8.2.3.2 Patent Infringement

• Jurisdiction: Arizona

Claims of patent infringement may exist where Internet downloads implicate software and software equipment patents. In 1996, Congress amended the Patent Act to include "offer for sale" as a form of direct patent infringement.^[215] Thus, web-based advertising of a patented product may now give rise to allegations of infringement. In addition, online information that encourages or induces others to commit patent infringement also may trigger liability.^[216]

To date, CGL policyholders have had little success in persuading courts to find coverage for any form of patent infringement, including that based on an offer for sale (with one notable exception in the Northern District of California), and no success under the "infringement of title" coverage.^[217] They have fared significantly better where the predecessor offense of piracy was at issue.^[218]

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Notes:

[215] On January 1, 1996, amendments to the Patent Act went into effect that expanded the definition of infringement. Now an infringer is one who "makes, uses, offers for sale, or sells any patented invention . . . ." 35 U.S.C. Sec. 271(a). Similarly, a contributory infringer is now one who "offers to sell or sells" an infringing item. 35 U.S.C. Sec.271(c); see Everett Assoc. v. Transcon. Ins. Co., 57 F. Supp. 2d 874, 874 (advertising a patented item constitutes an "offer for sale").

[216] As an example, the patent holder of an interactive point-of-purchase computer display system sued CompuServe for patent...