Review of Developments in Intellectual Property Law
Fall 2010 Volume 8, Issue 4
Inside this issue:
1
Patent Misuse After
Princo Corp. v.
Int’l Trade Commission
1
I Didn’t Do (All Of) It: The
Joint Infringement Defense
10
Accelerated Patent
Examination:
What Every Business Owner
Needs to Know
13
New (Limited) Duty of
Candor in the EPO (Amended
European Rule 141)
15
MBHB is...
continued on p. 5
continued on p. 2
Patent Misuse After
Princo Corp. v. Int’l Trade
Commission
I Didn’t Do (All Of) It:
The Joint Infringement Defense
On August 30, 2010, the Court of Appeals for
the Federal Circuit issued an en banc decision
in Princo Corporation v. International Trade
Commission affirming the International Trade
Commission’s (“ITC”) ruling that the U.S. Philips
Corporation (“Philips”) was not precluded by pat-
ent misuse from asserting its patents against
Princo Corporation (“Princo”).1 The decision
effectively limits the scope of the patent misuse
doctrine and may have implications in the licensing
efforts of joint ventures.
Background
Philips and the Sony Corporation (“Sony”) worked
together to develop standards for the technology
associated with recordable compact discs (“CD-
Rs”) and rewritable compact discs (“CD-RWs”).
Those standards were collected in a publication
entitled “Recordable CD Standard,” which is more
commonly known as the “Orange Book.”
During the development process, both Philips and
Sony found different solutions to the problem of
encoding position information on the disc.2 Phil-
ips’ solution was described in the Raaymakers
patents, two of the patents at issue in this case.
Sony’s approach was set forth in the Lagadec
patent, which was not asserted against Princo.
For purposes of the Orange Book standard,
Philips and Sony agreed to adopt the approach
described in the Raaymakers patents. Philips and
Sony engineers found that approach to be “‘simple
and … work[] very well.’” In contrast, the solution
described in the Lagadec patent was thought to
Following the Federal Circuit’s 2007 decision
in BMC Resources and its 2008 decision in
Muniauction, joint infringement (aka divided in-
fringement) 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 infringement.
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 ac-
knowledging that a party cannot avoid infringe-
ment by contracting out steps of a patented
