Aristocrat Techs. Inc. v. Int'l Game Tech., 2010-1426 (Fed. Cir. March 13, 2013)

Once again, the Federal Circuit has relied on its en banc decision in Akamai Technologies, Inc. v. Limelight Networks, Inc., 692 F.3d 1301 (Fed. Cir. August 31, 2012) to vacate and remand a district court's summary judgment of no induced infringement in a case where there is no direct infringer. This time, the question of induced infringement arises in the context of patents directed towards gaming machines, such as slot machines, and claimed methods for awarding a progressive jackpot. See Aristocrat Techs. Inc. v. Int'l Game Tech., 2010-1426 (Fed. Cir. March 13, 2013).

Aristocrat asserted two patents against IGT, a competing manufacturer of slot machines, alleging direct and indirect infringement of each patent. The district court found that the claims of both patents included at least one method step that was never performed by IGT. For example, Claim 1 of Aristocrat's asserted '215 patent included the term "awarding said one progressive prize," which the district court construed to mean "conferring rights to a prize." Both of Aristocrat's patents also included the claim term "making a wager at a particular gaming machine," which the district court construed to mean "betting, which is an act performed by the player." It was undisputed that IGT performed neither the "awarding" step nor the "making a wager" step.

After finding that IGT did not perform all steps of the claimed methods, the district court considered the question of whether IGT directed or controlled the actions of the slot machine owners or players such that IGT could be held liable for direct infringement. Applying the standard set forth in Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008), the district court found that IGT did not direct or control the actions of either the slot machine owners or players. Therefore, the district court granted summary judgment of no direct infringement.

Finally, the district court found that because no party was liable for direct infringement, there could be no liability for induced infringement under BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007).

The Federal Circuit affirmed the district court's claim construction of the "awarding" and "making a wager" claim terms. The Court also agreed with the district court that IGT did not perform either of those two steps, and was, therefore, not liable as a direct infringer.

Regarding induced infringement, the Federal Circuit noted that it had issued its en banc decision in Akamai while Aristocrat's appeal was pending. Under Akamai, a party may be liable for induced infringement as long as every step of the claimed method is infringed, even if all the steps are not performed by the same entity. Because the Akamai decision materially changed the law of induced infringement, the Federal Circuit vacated the district court's grant of summary judgment of no induced infringement, and remanded for further proceedings on that issue. Although the Court ostensibly did not express an opinion on the ultimate merits of Aristocrat's induced infringement claim, it observed that "the adduced evidence could support a judgment in its favor on a theory of induced infringement."

The Aristocrat decision is the third time the Federal Circuit has vacated and remanded a summary judgment of no indirect infringement since the Akamai decision, demonstrating that the standard for proving indirect infringement has changed significantly. In each case, the district court relied on BMC in holding that there could be no indirect infringement because no single entity performed every step of the claimed method. The earlier cases arose in the context of methods for locating available real estate properties using a zoom-enabled map on a computer, Move, Inc. v. Real Estate Alliance Ltd., 2012-1342 (Fed. Cir. March 4, 2013), and methods of airline luggage screening using a dual-access lock, Travel Sentry, Inc. v. Tropp, 2011-1023 (Fed. Cir. Nov. 5, 2012).

The Aristocrat decision is available here

The Court's en banc Akamai decision is available here