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Archived updates for Monday, July 14, 2008

No "Joint Infringement" Without Proof of Vicarious Liability

In Muniauction, Inc. v. Thomson Corp. (July 14, 2008), the Federal Circuit held that Thomson's control of access to its system and instructinons to bidders on its use was not sufficient
to incur liability for direct infringement by the combined actions of multiple parties for a method claim directed to

an "integrated system on a single server” that allows issuers to run the auction
and bidders to prepare and submit bids using a conventional web browser, without
the use of other separate software. Id. at col.5 ll.13–28. The system of the ’099 patent also allows issuers to monitor the progress of the auction and allows bidders to monitor their bid vis-à-vis the current best bid. Id. at col.12 l.60 to col.13 l.60.
According to the opinion by Circuit Judge Gajarsa, the issue of infringement in this case turned on whether Thomson sufficiently controls or directs other parties (e.g., the bidder) such that
Thomson itself can be said to have performed every step of the asserted claims:
Under BMC v. PaymenTech, the control or direction standard is satisfied in situations where the law would traditionally hold the accused direct infringer vicariously liable for the acts committed by another party that are required to complete performance of a claimed method. 498 F.3d at 1379; accord Int’l Rectifier v. Samsung Elecs. Co., 361 F.3d 1355, 1361 (Fed. Cir. 2004) (reversing district court’s ruling that Samsung violated a permanent injunction prohibiting infringement in the United States on the grounds that Samsung did not control or participate in the extraterritorial
activities of a third party such that the acts of the third party were not attributable to Samsung). In this case, Thomson neither performed every step of the claimed methods nor had another party perform steps on its behalf, and Muniauction has identified no legal theory under which Thomson might be vicariously liable for the actions of the bidders. Therefore, Thomson does not infringe the asserted claims as a matter of law.

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