Tuesday, December 19, 2017

Appellant Tropp prevails at CAFC in Travel Sentry case

The appellant Tropp prevailed, causing a summary judgment decision to be vacated:

Accordingly, we vacate the district court’s entry
of summary judgment of noninfringement in favor of
Travel Sentry and its licensees and remand for further
proceedings. Because Travel Sentry and its licensees are
no longer “prevailing parties” to whom an award of attorney
fees could be made under 35 U.S.C. § 285, we dismiss
their cross-appeal as moot.

Akamai arises:

The primary issue in this appeal relates to attribution:
Is there a genuine dispute of material fact regarding
whether TSA’s performance of the final two steps of the
claims the ’537 and ’728 patents is attributable to Travel
Sentry such that Travel Sentry is responsible for directly
infringing these claims? To properly frame this question,
we first examine the “governing legal framework for
direct infringement” outlined in Akamai V, 797 F.3d at
1023, and then consider how this framework was applied
both to the facts in Akamai V and to those in a more
recent decision from this court: Eli Lilly and Co. v. Teva
Parenteral Medicines, Inc., 845 F.3d 1357 (Fed. Cir. 2017).


We recently applied Akamai V’s “two-prong test” in
Eli Lilly, a Hatch-Waxman suit brought by Eli Lilly
against several defendants seeking to launch a generic
version of Eli Lilly’s chemotherapy drug. 845 F.3d at
1362. The claims in that case comprise three relevant
steps: (1) administering a particular dosage of folic acid
prior to the first administration of the chemotherapy drug
pemetrexed disodium; (2) administering a particular
dosage of vitamin B12 prior to the first administration of
pemetrexed disodium; and (3) administering pemetrexed
disodium. Id. at 1362. Though physicians administered
vitamin B12 and pemetrexed, their patients “selfadminister[ed]
folic acid with guidance from physicians.”
Id. Eli Lilly’s theory of infringement therefore required
establishing that physicians were liable for divided infringement,
as the defendants were accused of inducing
physicians’ direct infringement of the method claims. Id.
Following a bench trial, the district court, applying Akamai
V, concluded that the defendants would induce infringement
of the claims if their generic version of
pemetrexed was launched. Id. at 1363.

We agreed.


Akamai V and Eli Lilly highlight the importance of
correctly identifying the relevant “activity” or “benefit”
that is being conditioned upon the performance of one or
more claim steps. The cases also emphasize that the
context of the claims and conduct in a particular case will
inform whether attribution is proper under Akamai V’s
two-prong test.

The error of the district court:

We find that, under the circumstances presented here,
a reasonable jury could conclude that TSA’s performance
of the final two claim steps is attributable to Travel
Sentry such that Travel Sentry is liable for direct infringement
under § 271(a). Although the partnership-like
relationship between Travel Sentry and TSA differs in
several respects from the service provider-customer and
physician-patient relationships in Akamai V and Eli Lilly,
a common thread connects all three cases: evidence that
a third party hoping to obtain access to certain benefits
can only do so if it performs certain steps identified by the
defendant, and does so under the terms prescribed by the
defendant. The district court, however, did not make this
connection. Instead, it concluded that the “unusual
circumstances of Akamai are not mimicked here.” Travel
Sentry III, 192 F. Supp. 3d at 337.

In reaching this conclusion, the district court erred in
a number of ways.
The district court interpreted Akamai
V too narrowly when it concluded that the decision “did
not disturb” any aspects of our holdings in BMC and
Muniauction. While we did reaffirm the concept of a
single-actor theory of direct infringement, we made clear
that the restrictive view of when the acts of a third party
can be attributable to another evidenced in those cases is
no longer the governing law. In other words, we “broaden[ed]
the circumstances in which others’ acts may be
attributed to an accused infringer to support direct infringement
liability for divided infringement, relaxing
the tighter constrains on such attribution reflected in our
earlier precedents
and in the three previous rulings for
Limelight on direct infringement.” Mankes v. Vivid Seats
Ltd., 822 F.3d 1302, 1305 (Fed. Cir. 2015) (citations

Grokster is referenced:

“[P]rinciples of attribution are to be considered in the
context of the particular facts presented,” Akamai V, 797
F.3d at 1023, and we are satisfied that the context of this
case can justify attributing TSA’s performance of the final
two claim steps to Travel Sentry. Our conclusion finds
additional support in Grokster, a case on which we relied
in formulating Akamai V’s two-prong test. Indeed, immediately
after setting forth this test, we cited to Grokster, a
case concerning indirect infringement in the copyright
context, for the proposition that “an actor ‘infringes vicariously
by profiting from direct infringement’ if that actor
has the right and ability to stop or limit the infringement.”
Akamai V, 797 F.3d at 1023 (citing Grokster, 545
U.S. at 930). Here, Travel Sentry “has the right and
ability to stop or limit” TSA’s ability to practice the final
two claim steps—and thus receive the benefits that follow
from practicing those steps—through a number of means,
including terminating the MOU, discontinuing its practice
of replacing passkeys that are damaged or lost, and
changing the design of future locks such that the keys
previously provided to TSA no longer work.


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