IF A COMPONENT DOES NOT HAVE A SUBSTANTIAL NON-INFRINGING USE, THEN THE ASSEMBLY DOES NOT EITHER

Ricoh Company, Ltd., v. Quanta Computer Inc., [2007-1567] QUANTA STORAGE, INC., (December 23, 2008) [GAJARSA, LINN, and DYK] The Federal Circuit reversed summary judgment of no contributory or inducement of infringement, but affirmed that the asserted claims of U.S. Patent No. 6,631,109 are invalid for obviousness and that the accused devices do not practice the methods of the asserted claims of U.S. Patent No. 6,172,955.
DISCUSSION: The Federal Circuit said that a process consists of doing something, and therefore has to be carried out or performed. In contrast, software is not itself a sequence of actions, but rather it is a set of instructions that directs hardware to perform a sequence of actions. Because the allegedly infringing sale in this case was the sale of software (i.e., instructions to perform a process rather than the performance of the process itself), the Federal Circuit did not have to decide whether a process may ever be sold so as to give rise to liability under § 271(a). It held that that a party that sells or offers to sell software containing instructions to perform a patented method does not infringe the patent under § 271(a).
Regarding contributory infringement, the Federal Circuit said that It appears to be undisputed that, if there was direct infringement Quanta would be liable under § 271(c) if it imported into or sold within the United States a bare component that had no use other than practicing the methods of the ’552 and ’755 patents. Such a component, specially adapted for use in the patented process and with no substantial noninfringing use, would plainly be “good for nothing else” but infringement of the patented process. The Federal Circuit said that It thus follows that Quanta should not be permitted to escape liability as a contributory infringer merely by embedding that microcontroller in a larger product with some additional, separable feature before importing and selling it. The Federal Circuit said that if it were to hold otherwise, then so long as the resulting product, as a whole, has a substantial non-infringing use based solely on the additional feature, no contributory liability would exist despite the presence of a component that, if sold alone, plainly would incur liability. As further justification for its determination, the Federal Circuit observed that the potential for induced infringement liability in these situations was not a practical substitute for contributory infringement liability, because unlike contributory infringement, induced infringement liability under § 271(b) requires proof that the inducer has an affirmative intent to cause direct infringement.On the issue of inducement, the Federal Circuit noted that liability for active inducement may be found where evidence goes beyond a product’s characteristics or the knowledge that it may be put to infringing uses, and shows statements or actions directed to promoting infringement. The Federal Circuit rejected the district court’s requirement that there be some communication between the inducer and the direct infringer, noting that proving that a message was sent out is the preeminent, but not exclusive, way of showing that active steps were taken with the purpose of bringing about infringing acts. Thus the incorporation of components that only had infringing use was sufficient to create a question of fact about intent to induce infringement.