Author:Rajec, Sarah R. Wasserman

TABLE OF CONTENTS I. INTRODUCTION 118 II. PATENTS AND THEIR BOUNDARIES 125 A. The Patent Balance 126 B. Patent Boundaries: Patent Grants, Scope Determinations, and Enforcement 128 1. Staking Claim to Inventions--How Boundaries Constrain the Patent Grant and Scope Determinations 130 2. Direct Infringement and Clear Boundaries: The All Elements Rule 137 III. INFRINGEMENT OUT OF BOUNDS 141 A. Strict Enforcement Boundaries and their Drawbacks 142 B. Loosening Enforcement Boundaries 146 1. The Rise of Indirect Infringement 146 a. Contributory Infringement 147 b. Induced Infringement 152 2. Cross-Border Infringement 155 a. Infringement by Export Under Section 271(f) 156 b. Infringement by Import 158 IV. EVALUATING INFRINGEMENT, UNBOUND 160 A. Evaluating Unbound Infringement Liability 161 B. Evaluating Limiting Principles 164 V. CONCLUSION 167 I. INTRODUCTION

Patents are intended to strike a delicate balance--to encourage innovation by rewarding past invention without unduly hindering future progress. (1) In order to achieve this balance, patent rights are bounded by limitations on subject matter, term, and scope. Like fence posts, scholars tell us, these limits serve as important signals--to both the patent owner (staking her claim) and to "neighbors" (who can create without infringing, using the fence posts as a guide). (2) But what happens if these carefully-drawn boundaries are later loosened by enforcement rules in unpredictable ways? At first glance, that appears to be what is happening in recent years. In response to sophisticated technology and a global cross-border marketplace, patent enforcement doctrines are changing. For example, courts and lawmakers sometimes relax application of the requirement that all elements of a claim must be met in the United States when the infringer is engaged in a cross-border act. And manufacturers and retailers may be held liable for the infringement of their customers as "indirect" infringers.

It is tempting, perhaps, to view these modern boundary-loosening enforcement rules as a risk to the delicate balance patent law seeks to maintain. This article argues, however, that the unbound infringement rules should be viewed not as a challenge to the balance but as a complement to it. Viewing the enforcement doctrines in this way--as a companion to the boundaries governing patent scope--reveals new insights on the would-be limiting principles that apply to unbound infringement. I argue that some of the patent infringement doctrines that allow for expanded liability beyond the normal bounds of patent enforcement are overbroad while others are overly strict. The key to reform, however, is that--like our understanding of the fence posts around the scope of the patent itself--patent enforcement rules must be moored to the same fundamental purposes that motivate the delicate balance patent law seeks in the first place.

Patent law balances interests through the use of numerous boundaries--in time, subject matter, scope, and eventually, enforcement. A patent grants the right to exclude others from making, using, offering for sale, selling, or importing a patented invention during the patent term. By excluding others from the market, patent owners can charge higher prices, motivating inventors to create and investors to invest in new technologies. (3) This system also provides benefits to society by adding to the storehouse of knowledge, encouraging sales of new inventions, spurring others to innovate in order to compete, and, when the patent term ends, making the technology available to all. (4) However, patents come with some costs too, such as reduced access due to higher consumer prices and higher costs for future innovators who must license the patented technology or research its limits and employ other technologies to avoid using it. (5)

The boundaries of patent rights are designed to balance these conflicting goals. Scholars have likened patent claims to fence posts, showing the boundaries of the intellectual "property" to which an inventor stakes a claim and which others must avoid. (6) Boundaries that constrain the reach of patent rights--temporally, by subject matter, and by scope--are understood as a means of balancing the costs and benefits associated with patents. Doctrines that limit patent rights to the invention--as disclosed in the patent itself--ensure that third parties have notice of what the patent prohibits and what it allows. (7) This is particularly important in patent law, where the public interest favors third parties engaging with all technology not prohibited by the patent and where uncertainty in those boundaries may chill desirable innovative activities. (8)

