January 27, 2010

Maximizing Protection for Software Innovations

6 min

Software innovators can better protect their intellectual property by drafting patent claims with an eye toward how those claims may actually be interpreted in litigation. Many inventors view the issuance of a patent by the U.S. Patent and Trademark Office as an assurance of intellectual property protection. Yet, the courts are often unforgiving toward poorly drafted patent claims. Lack of proper foresight when drafting software claims may entangle the software innovator in litigation and leave the patent holder with an unenforceable patent. Drafting claims with potential infringers in mind will avoid some common pitfalls illustrated in recent litigation over software patents.

Infringement generally occurs when a single entity infringes all elements of a patent claim. Ideally, when drafting software claims, the practitioner should envision a competitor as a direct infringer, who practices all elements of a claimed invention, and tailor the claims accordingly. But, in some cases, the competitor may not practice all elements of the claimed invention, and this may force the plaintiff to establish liability by charging contributory infringement, inducement to infringe, or joint infringement.

For example, in Lucent Technologies, Inc. v. Gateway, Inc, 580 F. 3d 1301 (Fed. Cir. Sept. 11, 2009), the plaintiff alleged that the defendants were liable for contributory and inducing infringement. The patented claim in Lucent involved a method of inputting data into fields on a computer using software tools such as a graphical keyboard or calculator. The Lucent defendants were found to not practice all elements of the claimed invention. Yet, the plaintiffs successfully convinced the jury that at least one user of the defendant’s software infringed every element of the patented claim. The jury, therefore, found the defendants liable for both contributory infringement and inducement to infringe. However, the evidentiary burden to prove that a third party performed all the claimed elements can be very difficult.

Likewise, joint infringement can be used by a plaintiff to impute liability for the actions of a third party to a defendant. Joint infringement is a narrow exception to the rule that a single entity must perform all the elements of a patented method claim. The rationale behind joint infringement is that a party should not escape infringement by directing a third party to perform the some of the steps of a patented method. Joint infringement requires proof that a single entity, a mastermind, directed and controlled the performance of any step of the patented method which was not directly performed by the mastermind. Recent cases such as BMC Res., Inc. v. Paymenttech, L.P., 498 F.3d 1373 (Fed. Cir. 2007) and Muniauction, Inc. v. Thompson Corp., 532 F.3d 1318 (Fed. Cir. 2008), cert. denied, 129 S. Ct. 1585 (2009) have increased the burden on plaintiffs seeking to prove joint infringement.

Two cases, Global Patent Holdings, LLC. v. Panthers BRHC, LLC, 586 F. Supp. 2d 1331 (S.D. Fla. 2008), aff’d, 318 F. App’x 908 (Fed. Cir. 2009), and McKesson Information Solutions, Inc. v. Epic Systems Corporation, Case No. 1:06-CV-2965-JTC (N.D. Ga. Sept. 8, 2009), illustrate these recent decisions.

In contrast to Lucent, the claim at issue in Panthers was drafted to require both a web server and a computer user. The plaintiff argued that providing software on a website that allowed a user to begin the patented method demonstrated joint infringement between a user and the website. According to the plaintiff, any person accessing any website containing an image infringes the patented method. However, the district court found that the defendant’s actions did not rise to the level of directing and controlling the user as required by BMC and Muniauction. The Federal Circuit affirmed the district court’s decision granting the defendant’s motion to dismiss on the ground that the plaintiff failed to allege sufficient facts that the defendant performed all the steps of the patented method.

McKesson involved a patented method of communication between health-care providers and patients. Similarly to Panthers, the patented method required the actions of multiple parties to be infringed. As in Panthers, the court dismissed the case on summary judgment, holding that the defendant could not demonstrate genuine issues of fact concerning the direction and control of the software users. The district court also noted that the recent decisions, such as BMC and Muniauction, have “severely limit[ed] the protection provided for patents which would otherwise be valid and enforceable.” The court continued, “[a] potential infringer seeking to take advantage of a patented process could likely avoid infringement simply by designing its otherwise infringing product in a way that allows customers to decide initially whether to access it.” citing, Joshua P. Larsen, Liability for Divided Performance of Process Claims After BMC Resources, Inc. v. Paymenttech, L.P., 19 DePaul J. Art, Tech. & Intell. Prop. L 41 (2008). McKesson and Panthers show how much stronger a patent claim can be if it is drafted so that a single entity will be the direct infringer.

Patent practitioners should be aware that while drafting software claims so they are infringed by a single entity would strengthen the claims, this approach may be at odds with how software developers view their invention—as an interaction between multiple entities. For example, to foster a better end-user experience, software developers typically focus on how a software consumer will interact with the system. Even software manuals, although helpful in understanding the invention, may be detrimental to the patent practitioner’s goal of drafting claims so that they would be infringed by a single entity, if the manuals instruct users from an active first-person perspective.

If multiple entities must perform the steps of a patented method (e.g., an end-user or a computer), the only way to obtain relief may be to argue joint infringement. But, as seen in Panthers and McKesson, the requirement to prove both direction and control in hindsight can be an insurmountable hurdle to overcome in litigation. However, by drafting claims from the perspective of a single entity, a software innovator may avoid having to argue joint infringement, contributory infringement, or inducement to infringe.

Software will be better protected if claims are drafted from the perspective of a single entity, for example by using language such as “receiving a password” as opposed to “a user entering a password” or “receiving a user selection” as opposed to “a user clicking the mouse button.” Thus, a claim should avoid any third party interaction with the system and instead have the system “receive” or “transmit” thereby removing the necessity of proving direction and control of the user.

Practice tips include:

  • Before writing any claim, decide how a competitor would infringe the invention.
  • Maintain a consistent perspective throughout each element of a claim. In other words, the same entity must infringe each element of a claim.
  • Avoid relying on joint infringement. Draft claims from the perspective of a single party by not including required steps from both a system and a user.
  • If the invention encompasses multiple systems with different parties performing different steps, consider drafting separate independent claims which will be read on each individual part of the system.
  • An infringer who does not perform every element of a patented claim may still be found liable for contributory or inducing infringement. However, relying on indirect infringement increases both the cost and risk at trial because some entity, not necessarily a party to the suit, must be shown to perform all the elements of the patented claim.
  • Consider including manufacture and machine claims which avoid some of the problems associated with method claims.