Centillion Data Systems v. Qwest Communications: Defining the Term “Use” for Purposes of Infringement Pursuant to 35 U.S.C. § 271 (a)

In an issue of first impression, the U.S. Court of Appeals for the Federal Circuit considered the definition of the term “use” for purposes of infringement pursuant to 35 U.S.C. § 271 (a) where elements of the allegedly infringing service were in the possession of more than one individual. In Centillion Data Systems, LLC v. Qwest Comm’ns Int’l, Inc. et al., 2011 WL ____ (Fed. Cir. Jan. 20, 2011), the Federal Circuit found that there is no requirement that elements of the allegedly infringing service be in the possession of one individual.

BACKGROUND

The patent at issue here, U.S. Patent No. 5,287,270 (‘270 patent), covers a system for collecting, processing, and delivering billing information from a service provider, such as a telephone company, to a customer.  The customer may install Qwest’s software on their personal computers and thereafter request monthly billing, either as an on-demand feature or as subscribed monthly billing.

The United States District Court for the District of Indiana granted summary judgment of non-infringement, and held that Qwest did not “use” the system under 35 U.S.C. § 271(a) because the Plaintiff could not show that Qwest practiced “each and every element of the system claim.”  Rather, the District Court found that Qwest did not control the personal computer processing means, as required by the claimed invention, and that Qwests’ customers did not control the back-end data processing means of the claimed invention.

No Requirement to Exercise Direct Control Over Each Element of the System

The Federal Circuit vacated and remanded on the issue of non-infringement.  The Federal Circuit held that there is no requirement that elements of the allegedly infringing service be in the possession of one individual.  Instead, in order to “use” “a system for purposes of infringement, a party must merely put the invention into service, i.e. control the system as a whole and obtain benefit from it.” 

The Federal Circuit pointed out that the District Court erred in holding that in order to “use” the allegedly infringing system, a “party must exercise physical or direct control over each individual element of the system.”  The Federal Circuit found that Qwests’ customers did infringe by using the “on-demand” feature whereby the customer creates a query that is then relayed to Qwest’s back-end processing.  The Federal Circuit noted that it made no difference that the back-end processing was done by Qwest and not the customer.  As for Qwest itself, the Federal Circuit held that it was not vicariously liable for the actions of its customers. 

CONCLUSION

The Centillion decision broadened the definition of “use” to include those that obtain a benefit from the system and control the system as a whole.  As a result, this definition will have a significant impact on potential infringement in cases where the use is by more than one individual or entity.  Claiming that the potential infringer does not “use” every aspect of the patented device will not insulate the potential infringer from liability or infringement.

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Tom Zuber

Sarah Brooks

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