillion’s patents relate to systems for processing telephone call data (e.g., billing data) to customers in a format appropriate for a computer (including both a “back-end” system maintained by a service provider (e.g., Quest) and a “front-end” system maintained by an end user (e.g., personal computer). The DC “determined that [under 271(a)] no single party practices all of the limitations of the asserted claims” (e.g., the customer’s personal computer), citing NTP (FC 2005 (“put[ting] the system into service, i.e., . . . exercis[ing] control over, and benefit[ting] from, the system’s application”); BMC Resources (FC 2007), Cross Medical Products (FC 2005) (accused infringer must either practice every element or control or direct the actions of another that practices the element in question). The appeals panel first considered “what constitutes ‘use’ of a system or apparatus claim under § 271(a)”, and whether the customer’s use infringes the claims. It concluded “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”, citing NTP (“The ‘control’ contemplated in NTP is the ability to place the system as a whole into service… the end user must be using all portions of the claimed invention.”) In Quest’s accused systems, “but for the customer’s actions, the entire system would never have been put into service [which is] sufficient control over the system under NTP.” And the panel agreed with Quest that “it does not ‘use’ the patented invention under the appropriate test from NTP” (but, as discussed above, the customers do) or under a vicarious liability theory (citing BMC Muniauction (FC 2008) ([f]or process patent or method patent claims, infringement occurs when a party performs all of the steps of the process…[h]owever… in some instances, one party could be liable for infringement of a method claim even if it did not perform all of the steps”), Akamai Tech. (FC Dec. 20, 2010) (agency relationship or other contractual obligation required), Cross Medical (FC 2005) (manufacturer did not conduct surgery)). Regarding anticipation, Qwest argued that there are genuine issues of material fact regarding whether the alleged prior art system includes “summary reports as specified by the user”, and the panel agreed.