Finding the Mastermind in Joint Infringement Suits
The Federal Circuit's recent decision in Golden Hour Data Systems Inc. v. emsCharts Inc. and Softtech emphasizes the challenge companies faces when entering into partnerships (which have become increasingly common to save costs) where their joint product may be subject to a claim of patent infringement. While the traditional standard for infringements requires that the patentee find a single party liable for practicing each and every element of a patent claim, the Federal Circuit has held that an offending party cannot avoid liability by delegating out steps of a patented process to another entity.
In a situation involving joint infringement, the patentee must establish that one party directs and controls the partnership to attribute liability for the infringement to that party. Thus, companies entering into partnerships should consider the scope of possible individual liability for patent infringement in the event that the joint product is found to infringe. The recent Golden Hour decision provides valuable guidance for companies to assess their particular risk and allocate any potential liability.