All of these boundaries on the scope of patent rights are subject to loosening in some circumstances, generally when it appears that a strict interpretation of the boundaries would undermine the purpose of the patent grant. (9) So, for example, the term of a patent may be extended by law if the patent holder was subject to regulatory delays. (10) The reasoning behind this loosening of the patent term boundary is that agency delays unfairly limit a patent holder's exclusive rights to the U.S. market and diminish the reward to which she is entitled. However, the potential extension is limited to a maximum of five years. (11) This represents the importance of the other side of the patent balance--the value of having ideas enter the public domain and the cost to consumers and other innovators of tying up technology. Importantly, all of the boundary-loosening doctrines have limits that reflect the importance of notice and the value of a robust public domain. (12)

Like the bounded scope of patent protection, infringement liability is constrained by boundaries that further these same patent law purposes of encouraging invention without chilling third-party behavior. Infringement determinations naturally focus on the acts or products of an accused infringer more than the boundaries of the patent; however, these are two sides of the same coin because the patent boundaries determine what competing product features constitute infringement. (13) The basic inquiry in an infringement determination requires analysis of whether every element of a patent claim is present in the accused product or every step of an accused process has been performed. (14) There are other, subsidiary requirements, however. Thus, all steps in an accused process must be performed by or attributable to a single entity. And, those steps must all be carried out within the United States. These requirements are also examples of bounding patents. However, they are enforcement boundaries rather than rights boundaries. These requirements, like rights boundaries, serve the purpose of giving notice to third parties, constraining patent enforcement so that it does not reach acts that fall in the public domain or outside the scope of United States patent rights and ultimately limiting the scope of the exclusive right that has been granted.

Just as patent scope boundaries may be loosened, lawmakers and courts occasionally seek to loosen enforcement boundaries when strict applications lead to underenforcement (15) for patent holders. For example, boundaries on patent claim scope are subject to loosening in enforcement proceedings through the doctrine of equivalents. (16) This doctrine allows a patent holder to apply her exclusive right to things not explicitly claimed in the patent when the differences are insubstantial and would have been appreciated by one skilled in the art. (17) The doctrine is a holdover from when patents were written differently and has been criticized because of the notice costs and uncertainty it imposes on third parties. (18)

Laws and doctrines that allow for indirect infringement liability and liability for cross-border acts are other examples of patent enforcement boundary loosening--and they are becoming more common. (19) In indirect infringement cases, a defendant may not have performed all the claimed steps of a patent but may have induced its customers to do so or otherwise contributed to customers' later, direct infringement. (20) In these cases, the defendant did not combine all the claim elements or perform every step, and courts must decide whether enforcement boundaries can be stretched to encompass the acts of customers and attribute liability to manufacturers and sellers. Cross-border patent infringement cases must address whether acts that occur abroad can be "counted" for purposes of finding infringement of a U.S. patent, essentially loosening the geographical borders that normally constrain enforcement of U.S. patent rights. (21) In addition, provisions of the Patent Act allow for infringement liability when substantial components of a good are manufactured within the United States and exported for assembly. (22) The importation of goods manufactured through patented processes abroad is also labeled as infringement. (23)

These provisions that loosen patent enforcement boundaries have become more important in the past twenty years, and a number of difficult patent enforcement questions have caught the attention of the Supreme Court and the Court of Appeals for the Federal Circuit ("Federal Circuit"). (24) The Court's growing interest in these cases reflects the increasingly international production of goods (25) and has also coincided with the rise of digital technology and its difficult-to-detect distribution facilitated by the internet. (26) These changes to the manufacture and distribution of goods have in turn changed the structure of businesses in tangible and intangible products, with the advent of 3D printing raising the possibility of decentralizing the production and distribution of tangible goods even further. (27) As a result, the production and distribution of patented goods is a global and cross-border enterprise, making it complicated to apply territorial boundaries to patent rights...

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