Simplifying Multiactor Patent Infringement Cases Through Proper Application of Common Law Doctrine

• Published date: 01 March 2014
• Date: 01 March 2014
• DOI: http://doi.org/10.1111/ablj.12024
• Author: Lynda J. Oswald

Simplifying Multiactor Patent

Infringement Cases Through

Proper Application of Common

Law Doctrine

Lynda J. Oswald*

INTRODUCTION

There are many reasons why a legislature might create a specialized

appellate court to address the highly technical issues raised by patent law,

including fostering uniformity in outcomes, coherent evolution of doctrine

and policy, and development of judicial expertise and competency.1Con-

gress created the U.S. Court of Appeals for the Federal Circuit (Federal

Circuit) in 1982 with the goal of achieving just these objectives.2Unlike the

other federal appellate courts, whose jurisdiction is defined by geography

and covers a broad spectrum of legal issues, the Federal Circuit has

*Professor of Business Law, Stephen M. Ross School of Business, University of Michigan. This

article was the recipient of the 2013 Holmes-Cardozo Award from the Academy of Legal

Studies in Business. An earlier version of this article was presented at the “The Changing Face

of American Patent Law and its Impact on Business Strategy” Colloquium sponsored by the

Ross School and the Smeal College of Business, Penn State University, in May 2012, and I

thank the Colloquium participants for their comments, insights, and suggestions. © 2014

Lynda J. Oswald

1See S. REP.NO. 97-275, at 4–5 (1981) (discussing the rationale for creating the Federal Circuit

and noting the “special need for nationwide uniformity” and the desire to “increase doctrinal

stability” and “uniformity of doctrinal development” in patent law). See generally Ellen R.

Jordan, Specialized Courts: A Choice?,76N

W.U.L.REV. 745 (1981) (discussing pros and cons

of specialized courts).

2Federal Court Improvements Act of 1982, Pub. L. No. 97-164, 96 Stat. 25 (1982) (codified

as amended in scattered sections of 28 U.S.C.).

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American Business Law Journal

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nationwide jurisdiction over a narrow range of subject matter, including

appeals in patent cases.3

Critics argue that the creation of a specialized court of this nature

poses risks, including overactivism and potential capture of the court by

the patent bar and its constituencies.4Recent trends in patent infringe-

ment case law reveal another, more subtle, but nonetheless important,

hazard arising from the specialized nature of the Federal Circuit. The

court’s specialized jurisdiction can be a positive in the sense of developing

judicial expertise and uniformity of outcomes, but a negative in the sense

that patent law, the unique and complex subject that makes up the largest

category of the court’s caseload,5can take on a form of its own, divorced

from the principles, doctrines, and norms that generally underlie U.S. law.

Recent jurisprudence in the area of multiactor patent infringement

liability suggests that the Federal Circuit is losing sight of the dictates of

traditional common law doctrines in this particular area.6As a result, the

Federal Circuit is making patent infringement liability rules more compli-

cated than they need to be and is causing patent law to become distanced

from traditional legal doctrine in a manner neither contemplated nor

intended by Congress when it enacted the Patent Act.

The Federal Circuit itself has recognized these risks inherent in a

specialized court. Chief Judge Randall Rader, for example, noted in a 2001

speech that while the specialized nature of the Federal Circuit has dra-

matically increased “the pace of common law development” of patent law,

it has also “retarded [its] . . . development in some important ways,”

3See infra note 29 and accompanying text.

4See Craig Allen Nard & John F. Duffy, Rethinking Patent Law’s Uniformity Principle, 101 Nw.

U.L. REV. 1619, 1645 (2007) (“Even before the creation of the Federal Circuit, the patent bar

was a recognized specialty and a somewhat insular community. The creation of a single

specialized court located in one city cannot help but foster an even greater degree of

insularity....”); Rochelle Cooper Dreyfuss, The Federal Circuit: A Case Study in Specialized

Courts, 64 N.Y.U.L. REV. 1, 5 (1989) (arguing that while the Federal Circuit has contributed

to unification of patent law, “significant unanswered procedural questions” prevent the court

from reaching its full potential); William C. Rooklidge & Matthew F. Weil, Judicial Hyperac-

tivity: The Federal Circuit’sDiscomfort with its Appellate Role;15B

ERKELEY TECH. L. J. 725, 729–30

(2000) (arguing that Federal Circuit panels sometimes take on roles assigned to patent

examiners, advocates, and judicial fact finders).

5See infra note 34 and accompanying text (discussing the Federal Circuit’s case load by

category).

6See infra Part III.

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because “there is less percolation, less chance for experimentalism, less

chance . . . for the ‘laboratory of federalism’—various district courts and

circuits, each resolving similar issues in the same way and providing the

Supreme Court with a prism through which to view the law and choose the

best solutions for the future.”7Although Judge Rader was speaking of

the development of the common law of patent, his remarks also resonate

within the relationship of patent law to traditional common law doctrines,

such as tort and agency.8

This article examines joint infringement and its close cousin, divided

infringement, which together form a category of patent infringement

causes of action that I collectively term “multiactor patent infringement.”

Multiactor patent infringement refers to the liability of multiple parties

whose individual actions must be aggregated to form the act necessary to

infringe a multistep process or method patent claim.9The terminology

within this area of patent law is neither clear nor precise. While the term

“multiactor” is not completely new to the patent infringement lexicon,10

courts more typically use the terms “joint infringement” or “divided

infringement,” sometimes in manners that suggest the two terms are

interchangeable.11 However, the two terms are not synonymous, and, in

fact, the failure of the Federal Circuit to explicitly recognize and define the

differences between these two causes of action is one of the factors con-

tributing to the doctrinal disorder in this area of patent infringement

liability. To the extent this article coins a new term, it does so to identify an

overarching umbrella of patent infringement liability under which joint

infringement and divided infringement can be easily recognized as sepa-

rate and distinct bases of liability, supported by separate and distinct

theories and tests. Once these categories are correctly identified and

7Randall R. Rader, The United States Court of Appeals for the Federal Circuit: The Promiseand Perils

of a Court of Limited Jurisdiction,5M

ARQ.INTELL.PROP.L.REV. 1, 4 (2001).

8Commentators, too, have addressed the risk that a specialized appellate court may retard the

development of the common law. See, e.g., Rochelle Cooper Dreyfuss, The Federal Circuit as an

Institution: What Ought We to Expect?,43L

OY. L.A. L. REV. 828, 829 (2010).

9See infra Part I.B (defining multiactor patent infringement).

10See, e.g., Ken Hobday, The Incredibly Ever-Shrinking Theory of Joint Infringement: Multi-Actor

Method Claims,38CAP.U.L.REV. 137 passim (2009) (using the term “multi-actor”).

11See infra notes 329–45 and accompanying text (discussing the courts’ use of “divided” and

“joint” infringement).

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