GW/Harvard conference: Infringement and Defenses

Infringement and Defenses
Moderator: Prof. Michael B. Abramowicz, George Washington
University Law School
William F. Lee, WilmerHale LLP: Literal infringement/each
and every element of the claim—useful for laypeople to think about the claim.
In many jurisdictions (Germany, Netherlands, Japan) around the world, focus is
less specific terms of the claim and more the essence of the invention. Having
seen both regimes, essence approach is more flexible but less predictable—depends
on what adjudicator thinks the essence of the invention is. One thing juries do understand, whether they understand
the claim in its entirety, they understand that each and every thing described
in the claim needs to be there. Useful framework for trial, appellate, and
As we think about things like “should we have all elements
or essence system,” any changes have to be viewed from global, not US property
right, perspective.  eBay: from his
perspective, the biggest effect of eBay has been to move IP litigation outside
the US; Germany, Netherlands, Japan, Korea have become more important b/c
injunctions follow as night does day there, and they are not stayed pending
appeal.  59 Apple/Samsung cases outside
the US w/injunction regimes that were much more patentee-friendly.
Prof. Dmitry Karshtedt, George Washington University Law
School: Interesting tensions in this area. At claim construction stage, judges
may look at essence, even if not always. Biggest concern is symmetry b/t
infringement and defenses. Claims drafted by patentee, but odd to say that SCt
is concerned about claim limitations but in Mayo the Ct was dismissive of the
draftsman’s art.  Exhaustion: look at LG,
court says it doesn’t have to be every element if it’s substantially embodied,
it may exhaust. But that moves away from the primacy of the claim. Tensions
worth noting; some can be explained by construing against the drafter, but the
essence can affect claim construction, and that hasn’t been flagged
Abramowicz: Formalism v. purposivism is an issue across
bodies of law.  Attention to
economic/policy issues. Should this be the same in IP versus outside?  Same in © as in patent?
RT: Fromer has written about peripheral v. core claiming in ©
v. patent: derivative works right differs, and the court may be the first time
you get an interpretation of the meaning v. more substantive examination for
Malcolm L. Stewart, Deputy Solicitor General of the United
States: Techniques of statutory construction. 
Tax code has industry-specific provisions, parsing fine details/drawing
inferences from use of term in different provisions. You can’t do that
w/infringement provisions b/c they’re not written at that level of detail,
intended to cover all the industries that might be covered by patent and ©. But
the concepts of infringement have been around for 100s of years, differing from
modern regulatory statutes; there’s a wealth of material about patent & ©
infringement as traditionally understood. What drives courts is unavailability
of one method of statutory construction, plus historical rich background, e.g.
on inducement.
Abramowicz: Karshtedt has argued for more flexible liability
for person A for person B’s acts.
Karshtedt: tort & criminal law concepts of aiding and
abetting. One intuition is: if you commit a crime/tort w/physical instrument,
we treat it as direct liability not inducement or secondary liability. Sometimes
another human being can be such an instrument—a completely passive human user
who doesn’t know about the tech and who is just executing steps in a method
claim. That’s direct and not indirect liability; the real responsibility lies
w/the manufacturer. Inducement was really encouraging/giving someone a weapon
where the other person was central in committing the crime.  The differences in the facts inform these
questions.  The courts have been very
formal in direct/indirect boxes; the line is not so sharp.  See this in Aereo too, where the issue is
direct/indirect. See that in patent too; don’t have to be physically carrying
out the act, and use in patent doesn’t have to be physical use—just take
advantage of.
Lee: We’ve had a number of cases w/attempts to apply traditional
causation concepts to 300-year-old patent concepts; people struggle
w/proximate, but-for causation.  If we
changed, what would the standard be? How would that change the evidence that
fact finders hear?  If it was cause in
fact v. inducement—the evidence might not change a bunch; would it have much
effect? Not clear.  Another point:
300-year-old principles, the history has been that they exist and modified,
amended, over time but there in some form. The process has always been that development
a new tech, or convergence of tech, are seen in light of old principles. As you
think about changes, it’s a system that’s there to accommodate unimagined tech,
and thus must be flexible.
Prof. Rebecca Tushnet, Georgetown University Law Center: Formalism
as transaction and error-cost lowering: Type I and Type II errors, but lower
systemic costs.  Lack of formalism doesn’t
work very well in TM—Google as potentially directly liable for KW advertising
carried out by advertisers.  But Google
won all those cases at the end, as it should; the direct liability mirage just
was very very costly for the system.
