United We Fall, Divided We Stand: The Divided Infringement Defense

October 2011

One of the more creative defenses that has arisen in the context of patent infringement litigation is called "divided infringement." Under this theory, a defendant is not liable if it performed some, but not all, of the infringing acts. For example, if the defendant is a software provider, then the defendant might claim--under a divided infringement theory--that it is not liable for patent infringement because it did not use the software (it simply provided the software to a customer that used it). Divided infringement has typically arisen in the context of method claims, where one party claims that it did not perform all of the steps in the method. This defense is available to both providers and customers on the theory that no one party is liable for infringement unless it performed all of the steps in the method claim.

One exception to the divided infringement defense is where the parties are considered joint infringers. Over time, courts have handed down various interpretations of what it means to be a joint infringer, from requiring an outright agency relationship to requiring that one party exercise "direction or control" over the other. In most provider-customer relationships, the customer is not an agent of the provider, and the provider does not exercise direction or control over the customer. In this regard, courts have held that the mere existence of an agreement (for example, a software license agreement or an application service provider agreement) does not make the parties joint infringers.

In a case handed down earlier this year, the U.S. Court of Appeals for the Federal Circuit held that the divided infringement defense applies not only to method claims but also to system claims. In Centillion Data v. Qwest Communications, 631 F.3d 1279 (Fed. Cir. 2011), the court held 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." The court explained that direct infringement by "use" of a system claim requires a party to use each and every element of the claimed system.

At least with regard to the customer, however, the court applied a somewhat expansive definition of "use." According to the court, to "use" a system, the customer need not be in control of over aspect of it. In this case, the court held that the customer "used" every element of the system by transmitting a message that "put[ ] every element [of the system] collectively into service." In other words, the customer need not have physical control over the relays as long as the customer had the ability to "[make] them work."

A related question in Centillion was whether the provider (Qwest) "used" the system simply because it operated the back-end processing and provided the software to the end user. The court held that Qwest never "used" the entire system because it never put into service the personal computer data processing means (a specific element of the claim). The court stated that "[s]upplying the software for the customer to use is not the same as using the system." The court further held that Qwest was not vicariously liable for the actions of its customers.

Section 271(a) of the Patent Act prohibits making, using, offering to sell or selling any patented invention within the United States. The issue in the Centillion case was whether Qwest and its customers "used" the patented invention; the issue of whether Qwest "made" the patented invention was not addressed. The message to be gleaned from Centillion and preceding cases applying the divided infringement defense is that both system and method claims should be analyzed with the specific purpose of determining whether a divided infringement defense may apply.


Amicable photo of Toni

Antoinette M. Tease, P.L.L.C.