Chapter §14.02 Direct Versus Indirect Infringement
| Jurisdiction | United States |
§14.02 Direct Versus Indirect Infringement
[A] Introduction
Section 271 of the Patent Act (35 U.S.C.) distinguishes between acts of direct infringement and acts of indirect infringement. Subsection 271(a) governs direct infringement—the unauthorized making, using, selling, offering to sell, or importing of an entire claimed invention.13 Sections 271(b) and (c) govern indirect infringement—activity involving less than a making or performing of the entire invention, such as assisting or inducing another's infringement or supplying certain required components of the invention to a direct infringer—that nevertheless may create infringement liability.
Subsection §271(a) enumerates the various acts of direct infringement in the disjunctive (i.e., using the word "or"). Thus, performing only one of the five acts is sufficient to trigger liability. For example, the act of merely "mak[ing]" a claimed invention without authority creates infringement liability, even if the accused infringer thereafter does not sell or otherwise commercialize the infringing device. Similarly, a mere unauthorized "using" of a claimed invention such as an apparatus creates liability even when the accused infringer did not manufacture the infringing device.14
An unauthorized user may be jointly liable with the party from whom he purchased the apparatus. Consider for example a patent claiming a machine for sowing seeds. Without authority of the patent owner, Accused Infringer 1 manufactures the machine and sells it to Accused Infringer 2, a farmer who (also without authority of the patent owner) uses the machine to plant his crop. Both Accused Infringer 1 and Accused Infringer 2 are considered jointly and severally liable for direct patent infringement.15
[B] Direct Infringement Under §271(a)
Direct infringement occurs when one (or more) of five acts is performed with respect to an entire claimed invention: making, using, selling, offering to sell, or importing it within the United States during the term of the patent. The Patent Act does not define any of these five acts; however, they have been interpreted extensively in the case law. The meaning of each act of §271(a) direct infringement is addressed separately below.
[1] Making
By application of the "all-limitations" rule derived from case law,16 the act of "mak[ing]" the claimed invention under 35 U.S.C. §271(a) requires that an accused infringer has manufactured a device or product that meets each and every limitation of the asserted claim. In other words, the patentee must show that the accused infringer manufactured a component corresponding to every limitation of the asserted patent claim (either literally or equivalently). Moreover, if the claimed invention is a combination of elements, the case law holds generally that the accused device must be fully assembled and ready for use before "mak[ing]" liability arises.17
The meaning of "mak[ing]" was a central focus in the U.S. Supreme Court's 1972 decision in Deepsouth Packing Co. v. Laitram Corp.18 There the Court confronted a case of alleged patent infringement in which the various components of patented shrimp deveining machines19 were sold as separate parts by a U.S. manufacturer to foreign buyers. The buyers then assembled the deveining machines beyond U.S. borders in countries such as Brazil.20 Was this offshore assembly an actionable "mak[ing]" of the patented invention under §271(a)?
The Supreme Court concluded that it was not, interpreting the statutory term "makes" to require final assembly or combination of the "operable whole."21 The Court could not "endorse the view [espoused below by the Court of Appeals for the Fifth Circuit] that the 'substantial manufacture of the constituent parts of [a] machine' constitutes direct infringement when we have so often held that a combination patent protects only against the operable assembly of the whole and not the manufacture of its parts."22 The final assembly of the accused machines—a statutory "mak[ing]"—had not occurred within U.S. borders.23 Thus, the accused infringers were not liable for infringement of the U.S. patent in suit.24
Moreover, the Court refused to apply U.S. patent laws extraterritorially to treat the foreign assembly as if it were an act of infringement in the United States; U.S. patents do not have extraterritorial effect.25 In the Deepsouth Court's view there was no act of direct infringement in the United States. Thus, the component supplier could not be held liable for contributory infringement under 35 U.S.C. §271(c), because an act of direct infringement is a predicate for indirect infringement liability.26
Congress in 1984 amended the Patent Act to plug a perceived loophole created by the Deepsouth decision.27 Today, one who makes and exports all components of a patented device for assembly offshore may infringe under 35 U.S.C. §271(f). This statutory provision is examined elsewhere in this treatise.28
