McDonnell Boehnen Hulbert & Berghoff LLP
www.mbhb.com
I Didn’t Do (All Of) It: The Joint Infringement Defense
Following the Federal Circuit’s 2007 decision in BMC Resources and its 2008 decision in
Muniauction, joint infringement (aka divided infringement) has become a popular defense for
parties accused of infringing method claims.1 Direct infringement of a claimed method requires a
party to perform each and every step of the claim. However, when the claim requires the joint
acts of more than one party in order to perform all of the steps of the claim, it raises the issue of
whether a single party is a direct infringer of the claim. If there is no direct infringer, then there is
no liability. This is true even for liability under the doctrine of indirect infringement because
indirect infringement, such as inducing or contributory infringement, is predicated upon a finding
of direct inf ringement.
In BMC Resources, Inc. v. Paymentech, L.P., it was undisputed that no single party performed
every step of the asserted method claims directed to a PINless debit payment method.2 The
asserted claims required the joint actions of debit networks, financial institutions, and the pay-
ment service provider, Paymentech. The Federal Circuit noted that, first, infringement requires
“a showing that a defendant has practiced each and every element of the claimed invention”
and, second, courts have “generally refused to find liability where one party did not control or
direct each step of the patented process.”3
While the Court tempered this position by acknowledging that a party cannot avoid infringement
by contracting out steps of a patented process to a third party,4 it also conceded that “requiring
control or direction” to establish joint infringement liability could result in arms-length
agreements that legally avoid infringement.5 Ultimately, the Court held that “Paymentech did not
perform or cause to be performed each and every element of the claims”6 because it found
insufficient evidence as to whether Paymentech controlled or directed the activity of the debit
networks.7
A year later, in Muniauction, Inc. v. Thomson Corp.,8 the Federal Circuit further clarified the
standard for finding joint infringement. There, the Court considered a patent directed to
electronic methods for conducting original issuer auctions of financial instruments.9 As in BMC
Resources, there was no dispute that no single party performed every step of the asserted
method claims.10 While the majority of the steps in the asserted claims were performed by the
auctioneer’s system, at least one step, the inputting step, was completed by the bidder.11 Again,
the Federal Circuit found that the issue of infringement turned on whether Thomson sufficiently
controlled or directed the bidder such that Thomson itself could be said to have performed every
step of the asserted claims.12
The Muniauction district court, relying upon the Federal Circuit’s pre-BMC Resources caselaw,
found that there was a sufficient connection “between defendants, the bidders to whom they
charge a fee for their services, and the issuers for whom they facilitate auctions” to hold
