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IP, Patent

On The Qwest For A Single Actor – Infringement Of Distributed “Systems”

Yesterday, the CAFC offered another look into how your patents will be interpreted years after they’re drafted.  As I noted earlier regarding the Akamai decision, “there is a world of difference between the use or existence of a patented process, system, or product, and whether that use or existence actually infringes the patent.” Yesterday’s decision involved accusations that Qwest Communications infringed a patent owned by Centillion Data, and offers a revealing look into the nuanced approach taken to determine the difference between existence of a patented system, and an infringing use

It is an act of infringement to make, use, sell, offer to sell or import a patented invention.  The accusations against Qwest involved making and  using a Centillion’s patented on-line banking system that included “personal computer data processing means.”  In other words, part of the claimed system was the bank customer’s personal computer. The CAFC disposed of the making claim pretty easily, saying that the “customer, not Qwest, completes the system by providing the ‘personal computer data processing means’ and installing the client software.” The analysis of using, was a bit more interesting.

The CAFC defined use of a patented system as “put[ing] the invention into service, i.e., control[ling] the system as a whole and obtain[ing] benefit from it.” Applying that logic to Centillion’s infringement arguments, the CAFC agreed that Qwest’s customers use the patented system when requesting specific information (referred to as the “on-demand” function), and when signing up for Qwest’s monthly reporting service (the “standard operation”).

By causing the system as a whole to perform this processing and obtaining the benefit of the result, the customer has “used” the system under § 271(a).

Of course, Centillion didn’t sue Qwest’s customers, it sued Qwest itself. As a result, the trial court will have to sort out whether there was any actual infringement (i.e. proof that a customer actually did use the system), and whether Centillion can carry its burden of proving that Qwest induced its customers to infringe. Absent that, Centillion lacks a remedy for these acts of infringement unless it can identify and sue individual customers.

Although Centillion argued that Qwest also used the patented system, the CAFC disposed of that argument pretty quickly.

While Qwest may make the back-end processing elements, it never “uses” the entire claimed system because it never puts into service the personal computer data processing means. Supplying the software for the customer to use is not the same as using the system.

Thus, the only way Qwest could be liable is under the vicarious liability theory discussed in Akamai. While some patent attorneys may spin this case as a win, justifying distributed system claims, the lack of direct infringement on the part of the service provider again demonstrates the challenges presented. Just as with method claims, system and apparatus claims should be carefully scrutinized by patent owners. Look at the elements recited in the claim, and consider whether any of them describe aspects of a product not under your direct control.

Practitioners should realize that the word use has two different meanings, depending on the type of claim. Using a method means performing the method, and direct infringement occurs when a single actor, or parties having a strict, vicarious liability relationship with a single actor perform all of the method steps.  Using a system means putting it into service, controlling it as a whole and obtaining a benefit. This case illustrates the importance of considering the perspective (deployment, control and benefit) from which the system is described.

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Discussion

3 thoughts on “On The Qwest For A Single Actor – Infringement Of Distributed “Systems”

  1. Patrick – I’m enjoying your blog. Keep up the good work!

    Dennis

    Posted by Dennis Crouch | January 24, 2011, 7:41 am

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