Medgraph v. Medtronic: Divided Infringement in the Limelight

By: A. Rusty Rogers

In the wake of the Akamai Techs. Inc. v. Limelight Networks, Inc. family of decisions, the standard for finding divided infringement has become somewhat more favorable for patent holders in certain cases.  However, after protracted litigation amidst the shifting sands of divided infringement jurisprudence, Medgraph learned the hard way that establishing direct infringement between multiple actors first begins with the bedrock principle that a patent holder must provide evidence of actual infringement of each claim limitation.

Direct infringement of a claim under 35 U.S.C. § 271 requires a patent holder to establish infringement of each limitation of a patent claim by an alleged infringing party.  However, for some method claims, showing direct infringement becomes increasingly difficult because a subset of steps in a claim may be performed by multiple actors, a situation known as divided infringement.  Nevertheless, the Federal Circuit noted en banc in Akamai Techs., Inc. v. Limelight Networks, 786 F.3d 899, Inc. (Fed. Circ. 2015) that direct infringement may be found by attributing claim steps done by a secondary actor to a primary actor by showing that: (1) the primary actor has agency over the secondary actor, or that (2) the actors are part of a joint enterprise or the secondary actor is otherwise contractually obligated to perform the steps.  The Federal Circuit also announced a third way liability could imputed on a primary actor under 35 U.S.C. § 271(a): (3) where a primary actor conditions some benefit to the secondary actor by performing the remaining infringing steps and by establishing the “manner or timing of that performance.”

In Medgraph v. Medtronic, the claims at issue were directed to a method of monitoring glucose levels in a patient by uploading patient measurements to a computer system that created a database that then made the data available to the patient and/or a healthcare provider.  Medgraph was set for an uphill battle from the start, however, because the claims were drafted in such a manner that the initial measurement steps would likely be performed by a patient, which would then be sent to Medtronic to perform additional computer-based steps that established a database of information later made available to patient and/or doctor.

On appeal, Medgraph sought to have the case remanded to district court to be adjudicated under the third standard announced in the latest Akamai decision, asserting that Medtronic somehow premised the use of the database services on patient or doctor performance of the inital measurement steps.  The Federal Circuit ultimately rejected this line of argument, and instead focused on the evidentiary record that was deficient of any indication that the missing steps not performed by Medtronic were actually performed by a patient or doctor.

From the practitioner perspective, there are a couple of takeaways from Medgraph.  First, any suit for direct infringement begins with a showing that the patent claims at issue were indeed infringed.  Secondly, it is important to draft claims in such a way that a single infringer is targeted, minimizing the number of unnecessary steps that may be performed by end users or other third parties.  With the benefit of hindsight, it is tempting to think that the claims at issue in Medgraph should have been drafted more narrowly to create liability from the practice of the computer-based method performed by Medtronic to circumvent issues of divided infringement. However, in the realm of software and medical diagnostics, this can be a difficult balancing act, as the desire to draft claims to capture simple computational steps must be tempered with the need to include tangible structures and concrete steps to avoid the pitfalls introduced by recent changes in patent eligible subject matter following the Alice and Prometheus decisions that seek to curb claims directed to “abstract” principles and routine computer automation.