Following the Federal Circuit’s 2007 decision in BMC Resources and its 2008 decision in Muniauction, joint infringement (aka divided infringement) has become a popular defense for parties accused of infringing method claims.1 Direct infringement of a claimed method requires a party to perform each and every step of the claim. However, when the claim requires the joint acts of more than one party in order to perform all of the steps of the claim, it raises the issue of whether a single party is a direct infringer of the claim. If there is no direct infringer, then there is no liability. This is true even for liability under the doctrine of indirect infringement because indirect infringement, such as inducing or contributory infringement, is predicated upon a finding of direct infringement.
In BMC Resources, Inc. v. Paymentech, L.P., it was undisputed that no single party performed every step of the asserted method claims directed to a PINless debit payment method.2 The asserted claims required the joint actions of debit networks, financial institutions, and the pay-ment service provider, Paymentech. The Federal Circuit noted that, first, infringement requires “a showing that a defendant has practiced each and every element of the claimed invention” and, second, courts have “generally refused to find liability where one party did not control or direct each step of the patented process.”3
While the Court tempered this position by acknowledging that a party cannot avoid infringement by contracting out steps of a patented process to a third party,4 it also conceded that “requiring control or direction” to establish joint infringement liability could result in arms-length agreements that legally avoid infringement.5 Ultimately, the Court held that “Paymentech did not perform or cause to be performed each and every element of the claims”6 because it found insufficient evidence as to whether Paymentech controlled or directed the activity of the debit networks.7
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