Federal Circuit Grants En Banc Rehearing in McKesson to Decide Joint Infringement Standard

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C.

Yesterday, in McKesson Technologies Inc. v. Epic Systems Corp. (No. 2010-1291), the Federal Circuit granted McKesson’s petition for a rehearing en banc regarding the standards for joint infringement of a patent. This order comes just a little over a month after the Court granted a similar petition for a rehearing en banc in Akamai Technologies, Inc. v. Limelight Networks, Inc. (No. 2009-1372), which we discussed in an earlier post.

The Federal Circuit has apparently taken a special interest in the appropriate standards for imposing liability for joint infringement of a patent. Yesterday’s order expands the scope of the previous order and seeks briefing on two new issues:

1. “If separate entities each perform separate steps of a method claim, under what circumstances, if any, would either entity or any third party be liable for inducing infringement or for contributory infringement? See Fromson v. Advance Offset Plate, Inc., 720 F.2d 1565 (Fed. Cir. 1983).”
2. “Does the nature of the relationship between the relevant actors—e.g., service provider/user; doctor/patient—affect the question of direct or indirect infringement liability?”

The first question is almost identical to that posed in Akamai, but it phrases the question in terms of inducing infringement or contributory infringement, whereas the one posed in Akamai was directed to direct infringement. By doing so, the Federal Circuit will be addressing all potential forms of joint infringement of method claims. The second question expands the scope to address the question of the relationship between the parties, which was central to the Akamai panel’s determination that joint infringement requires some form of an agency relationship.

The underlying case

McKesson owns a patent directed to a method of communication between healthcare providers and patients that involves personalized web pages. Epic is a software company that developed a web-based software package that it licenses to healthcare providers to allow patients to view their medical records, scheduling information, and treatment plans.

The parties agreed that no single party performed every step of the allegedly infringed method claim, rather, the patients performed some steps and the medical provider performed others. Nonetheless, McKesson argued that Epic was liable under an induced infringement theory, which requires a direct infringer. McKesson argued that Epic’s customers (the doctors/healthcare providers) controlled or directed their patients to perform the missing steps in the claim, so that Epic directly infringed under a joint infringement theory.

Recognizing that there was no agency relationship between doctors and their patients, McKesson argued that the special nature of the doctor/patient relationship should also be sufficient to support joint infringement. The Court disagreed, finding no agency relationship or other contractual relationship under the standards discussed in Akamai. The Court then affirmed the district court’s grant of summary judgment for Epic.