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Pre-Akamai Decision Remanded for Analysis Of Inducement Instead of Joint Infringement

Wednesday, March 6, 2013

By Tony Dutra  

 

A grant of summary judgment for lack of joint infringement was premature since the lower court failed to conduct an inducement analysis, the U.S. Court of Appeals for the Federal Circuit ruled March 4 (Move Inc. v. Real Estate Alliance Ltd., Fed. Cir., No. 2012-1342, 3/4/13).

Applying its recent en banc holding in Akamai, the court agreed that an internet website system for zooming into real estate properties could not directly infringe a patent, even under a joint infringement theory based on users performing some of the method claim steps. However, the appeals court vacated and remanded the district court's decision for a determination of whether the website owner knew of the patent and induced users to perform the steps.

Does User or System 'Select'?

Real Estate Alliance Ltd. holds a patent (U.S. Patent No. 5,032,989) on computerized methods for locating real estate properties by zooming in on a map.

Move Inc., which operates websites allowing users to search for real estate properties, filed a lawsuit in the U.S. District Court for the Central District of California seeking a declaration that Real Estate Alliance's patents were invalid and that Move had not infringed.

Judge George H. King made claim construction determinations that led Real Estate Alliance to stipulate to noninfringement. Real Estate Alliance appealed, and in a nonprecedential decision, the Federal Circuit vacated and remanded with a revised claim construction. 413 Fed. App'x 280, 2011 BL 74957 (Fed. Cir. 2011).

Nevertheless, on remand, King granted summary judgment of noninfringement in Move's favor.

The claim term at issue is “selecting … a[n] area having boundaries within a geographic area.” Move's websites allow users to select a zip code, neighborhood, city, or point on a map and then the computer software display's the boundaries matching that selection. The district court ruled that a user of Move's system selects an already bounded area, while the term as used in Claim 1 of the '989 patent required computer involvement in the boundary selection.

Again, Real Estate Alliance appealed.

No Joint Infringement

Judge Alan D. Lourie first addressed whether there was joint, direct infringement, under 35 U.S.C. §271(a), by the combination of steps performed by the user and Move's system.

The court noted that its Aug. 31 en banc decision in a case that was initiated as a question of joint infringement was resolved under an inducement theory. Akamai Technologies Inc. v. Limelight Networks Inc., 692 F.3d 1301, 104 U.S.P.Q.2d 1799 (Fed. Cir. 2012) (173 PTD, 9/7/12). Accordingly, that decision left intact standards on joint infringement. especially from BMC Resources Inc. v. Paymentech L.P., 498 F.3d 1373, 84 U.S.P.Q.2d 1545 (Fed. Cir. 2007) (185 PTD, 9/25/07). That case held that the alleged infringer must have “direction or control” over the party performing the additional steps of a method claim.

In the instant case, the court agreed with Move that the district court had “correctly found that the Move computer does not do the selecting; a user does the selecting, and then the computer merely updates display variables to reflect the user's selection, which we expressly held did not constitute selection in the previous appeal.”

Further, the court said, “Move does not exercise direction or control over users of its websites,” leaving no genuine issue of material fact as to direct infringement.

But Inducement Analysis Missing

However, the district court had erred by not analyzing inducement under 35 U.S.C. §271(b), the appeals court said, and the lower court was now further bound by the holding in Akamai.

“[L]iability under §271(b) may arise when the steps of a method claim are performed by more than one entity, provided that the other requirements for inducement are met,” the court said, summarizing Akamai.

The court vacated summary judgment and remanded for the district court to assess those requirements, whether “the accused inducer, here, Move, knew of the asserted patent and performed or knowingly induced the performance of the steps of the claimed methods, and that all of those steps were in fact performed.”

Chief Judge Randall R. Rader and Judge Kimberly A. Moore joined the opinion.

Robin L. McGrath of Paul Hastings, Atlanta, represented Move. Rebekka C. Noll of Cadwalader, Wickersham & Taft, New York, represented Real Estate Alliance.


Text is available at http://www.bloomberglaw.com/public/document/Move_Inc_v_Real_Estate_Alliance_Ltd_Docket_No_1201342_Fed_Cir_Apr.

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