Chapter §17.03 Contributory Infringement Under §271(c)

• Jurisdiction: United States

§17.03 Contributory Infringement Under §271(c)

The doctrine of contributory patent infringement, statutorily codified at 35 U.S.C. §271(c) in the 1952 Patent Act, has its origins in nineteenth century judicial decisions such as Wallace v. Holmes.²⁸⁷ Under a theory of joint tortfeasance, the Wallace court held liable for infringement the defendant supplier of an unpatented burner for an oil lamp. When consumers combined the burner with a chimney, they directly infringed the plaintiff's patent on the combination lamp device comprising burner and chimney.²⁸⁸ The burner was intended for use in the claimed combination invention. Thus, the defendant burner supplier was contributorily liable for the direct infringement by its customers.²⁸⁹

The Federal Circuit has explained that the inclusion of §271(c) in the 1952 Patent Act was intended to codify pre-existing, long-standing common law:

The doctrine of contributory infringement long predated the enactment of [35 U.S.C.] §271(c). See, e.g., Wallace v. Holmes, 29 F.Cas. 74, 80 (No. 17,100) (C.C.D.Conn.1871) (holding that the sale of an unpatented burner component intended for use in a patented lamp combination contributorily infringed); see also Aro Mfg. Co., Inc. v. Convertible Top Replacement Co., Inc., 377 U.S. 476, 485–88 & n. 6, 84 S.Ct. 1526, 12 L.Ed.2d 457 (1963). Enacted as part of the Patent Act of 1952, §271(c) was designed to codify the contributory infringement doctrine "that previously had been developed by the judiciary." Dawson Chem. Co. v. Rohm & Haas Co., 448 U.S. 176, 179, 100 S.Ct. 2601, 65 L.Ed.2d 696 (1980). ²⁹⁰

In 2011, the Supreme Court similarly observed that it had

recognized in Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476, 84 S.Ct. 1526, 12 L.Ed.2d 457 (1964) ( Aro II), [that] "[t]he section [35 U.S.C. §271(c)] was designed to 'codify in statutory form principles of contributory infringement' which had been 'part of our law for about 80 years.' " Id., at 485–486, n. 6, 84 S.Ct. 1526 (quoting H.R.Rep. No. 1923, 82d Cong., 2d Sess., 9 (1952)). ²⁹¹

Although today's Patent Act separately contemplates the two forms of indirect patent infringement liability—inducing infringement under §271(b) and contributory infringement under §271(c)—the inducing and contributory theories were historically viewed as two subtypes of a broader "aiding and abetting" notion of what was then referred to as "contributory" infringement.²⁹²

[A] Acts

Section 271(c) of the Patent Act governs contributory infringement, which involves one entity (the contributory infringer) supplying a "nonstaple" component of a claimed invention to another entity (the direct infringer), who makes, uses, or sells the entire invention. As discussed infra, the act of supplying the nonstaple component must be performed with the requisite intent.²⁹³

A nonstaple component is a component or part of an invention that is not suitable for any substantial use other than in the patented invention.²⁹⁴ Determining that a supplied component is a nonstaple allows courts to "identify instances in which it may be presumed from distribution of an article in commerce that the distributor intended the article to be used to infringe another's patent, and so may justly be held liable for that infringement."²⁹⁵ Where an article is " 'good for nothing else' but infringement, there is no legitimate public interest in its unlicensed availability, and there is no injustice in presuming or imputing an intent to infringe."²⁹⁶

Contributory infringement cases typically involve the supply of a nonstaple component or a nonstaple material or apparatus to be used by another who performs the complete patented invention without authority. Examples of both types of acts of contributory infringement are provided below.

[1] Supply Component

In Ricoh Co., Ltd. v. Quanta Computer Inc.,²⁹⁷ the Federal Circuit vacated a district court's grant of summary judgment of no contributory infringement. Ricoh's patents in suit concerned optical disc drive technology. More specifically, Ricoh's U.S. Patent No. 5,063,552 ('552 patent) was directed to an apparatus and method for controlling the velocity at which a disc drive spun an optical disc,²⁹⁸ while Ricoh's U.S. Patent No. 6,661,755 ('755 patent) concerned methods of writing data to optical discs in multiple sessions.²⁹⁹ Accused infringer Quanta was an original equipment manufacturer (OEM) that manufactured notebook computers and optical disc drives for sale by other companies, including NU Technologies ("NU"). NU in turn sold the products to U.S. consumers. The consumer purchasers used the optical disc drives to record, erase, or overwrite data on discs.