Infringement in context, not just global but remedies:
statutory damages. That affects direct/indirect liability too b/c of lack of
any knowledge/intent if we call an ISP directly liable it’s quickly in
Designated skeptic about private law as a distinctive set of
tools.  [Whether you engaged in a public
performance is not so much a matter of good faith in the ordinary sense.  Consider regulatory analogies instead of
private law analogies: Tax evasion/tax avoidance distinction that arguably
mapped better onto Aereo than other analogies. Evasion is a wrong; avoidance is
not.  Likewise, creating a nonprofit
archive or museum in order to take advantage of the various limitations
copyright law provides for such archives: that’s not wrongful if you really
create a nonprofit. Nor is structuring a business around fair use. Interesting
to talk about corporate law analogy: the whole point of the corporate structure
is to cut off individual liability, which is why people were really dubious
about that enterprise at its historical beginning, but if you do it correctly
we make it almost impossible to pierce the corporate veil.]

Stewart: Aereo: We know from precedent that a cable system was supposed to be
covered by public performance, but not a seller of rooftop antennas.  Wanted to know which this was more like.  People had different answers; we had our
brief about our reasons, but it came down to gut instinct.  We filed the brief we did b/c gov’t
decisionmakers felt it was more like cable, and the Court majority agreed.
There was no complex statutory language you could turn to in order to make the
choice b/t competing paradigms.  Not fascinating
as a legal puzzle, but as factual one.
The dissenters in Aereo:
this might be prohibited by some other aspect of the © law, and if not probably
should be, but if they found a loophole so be it, that’s for Congress to
fix.  Court majority’s reaction: it sure
looked like a public performance in every respect.  This wasn’t a loophole but in fact the very
thing Congress sought to cover.
Abramowicz: we didn’t see patent analogies. To what extent should
areas of IP look at one another?  To what
extent should IP look to contract law, tort law?  Is there a special relationship b/t © and
patent?  Or is the first step to think
about contract and tort b/c all new problems are old.
Stewart: depends on the type of problem you’re dealing
with.  Inducement liability: if Congress
had codified it differently, that’d be good evidence of a difference, but
without that borrowing seems plausible.
Lee: Where the statutes differ on their face, that’s easy;
where they share language, that’s easy; the harder ones are specific provisions
that might, if stretched, have some analogous meaning—harder to do and more
Abramowicz: Akamai: no inducement w/o primary
Karshtedt: There are other ways to infringe besides
physically doing things. Mental state isn’t even mentioned in inducement,
though it’s correctly read in due to background common law.  Just b/c patent act doesn’t mention
respondeat superior doesn’t mean that respondeat superior doesn’t apply, etc.
Inducement can mean many different things—e.g., aiding and abetting.  We should impose higher mental states for
making food for an infringer/providing a platform that can be used for an
infringer v. making a device that can only be used to perform steps of a method
claim.  Akamai was unanimous, unusually,
in Fed. Cir. even though vicarious liability may not be the best fit. Take
common sense intuitions about holding Akamai liable b/c it’s providing a
service that can only be used to infringe. 
RT: you get some weird results that are path-dependent: TM
and © vicarious liability differ, but why?
Stewart: Grokster
considered two historical analogies: seller of equipment useful for almost nothing
but infringement, and that = liability; or product suitable for both uses, but
manufacturer specifically encouraged use for infringement, and that = liability.
The Court really paid no attention to the fact that concepts of secondary
liability have been codified in Patent Act as provision covering components
specifically made for use in patented invention and as provision covering active
inducement—striking that there was no attempt to get lessons from that.
Another thing—Court has a very strong recognition of the
fact that a lot of tech can be used in infringing or noninfringing ways; in
many instances vendor can confidently predict infringing and lawful use. Court
leery of infringement liability in those circumstances.
RT: responses of litigants: Scale/ inability to control
design through traditional law (e.g., creator of Bittorrent, which nobody
thinks is liable for inducement, but nonetheless enables a lot of infringement);
related move to admin/new forms of lawmaking/non-law making w/ICANN, copyright
strike system, etc.; other attempts to police design or behavior on platforms;
moves in Europe where they don’t care about the common law.  Consider hydraulic effects of making rules in
common law reasoning manner.
Lee: inducement claims in patent have proliferated v. 15
years ago.  Why?  Claims litigated today were drafted 15 years
ago; struggling to address new inventions. 
But also particularly in the US, litigating an inducement claim, even
w/additional burden of showing some level of culpability, is simpler and
potentially more lucrative, b/c you’re going after one defendant but the acts
of direct infringement are those of other parties w/a larger revenue base than
the actor you focus on.
