In McKesson Technologies Inc. v. Epic Systems Corp. (Apr. 12, 2011), the Court of Appeals for the Federal Circuit affirmed once again the rule that a process claim in a patent cannot be directly infringed unless a single entity performs all steps of the process or entirely controls the use of the process. First articulated in BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007) and later applied in Muniauction, Inc. v. Thomson Corp., 552 F.3d 1318 (Fed. Cir. 2008), this “single-entity rule” states that “where the actions of multiple parties combine to perform every step of a claimed method, the claim is directly infringed only if one party exercises ‘control or direction’ over the entire process such that every step is attributable to the controlling party.” Muniauction, 532 F.3d at 1329 (citing BMC Res., 498 F.3d at 1380-81). In McKesson, the lack of a single direct infringer doomed the plaintiff’s claim for inducement of infringement.
Given the BMC Resources rule, the result in McKesson is unsurprising. The method claim asserted by McKesson is directed to “a method of automatically communicating between at least one health-care provider and a plurality of users serviced by the health-care provider,” and requires that one of the users (i.e., patients) “initiat[e] a communication … to the provider.” Because the remaining method steps are performed by the health-care provider, there can only be direct infringement if the user can be said to be acting under the “control and direction” of the provider. Since it was clear that patients were not obligated by their health-care providers to use the accused software, Judge Linn, writing the opinion of the court, had no trouble concluding that “the voluntary actions of patients” could not be deemed “the vicarious actions of their doctors.” Since there was no direct infringer, there could be no indirect infringement.
More surprising than McKesson’s result, however, is the process by which the decision was reached. Judge Linn’s opinion for the court affirms the “single-entity rule” from BMC Resources and easily concludes, under the facts of record, that there was no directly infringing entity. Judge Bryson, on the other hand, supplies a very brief concurring opinion:
I agree that the decision in this case is correct in light of this court’s decisions in BMC Resources, Muniauction, and Akamai Technologies. Whether those decisions are correct is another question, one that is close enough and important enough that it may warrant review by the en banc court in an appropriate case.
So, Judge Bryson agrees with the result, given the precedent, but suggests that the single-entity rule is wrong. Finally, Judge Newman provides a vigorous dissent, arguing that the single-entity rule is not only ill-conceived, but is flatly inconsistent with prior Federal Circuit decisions. In distinct contrast to Judge Bryson’s approach, Judge Newman argues that the McKesson panel should have ignored the BMC Resources decision, and applied earlier decisions that, in her view, “applied the law of infringement as a straightforward matter of tortious responsibility.”
Thus, the BMC Resources single-entity rule was applied in McKesson to affirm the dismissal of an infringement claim, despite the fact that only one of the three judges is convinced that the single-entity rule is correct as a matter of law! Clearly, at least two judges are prepared to vote for en banc reconsideration of the single-entity rule. On the other hand, in addition to Judge Linn, three active judges have participated in panels either creating or affirming the single-entity rule. (These judges are Rader, Gajarsa, and Prost; Judge Plager, who was on the Muniauction panel, is on senior status.) With the recent confirmation of Judge Jimmie Reyna, there are now eleven active judges on the Federal Circuit. Can McKesson get a majority of those votes, to force an en banc review of the single-entity rule?