Divided Infringement – Expanding Patent Infringement Liability
February 16 2017
In 2015, the Federal Circuit Court of Appeals cast the net of patent infringement liability even more broadly, to cover direct infringement by “divided” (or “joint”) infringement. Akamai Technologies, Inc. v. Limelight Networks, Inc., 797 F.3d 1020 (Fed. Cir. 2015) (“Akamai V”). In that case, the Federal Circuit established that a defendant can be liable for direct infringement of a method claim even when the defendant does not personally perform all of the steps of the method, as long as the steps performed by others are attributable to the defendant. Id. at 1022. The court held that the steps performed by another party are attributable to the defendant if: (1) the defendant “directs or controls” the other party’s performance; or (2) the parties form a joint enterprise. Id. The court further held that directing or controlling exists if two factors are met. First, the defendant must “condition” the other party’s participation in an activity or receipt of a benefit on the other party’s performance of a step. Second, the defendant must “establish the manner or timing” of the other party’s performance of the step. Id. at 1023. In Akamai V, the court emphasized that its new rule is flexible and that divided infringement may depend on the particular facts of a case. Id.
In Eli Lilly & Co. v. Teva Parenteral Medicines, Inc., 845 F.3d 1357 (January 12, 2017), the Federal Circuit put into practice its rule of divided infringement, demonstrating just how broad this theory of liability is.
Eli Lilly owned a patent covering a method of treating cancer patients with a chemotherapy drug after pretreatment with doses of folic acid and vitamin B12. Teva and several other drug manufacturers prepared to make and market generic versions of the chemotherapy drug. Eli Lilly sued the drug manufacturers for inducing infringement of the patent.
Inducing infringement is a type of indirect infringement. In order to be liable for inducing infringement, the defendant must have the intent to cause another party to infringe the patent, and the other party must be a direct infringer. 35 U.S.C. § 271(b). For example, a party induces infringement if it instructs another how to perform the steps of a patented method.
Eli Lilly contended that the defendant drug manufacturers induced physicians to infringe the patent by instructing them, in their written materials provided with the chemotherapy drug, how to pre-treat cancer patients with the folic acid and vitamin B12, and then treat with the chemotherapy drug. Eli Lilly further contended that the physicians directly infringed the patent. Eli Lilly agreed with the defendants that no one person performed all of the steps of the claimed method, but argued that this was a case of divided infringement. The physicians were the direct infringers because they performed the steps of administering vitamin B12 and the chemotherapy drug, and they directed the performance of the patients in administering the folic acid to themselves.
The case was tried to the district court, who ruled that the defendants had induced infringement of the patent, based upon the physicians’ direct infringement.
The Federal Circuit affirmed the decision. The court found that the district court had correctly determined that the physicians directed or controlled the patients’ performance in administering the folic acid. The first prong of the “directed or controlled” test was met. The physicians conditioned the patients’ participation in the chemotherapy drug treatment on the patients taking the folic acid. The evidence presented by Eli Lilly showed that the physicians would not go forward with the chemotherapy drug treatment unless the patient had properly taken the folic acid.
The court dismissed the defendants’ arguments that the physicians were merely guiding their patients or that the condition had to be a legal obligation imposed on the patients. The court emphasized that the analysis of attribution is not so narrow, and is fact-specific.
The court held that the second prong of the “directed or controlled” test was also met. The physicians specifically instructed the patients on the dose and timing of the folic acid. The patients carried out the physicians’ instructions in taking the folic acid.
Because the steps performed by the patients were attributable to the physicians, the physicians had directly infringed the patent. The court then addressed the question of inducement. The court held that the defendants had the specific intent to induce infringement by the physicians. The defendants had provided clear directions to the physicians on all of the steps of the claimed method (how the chemotherapy drug should be administered, and the pretreatment with vitamin B12 and folic acid).
This case demonstrates that the doctrine of divided infringement is a very strong tool for patent owners and an unexpected trap for would-be infringers.
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