Risks of Joint Patent Infringement
Us Patent law (35 U.S.C. § 271) states that the following factors are used to determine patent infringement in Court:
- Making, using, selling, or offering to sell a patent invention
- Importing a patented invention in the United States
Additionally, anyone who actively encourages someone else to infringe a patent is also liable as an infringer. Likewise, any person who sells or imports a part specifically designed for use in an infringing product and that has no substantial non-infringing use is liable as a contributory infringer.
To be held responsible for patent infringement, a single entity must offer a product for sale and fully execute all the steps outlined in a patent. If two distinct parties provide different components or perform separate steps of the patented product or patent processes, they cannot be held liable unless one of them oversees or directs the other.
The following case shows how strategic partnerships formed between two parties can hold one or both parties liable for patent infringement and what can be the resulting legal consequences of such agreements.
Golden Hour Data v. emsCharts (Fed. Cir. Aug. 9, 2010)
In Golden Hour Data v. emsCharts, two companies, emsCharts, and Softtech agreed to integrate their separately designed software and market it as a single software package.
emsCharts manufactured a web-based program that charts patient information and integrates billing, while Softtech produced computer-aided flight dispatch software which coordinates flight information. The two programs were enabled to work together and were sold as a unit.
Golden Hour Data, the patentee, alleged joint infringement by emsCharts and Softtech. The Courts concluded that neither party had sufficient control or direction over the entire product, and there was no joint infringement for the method claims. Additionally, the Court stated that emsCharts may have been liable for patent infringement regarding the apparatus claims since emsCharts sold the combined software, however, the patentee did not present this issue to the jury at trial.
For joint infringement, the parties must work together to ensure that the product they are developing is cleared for use in the marketplace to avoid patent infringement. To do this, the partners may need to obtain an opinion of counsel on specific patents and allocate duties to indemnify, defend and hold harmless based on the jointly.
This decision is significant because it demonstrates that collaborative activity is not patent infringement and that undisclosed information need not be prior art to be material.
