Docket No. 2016-2386, -2387, -2714, -1025
REYNA, LINN, CHEN
December 19, 2017
Brief Summary: DC grant of SJ for no direct infringement under § 271(a) vacated and remanded because, e.g., “[a] reasonable jury could conclude that [TS’s] activities do establish the manner of TSA’s performance of the final two claim steps” (Akamai V).
Summary: This FC panel opinion notes that this dispute regarindg Tropp’s US 7,021,537 and 7,036,728 relating to luggage locks accessible to airline security personnel (e.g., TSA) has been before the FC twice before (“Travel Sentry II”, FC 2012 (appeal of DC decision “Travel Sentry I”); Tropp, FC 2012). Here, Tropp appealed “Travel Sentry III” in which the DC entered SJ (i.e., deciding there are no genuine disputes of material fact) “that Travel Sentry and its licensees do not directly infringe any of the method claims in the ‘537 and ‘728 patents” under § 271(a) (make, use, offer to sell, sell, or import patented invention within or into the US). In Travel Sentry I, the DC held that TS “could be held liable as a direct infringer…only if it ‘controls the TSA’s performance’ of the last two claim steps”, concluded TS’s Memorandum of Understanding with TSA did not make TS “vicariously liable for the TSA’s actions”, and dismissed Tropp’s indirect infringement claim since there was no direct infringement by any entity under the FC’s “then-prevailing law” (Muniauction, FC 2008 (“defendant is not liable for direct infringement where it merely ‘controls access to its system and instructs [third parties] on its use’”)). Through a series of decisions (en banc “Akamai II” reversed and remanded by SCOTUS (2014) to panel opinion “Akamai IV” and finally en banc “Akamai V”), the FC held “that direct infringement under § 271(a) occurs where all steps of a claimed method are performed by or attributable to a single entity,’ and held that an entity is responsible for others’ performance of method steps where that entity directs or controls others’ performance or where actors form a joint enterprise” (“could be found when an alleged infringer ‘conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patent method’ and ‘establishes the manner or timing of that performance’”). “In the wake of Akamai V”, the DC in Travel Sentry III found SJ to be appropriate because “there is simply no evidence that [TS] had any influence whatsoever on the third and fourth steps of the method carried out by the TSA, let alone ‘masterminded’ the entire patented process.” The FC panel here explained the DC “found that Akamai V did not expand the scope of infringement under § 271(a), and did ‘not disturb the BMC Res./Muniauction test’”, “essentially conclud[ing] that Akamai V was strictly limited to its own facts, and therefore left all existing law under § 271(a) intact.” The FC panel concluded the DC committed three specific errors (“misidentified the relevant ‘activity’ at issue”, “misapprehended what types of ‘benefits’ can satisfy Akamai V’s first prong” (“characterization of the relevant ‘activity’”), and “mischaracterized what is required for one to ‘condition’ a third party’s participation in an activity or receipt of a benefit on the third party’s performance of one or more claim steps” (Akamai V’s second prong)). It therefore found error with its grant of SJ because, e.g., “[a] reasonable jury could conclude that [TS’s] activities do establish the manner of TSA’s performance of the final two claim steps” (by “set[ting] forth the steps TSA would need to follow inorder to use [TS’s] standard and obtain the associated benefits”, as in Eli Lilly, FC 2017 (e.g., “physicians cross[ed] the line from merely guiding or instructing patients to take folic acid to conditioning pemetrexed treatment on their administration of folic acid”)). Furthermore, here, TS “has the right and ability to stop or limit’ TSA’s ability to practice the final two claim step”. Thus, the FC panel was “satisfied that the context of this case can justify attributing TSA’s performance of the final two claim steps to” TS. Accordingly, it found the DC erred in granting SJ and vacated its judgment.