Nevertheless, the core holding of Deepsouth, that a "mak[ing]" to create §271(a) liability requires a final assembly of all components, remains good law.29
[2] Using
[a] Generally
The Supreme Court in Bauer & Cie v. O'Donnell30 considered the meaning of infringing "using" in the course of construing the patent statutes in effect in 1913. Those statutes provided in part that every patent shall contain "a grant to the patentee . . . of the exclusive right to make, use, and vend the invention or discovery."31 The Court explained that "[t]he right to use is a comprehensive term and embraces within its meaning the right to put into service any given invention."32 Thus, the infringing act of "using" under 271(a) generally has been interpreted broadly.33
There are limits, of course. Because the "invention" is what is claimed in a patent, the Federal Circuit holds that "to 'use' an invention, each limitation of the claims must be present in the accused product or process."34
Because the infringing acts set forth in 35 U.S.C. §271(a) are enumerated in the disjunctive, one can be liable for infringement by "us[ing]" a claimed invention without "mak[ing]" or "sell[ing]" it. In its 1984 decision, Roche Prods., Inc. v. Bolar Pharm. Co., Inc.,35 the Federal Circuit deemed it "well-established" that "the use of a patented invention, without either manufacture or sale, is actionable."36 A patentee "does not need to have any evidence of damage or lost sales to bring an infringement action."37
In Roche Prods., no damages or lost sales were alleged—only unauthorized use. The patented invention was the chemical compound flurazepam hcl, the active ingredient in a prescription sleep aid marketed by patentee Roche as "Dalmane." Accused infringer Bolar sought to obtain Food and Drug Administration (FDA) approval to market a generic equivalent of Dalmane. Prior to the expiration of Roche's U.S. Patent No. 3,299,053 ('053 patent), Bolar obtained a quantity of the compound from an offshore manufacturer and used it to create "dosage form capsules, to obtain [the] stability data, dissolution rates, bioequivalency studies, and blood serum studies" that Bolar needed to submit a New Drug Application (NDA) to the FDA.38 Notably, Bolar had not "made" or "sold" the claimed compound (lacking FDA approval to do so); rather, the alleged infringing act was solely Bolar's unauthorized "use[]."
Roche sued for infringement, seeking to enjoin Bolar from continuing to use flurazepam hcl for any purpose whatsoever during the remaining life of the '053 patent. A district court denied Roche's motion for an injunction because "Bolar's use of the patented compound for federally mandated testing was . . . de minimis and experimental."39
The Federal Circuit reversed, concluding that the district court had erred as a matter of law when it held that "the limited use of a patented drug for testing and investigation strictly related to FDA drug approval requirements during the last 6 months of the term of the patent" did not constitute an actionable "use[]" under the patent statute. The appellate court first observed that "Section 271(a) prohibits, on its face, any and all uses of a patented invention."40 The Federal Circuit recognized, however, that the few cases addressing whether a particular use constituted an infringing use "convincingly lead to the conclusion that the word 'use' in section 271(a) has never been taken to its utmost possible scope."41 For example, earlier case law and scholarly authority recognized an "experimental use" defense or exception to infringement.42
Nevertheless, the Federal Circuit in Roche Prods. viewed Bolar's testing for FDA approval as commercial in purpose, not fitting within the "truly narrow"43 confines of the traditional experimental use exception to infringement liability:
Bolar's intended "experimental" use is solely for business reasons and not for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry. Bolar's intended use of flurazepam hcl to derive FDA required test data is thus an infringement of the '053 patent. Bolar may intend to perform "experiments," but unlicensed experiments conducted with a view to the adaption of the patented invention to the experimentor's business is a violation of the rights of the patentee to exclude others from using his patented invention. It is obvious here that it is a misnomer to call the intended use de minimis. It is no trifle in its economic effect on the parties even if the quantity used is small. It is no dilettante affair such as Justice Story envisioned. We cannot construe the experimental use rule so broadly as to allow a violation of the patent laws in the guise of "scientific inquiry," when that inquiry has definite, cognizable, and not insubstantial commercial purposes. 44
Accordingly, the Federal Circuit in Roche Prods. reversed the district court's judgment of non-infringement and remanded the case with instructions to fashion an appropriate remedy.
Congress moved quickly to legislatively...
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