Ricoh alleged that Quanta and NU contributorily infringed the '552 and '755 patents by supplying optical disc drives containing certain hardware or software components that were specifically adapted to perform the patented recording methods. A district court granted summary judgment that neither Quanta nor NU contributorily infringed under §271(c) because all of the devices sold had substantial noninfringing uses; i.e., the disc drives could be used to read discs in a manner that did not infringe Ricoh's patented recording methods. The district court so held even though the evidence at the summary judgment stage indicated that "Quanta's disc drives contain[ed] at least some distinct and separate components used only to perform the allegedly infringing write methods."³⁰⁰

A majority of the Federal Circuit panel in Ricoh reversed on this issue of first impression—whether "the inclusion of a component with substantial noninfringing uses in a product that contain[ed] other components useful only to infringe a process patent can or should defeat liability for contributory infringement under §271(c)."³⁰¹ Answering in the negative, the majority reasoned:

It appears to be undisputed that, assuming direct infringement is found, Quanta would be liable under §271(c) if it imported into or sold within the United States a bare component (say, a microcontroller containing routines to execute the patented methods) that had no use other than practicing the methods of the '552 and '755 patents. Such a component, specially adapted for use in the patented process and with no substantial noninfringing use, would plainly be "good for nothing else" but infringement of the patented process. Grokster [Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005)], 545 U.S. at 932, 125 S.Ct. 2764 (internal quotation marks omitted).

It thus follows that Quanta should not be permitted to escape liability as a contributory infringer merely by embedding that microcontroller in a larger product with some additional, separable feature before importing and selling it. If we were to hold otherwise, then so long as the resulting product, as a whole, has a substantial non-infringing use based solely on the additional feature, no contributory liability would exist despite the presence of a component that, if sold alone, plainly would incur liability. Under such a rule, evasion of the protection intended by Congress in enacting §271(c) would become rather easy. A competitor who wished to sell hardware that would enable infringement of a patented process could do so without incurring liability for contributory infringement by selling a device that simply embedded the hardware for practicing the patented process within other hardware that also performs another process, or by combining the enabling hardware with other hardware before importing it. Moreover, only the first person in the supply chain (in the example above, the manufacturer who sells the microcontroller) could be liable for contributory infringement. The person who bought that infringing component and assembled it into something else would face no liability for contributory infringement, even if that component were good for nothing but infringement. And most importantly, no §271(c) liability could ever be found where an infringing component is both manufactured and assembled into something else by the same person. In many of these situations, the only remedy would be against end users of the product for direct infringement. This result would be contrary to what the Supreme Court recognized in Grokster as a fundamental purpose of contributory infringement liability: because "it may be impossible to enforce rights in the protected work effectively against all direct infringers, the only practical alternative [is] to go against the distributor of the copying device for secondary liability." Grokster, 545 U.S. at 929–30, 125 S.Ct. 2764. ³⁰²

In sum, the Federal Circuit majority in Ricoh held that as a matter of law, a supplier cannot escape contributory infringement liability by merely embedding or including in its product a component that has no substantial noninfringing use along with some additional, separable components that do have substantial noninfringing uses.³⁰³ Accordingly, the majority remanded to the district court for further proceedings on the material fact issue whether Quanta's optical disc drives contained hardware or software components that had no substantial noninfringing use, "in which case contributory infringement may appropriately be found."³⁰⁴

[2] Supply Material or Apparatus

Contributory infringement also encompasses the supply of nonstaple "material or apparatus" to a direct infringer who performs a method claim.³⁰⁵ A classic example of supplying a starting material that led to accusations of contributory infringement is Dawson Chemical Co. v. Rohm & Haas Co.³⁰⁶ The accused contributory infringer in Dawson supplied an herbicide, propanil, to farmers. By using the propanil to control weeds in their rice crops in accordance with the process claimed in the patent in suit, the farmers became liable as direct infringers (presumably for "using" the patented process without authorization). While not covered by a patent, the herbicide propanil was a qualifying...