The Federal Circuit’s Divided Path on Divided Infringement
Patent – Patently-O 2024-12-23
Summary:
by Dennis Crouch
The Federal Circuit recently issued an important decision refining how courts should analyze infringement of system claims when multiple parties are involved in operating different components of the claimed system. This post looks at the court’s new decision in CloudofChange, LLC v. NCR Corp., No. 23-1111 (Fed. Cir. Dec. 18, 2024) and contrasts it Centillion Data Systems, LLC v. Qwest Communications International, Inc., 631 F.3d 1279 (Fed. Cir. 2011).
These cases highlight a recurring challenge in patent law – how to analyze infringement when a claim requires components controlled by different actors. The issue is particularly salient for modern technology systems that often involve both vendor-operated backend servers and customer-operated frontend devices.
The Centillion Framework
Centillion involved a system for processing and delivering telephone billing information. The claimed system required both backend components (operated by the service provider) and frontend components (operated by customers). The court had to determine whether Qwest, which operated only the backend system, could be liable for direct infringement when customers controlled the frontend components.
The Federal Circuit established that to “use” a system under 35 U.S.C.