Intellectual Property Directions

I recently got a call from a person referred to me for some IP advice – the question was what should he do, now that he’s found someone else has 3 patents that look a lot like they cover the product he is already selling. What if, he asked, he only sold the bits and pieces as a kit – each item was easily and inexpensively purchased at the wholesale level and the instructions for assembly could be followed by anyone who had a modicum of mechanical aptitude.

For someone new to the world of commerce and intellectual property, the answer to this question is not obvious. And the issue is surely made more complex by the patent office’s less than stellar examination process – if you are looking at a poorly examined patent, one that is “obvious” but allowed pre-KSR – do you take the risk of infringing, hoping that the patentee will think twice about challenging you, or do you bite the bullet and find a new product to take to market? Or, like this person, do you look for some wiggle room – sell a kit, rather than the item described in the patent, or maybe just sell the parts list and assembly instructions and let the patentee worry about suing all the individuals who build their own copy of the invention? In fact, the patent must enable someone of ordinary skill in the art to practice the invention, so with this obvious patent could you just distribute the patent and a list of suppliers who sell these ordinarily available parts?

As well intentioned as my caller was, I did have to point out to him that any company that had invested in THREE patents was not like to ignore his attempt to undercut their apparently lucrative market and that selling a kit or just the instructions was introducing the likelihood of either inducing or contributing to infringement, both of which would put him in the same situation as his current (assumed) direct infringement.

Inducing and/or contributing to infringement was at the heart of a recent Appeals Court decision (Ricoh v. Quanta). The patents in suit are directed to various aspects of optical disc drive technology – the specific claims describe methods for writing data to CD’s and DVD’s – and the question was whether building the firmware into a system that both wrote AND read the optical media allowed Quanta to slip by the infringement net; after all, they did not actually practice the methods and reading optical media was a noninfringing use. Ricoh argued for both contributory and induced infringement.

Contributing to infringement is, effectively, providing one or more components which, by themselves, are not patented but when combined (by someone else) with other items create an infringing product. A key consideration that determines liability is whether the supplied components are ordinary “article of commerce” with “substantial noninfringing uses”. The core notion, the court pointed out, “is that one who sells a component especially designed for use in a patented invention may be liable as a contributory infringer.” The court found Quanta’s argument (that the READ function of the drives meant the product had substantial noninfringing use) totally unconvincing. By Quanta’s logic, any infringing product could become noninfringing by just adding on features that didn’t infringe.

Inducing infringement is more like a police sting. Although you are not infringing you are providing the means for someone else to infringe and are suggesting or instructing them how to do so. Here too the Court agreed with Ricoh that Quanta had clearly sold its product (to computer manufacturers like HP and Dell) by highlighting the infringing WRITE functions. Had it been just a hidden and presumably unused function the judgment might have gone the other way.

If you were my caller, what option would you take: stop making and selling his product, continue his business and hope the patentee doesn’t notice, or try to get a license?

If the USPTO allowed a patent for a method of swinging on a swing, which they did, then it’s surely time to do something about method patents - or at least methods that I’ve called end-user processes. Patents covering end-user processes are pernicious in several ways:

• firstly, by their nature there is very little documented prior art for a patent examiner to demonstrate obviousness, undermining the doctrine that issued patents have a presumption of validity;
• secondly, they erode the inherent society/inventor balance when their principle use is to secure coverage for an apparatus that has otherwise failed to obtain (or retain) patent protection;
• thirdly, they potentially make every citizen an infringer just for engaging in what is normal or everyday activity; and
• lastly, by raising concerns of induced or contributory infringement in other manufacturers, they contravene the Constitutional underpinnings of our patent law by repressing instead of promoting the “progress of science and the useful arts”.

It is this last issue that concerns me most. One of the characteristics of an end-user process is that it is performed by an individual using no patented/proprietary apparatus. The process is typically not performed by the patent owner or his competitors. And the patent owner never intends to sue the performing individuals. Instead, the patent owner hopes to protect his market for his unpatentable apparatus by scaring off competitors with the threat of an induced or contributory infringement suit.

The recent “KSR ruling”, which makes an obviousness objection harder to overcome (the method of swinging on a swing would not be allowed today), will certainly make it more difficult to obtain these patents but as we know the winds of court opinions can switch over time. It would be better to make explicit changes in the patent laws to eliminate or at least eviscerate these claims.

While some might try to tinker with the definition of a patentable process (e.g., NOT an end-user process), I would rather eliminate the benefit expected from filing these patents. I would make the statutory definition of contributory/induced infringement include, directly or indirectly, a patented apparatus.

With this definition you could teach people the method of swinging on a swing without being lible for inducing infringement. With this definition you could freely sell your non-infringing apparatus without worrying if it also had non-infringing uses.

Importantly, the only possible infringers under this definition are the individuals actually practicing the method. If the goal of the patent owner was to protect a market for an unpatentable apparatus, he will not sue his potential customers. If the goal of the patent owner was to protect the market for the actual method (i.e., a dentist who has developed a new method of implanting teeth wants to be the only dentist able to perform this method), he will sue (or license) the infringers.