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December 19, 2005

Used Where?

RIM continues to grasp at straws to avoid paying NTP for patent infringement. Late last week RIM again appealed to the Supreme Court to save its bacon.

The decried issue is whether a Blackberry user is using her Blackberry in the United States if her wireless email relays through Canada. The applicable statute is 35 U.S.C. § 271(a).

35 U.S.C. § 271 Infringement of patent. (a) Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States, or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.

From RIM's Supreme Court plea -

To the vast majority of subscribers, BlackBerry handheld devices are the only visible part of the system.

This constitutes an obvious, even tautological, admission by RIM that as far as a Blackberry user in the United States is concerned, the user is using her Blackberry in the United States.

In its revised opinion on August 2, 2005, the Appeals Court (CAFC) ruled -

The plain language of Section 271(a) does not preclude infringement where a system such as RIM's, alleged to infringe a system or method claim, is used within the United States even though a component of that system is physically located outside the United States... [W]hen RIM’s United States customers send and receive messages by manipulating the handheld devices in their possession in the United States, the location of the use of the communication system as a whole occurs in the United States.

The CAFC did distinguish, for infringement purposes, usage of a claimed apparatus or system from that of a method, finding that, under § 271(a), every step of a method must occur within the United States for the method to be infringed. So, for the purposes of patent infringement, a device is considered used in the U.S. if it is used in the U.S., but a method is not infringed unless all of the method steps occur in the U.S.

RIM's argument regarding infringing use is as follows.

Section 271(a) expressly limits “use” infringement to use “within the United States.” 35 U.S.C. § 271(a) (emphasis added). In 1972 this Court drew a bright line around the nation’s borders when it held—in a patent infringement case involving manufacture and export of an unassembled shrimp deveining machine - that § 271(a) has no extraterritorial effect. See Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 531 (1972). That was almost 35 years ago, prior to the advent of the Internet and email. The fundamental but cutting-edge question here, which the Court did not address when it decided Deepsouth, is whether the territorial limitation of § 271(a) to use “within the United States” precludes a finding of infringement where fixed, crucial operational components of an Internet-based global tele-communications system are located outside the United States.

The court of appeals should have held, consistent with Deepsouth, that § 271(a) means what it says, and that unless and until Congress enacts an exception for use of a transnational system whose operation depends upon a critical foreign component, such systems are excluded from claims of “use” infringement. Instead, the Federal Circuit panel “enacted” just such an exception to § 271(a), albeit by holding that an individual’s use of the transnational BlackBerry system is not extraterritorial.

These two paragraphs did not follow one another in RIM's brief, and so it was not quite so obvious that RIM is talking out of both sides of its mouth, in stating that the Supreme Court Deepsouth ruling didn't address the issue, and then later, that Deepsouth did address the issue, such that the CAFC ruling wasn't consistent with Deepsouth.

In the Supreme Court ruling of Deepsouth Packing Co. V. Laitram Corp., 406 U.S. 518 (1972), Deepsouth made a shrimp deveiner apparatus that, if manufactured in the U.S., would have infringed Laitram's patent. So Deepsouth split the device into three subassemblies, and shipped the three parts separately to foreign buyers, who put the parts together, thus legally evading infringement under § 271(a). Really a quite different situation than what RIM is doing.

Here's RIM's bottom line argument -

[T]he [CAFC's] opinion imports into the plain text of § 271(a) a new principle that “[t]he use of a claimed system under section 271(a) is the . . . place where control of the system is exercised and beneficial use of the system obtained.”

Interesting use of the word "import."

Posted by Patent Hawk at December 19, 2005 12:03 AM | Litigation

Comments

It is humorous that this brief attempts to base reason partly upon the assumed legitimatization of the term ‘Patent Troll’.

Given Alan Greenspan's remarks from last year concerning the nature of our economy:

'In recent decades, for example, the fraction of the total output of our economy that is essentially conceptual rather than physical has been rising. This trend has, of necessity, shifted the emphasis in asset valuation from physical property to intellectual property and to the legal rights inherent in intellectual property. Though the shift may appear glacial, its impact on legal and economic risk is beginning to be felt.'

And the fact that the term was coined by one whom is now a practicing troll:

‘With all of these advantages, it’s no wonder that many individuals and companies have decided to join the ranks of the trolls. One of the most famous converts is Peter Detkin, who invented the term “patent troll” in 2001 while serving as in-house counsel for Intel. Detkin is now a managing director at Intellectual Ventures, which most observers characterize as a troll. ’

I think the term and its derogatory implication will be inevitably become outdated just as previous disdain for evolutionary methods of commerce were gradually subdued by progress:

‘The butcher, the baker and the candlestick maker who bartered their wares and services for tablecloths and cooking pots avoided criticism, but lowly retailers - rivenditrice - who sold produce they had not grown themselves were compelled to carry banners or tablets bearing the shameful letter "R" to indicate their stigmatized trade.’
'SHOPPING IN THE RENAISSANCE,' BY EVELYN WELCH

Posted by: small inventor at December 20, 2005 7:47 AM