Jonathan Band: Scalia’s Aereo
dissent spent a lot of time criticizing the majority for not identifying a
volitional actor—the individual or Aereo. 
Majority was very cagey; assumed that Aereo was a volitional actor but
didn’t use the word. That’s led some litigants to say that Aereo got rid of the volition requirement.  Perfect
said volition still exists.  Why was
the SCt so averse to using the word, and is it significant?
Stewart: Can’t remember ever hearing volitional as a magic
word that would help you to determine whether a particular entity was subject
to infringement liability. We didn’t frame the issue that way, but not from
conscious shying away; that just wasn’t the most natural way of describing what
was going on.  In the context of a cable
operator, there are two volitional actors: the cable operator itself making
certain choices about how machinery will work and what channels will be
available, and then to get a program transmitted the person in the house has to
adjust the channel; both are volitional. The initial determination about lack
of liability for cable/Congressional override—not naturally explained as a
disagreement about volition, but rather as what kind of volition counts. Same
is true in Aereo: both are making
volitional choices.  Dispute b/t majority
and dissent was whether Aereo did enough to make it the public performer.
RT: my realist answer is Dropbox.  If you don’t say volition, you don’t have to
explain why Dropbox isn’t exactly the same as Aereo.
Karshtedt: Sleepwalking as question of volition, or being
dropped off drunk in a public square and then getting arrested for public
intoxication; to say that Aereo didn’t engage in volitional conduct is weird.
The question is whether your conduct is sufficient for direct or indirect
liability and that’s a judgment call. It’s volitional to make a product, but is
that enough? 
Lee: if you’re a patent owner today, filing in Germany will
get you a decision in 9 months; filing in Germany, Netherlands, and ITC is the
strategically optimal choice. It’s a commercial question b/c these tend to be
big markets; you have to enforce your rights in each market.
Many companies move all their products through the
Netherlands for tax reasons; that is what makes the Netherlands a key jurisdiction.  German courts think they’ve done a good thing
by attracting IP litigation.  In China,
now seeing a switch in enforcement as well.
Q: is state of mind evidence for inducement available? [May
differ as between © and patent, given DMCA for © and lack of registration
Lee: clearly a heightened standard, useful at JMOL and on
appeal; courts looking at jury verdict are thus more willing to look at the
Q: does claiming actually provide more certainty or just
supposed certainty?  The original idea of
peripheral claiming would be requiring all elements + that the accused
device/etc. do what the invention does; Fed. Cir. has abandoned the second part
as the disfavored reverse doctrine of equivalents. Would that be better?
Lee: compared to other jurisdictions, our juries and judges,
even at the Fed. Cir., are just bright people hearing about the claims. They
get inventions in two ways: claims in literalistic fashion where judge tells
them what the claims mean, but they also always get the narrative of how the invention
was made, the problem to be solved, how the inventor did it, as well as the
narrative of how the infringing product was developed. Element by element
infringement analysis is more predictable/precise than other systems, but it’s
important to remember that juries/judges get all that in a narrative context
communicating much of the essence of the invention as well.
Karshtedt: so is Germany central claiming?
Lee: (1) yes; (2) litigating to a court appointed expert selected
by the judge; (3) most important thing about Germany is that it’s a little bit
East Texas/Delaware—on the margin, it’s better to be the patentee than not.
Q: Avoidance/evasion for patent inducement: can there be
inducement when you believe you’re engaging in legal conduct b/c the patent is
invalid?  Opportunism goes to intent. But
intent to do what?
Stewart: another area in which language of the statute didn’t
solve the problem. Court could have drawn the line in various places.  Could mean “actively/deliberately brings
about conduct that turns out to be infringing” v. “intended to infringe/knew
about the patent.”  Court rejected the
former.  We unsuccessfully advocated to
draw the line b/t knowledge of the patent v. knowledge of infringement; Court
requires knowledge that the conduct itself was infringing.  Dissent’s argument: if you go this far, you
should require knowledge that what you’re inducing is illegal, and if you think
the patent is invalid you don’t know it’s illegal. Court thought that tilted
too far b/c illicit intent is too difficult to prove; court also referenced
general principal that ignorance of the law is no defense.
Karshtedt: Some problems in PSM debate may have come from Fed.
Cir.’s narrowing of experimental use defense. 
Still, damages would be pretty low in such cases; nonetheless it
increases pressure to invalidate research based patents.  Maybe revisit that.

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