Published on:

Claim for Induced Infringement Survives after Akamai Where Inference of Intent to Induce Infringement Was “not only reasonable; it is almost inescapable”

Plaintiffs Transunion Intelligence LLC and Trans Union LLC (collectively, “Transunion”) filed a patent infringement action against Search America over two patents that are directed to a computer-implemented method and software that is used to access a person’s eligibility to receive financial assistance for healthcare services. Transunion asserted both direct infringement and inducing infringement of one of the patents-in-suit.

Search America moved to dismiss the inducing infringement claim, asserting that Transunion had failed to plead that Search America had the specific intent to infringe the patent-in-suit. The district court disagreed. “As discussed at he hearing on Search America’s motion, however, the Court believes that Transunion has pleaded a plausible claim of induced infringement against Search America. In its complaint, Transunion pleads that Search America knew of the ‘937 patent, and Transunion pleads specific facts in support of that allegation – namely, that Search America studied the ‘937 patent to distinguish it from Search America’s own patent application. Fourth Am. Compl. para. 11. Transunion also alleges that Search America performed all but one of the steps of the ‘937 patent and that either Search America or a customer working with Search America performed the remaining step – namely, the inputting of patient data. Fourth Am. Compl. Ex. B at 2. Transunion further alleges that Search America’s customers performed the ‘inputting’ step by populating an on-line form created, controlled, and provided by Search America. Id.”

The district court concluded that these allegations were sufficient to allege that Search America knowingly induced infringement under the standard recently articulated by the Federal Circuit in Akamai Techs., Inc. v. Limelight Networks, Inc., 692 F.3d 1301, 1318 (Fed. Cir. 2012) (en banc). Indeed, the district court found that the inference of intent was almost inescapable: “Whereas the plaintiff In re Bill of Lading relied partly on inferences to allege that the defendants had induced their customers to perform every step of the patented method, Transunion has affirmatively pleaded that Search America performs all but one of the steps and that it induces its customers to perform the final step by creating, controlling, and providing an on-line form for its customers to populate. The inference that Search America intentionally encouraged its customers to populate the form (and thereby intentionally induced infringement under Akamai) by creating, controlling, and providing the form to them is not only reasonable; it is almost inescapable.”

The district court also discussed whether a party could be liable for induced infringement prior to the Akamai decision based on this new standard since it could not have known of the new standard prior to the issuance of the decision. “It appears to the Court, therefore, that the most natural reading of Akamai – and the one most consistent with the actual results in Akamai and Travel Sentry – is that liability for induced infringement requires, not that the defendant knew that its acts would render it legally liable (which would have been impossible pre-Akamai), but rather that the defendant knew and intended that (1) each of the steps that make up the method patent would be performed by someone (either the defendant itself or someone acting at the behest of the defendant) and that (2) these steps would, if performed by a single entity, constitute direct infringement (which is possible both pre- and post – Akamai). Thus, although the Court need not definitively rule on this issue now, the Court finds Search America’s argument doubtful and declines to dismiss any part of Transunion’s induced-infringement claim based on that argument.”

Finally, as this was the third motion to dismiss filed by Search America, the district court directed that no more dispositive motions could be until after the completion of discovery and the Markman hearing. “This is the third motion to dismiss that Search America has filed. As described above, this motion relied on dubious arguments, and litigating this motion has been a poor use of the parties’ resources and this Court’s time. At the hearing on Search America’s second motion to dismiss, the Court asked the parties not to bring any further dispositive motions until they completed discovery and all disputed claim terms had been construed. Search America ignored that instruction, just as it ignored the Court’s instruction not to use its supplemental brief to rebrief arguments that the Court had already considered. Because Search America does not appear to believe that it is obliged to follow oral instructions, the Court will formally order the parties not to file any further dispositive motions until all fact and expert discovery has been completed, all non-dispositive motions have been resolved, and all disputed claim terms have been construed following a Markman hearing.”

Transunion Intelligence LLC and Trans Union LLC v. Search America, Inc., Case No. 11-CV-1075 (PJS/FLN) (D. Minn. Feb. 22, 2013)

The authors of are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or