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[Chas]

I'm aware of NTP v Rim and also of Centillion v Quest, but not being a lawyer, there are issues unclear to me....

If I draft a system claim that covers just the server that provides a network service to cell phone users, and the server is located outside the US, then all components of the claimed system lie outside the US. 

Would the claim be infringed if the users of the service (cell phone users) are within the US?  (beneficial use of the system in the US)  Or is it necessary for infringement that a portion of the system lie within the US?  Should I be drafting a system claim that include the end user's handsets?

Who would be the infringers -- the party putting the system to use (cell phone users) or the operator of the system?

Thanks in advance for any comments.

[JimIvey]

Would the claim be infringed if the users of the service (cell phone users) are within the US?  (beneficial use of the system in the US)  Or is it necessary for infringement that a portion of the system lie within the US? 

I think NTP states that people in the US can "use" (in the US) things located outside the US.

Should I be drafting a system claim that include the end user's handsets?

Wouldn't hurt.

Who would be the infringers -- the party putting the system to use (cell phone users) or the operator of the system?

Well, the users would be.  The system operator could be, too.

Of course, you'd prefer that the system operator is liable -- easier to sue one defendant with lots of money rather than thousands of individuals.

Centillion is a little worrying.  I might not be remembering it correctly, though.  The claims covered the end user system (personal computer).  Qwest didn't sell the PC, so it didn't sell the invention.  They weren't vicariously liable because selling an installation disk that, by ordinary use in the manner intended and likely instructed by Qwest, "made" the invention was not an inducement to do so.  Customers were free to not buy the software.  Maybe Beauregard claims would have helped.

I wonder if NTP would have come out differently if RIM didn't sell devices that were specifically designed and intended to use their system in an infringing way.  In other words, if RIM's system worked with end-user equipment that they didn't provide, I wonder if the result would have been different.

I also wonder to what degree the claiming of the server (NTP) or the client (Centillion) makes a difference.  I suppose I should re-read those cases.

Regards.

[Chas]

Who would be the infringers -- the party putting the system to use (cell phone users) or the operator of the system?

Well, the users would be.  The system operator could be, too.

Of course, you'd prefer that the system operator is liable -- easier to sue one defendant with lots of money rather than thousands of individuals.

Jim, thanks for your reply.

There may be an argument that the system operator uses the system (if I don't claim the handsets), but the operator would be outside the US, so that's no good.  Vicarious liability is not applicable because there is no inducement.  Is there another type of joint infringement that may be applicable?

Regarding Beauregard claims, they don't seem very useful in this case because any software installed on the handsets would probably be downloaded.  If propagated signal claims are still viable, then perhaps these could be part of a claimed system that includes the handsets. 

Does that sound reasonable or am I on the wrong track?

[JimIvey]

There may be an argument that the system operator uses the system (if I don't claim the handsets), but the operator would be outside the US, so that's no good.  Vicarious liability is not applicable because there is no inducement.  Is there another type of joint infringement that may be applicable?

Well, if you could craft claims that cell towers would infringe, that would be helpful.  Cell phones don't have much range, so you can't have a cell phone in Texas talking to a tower in Canada.

Regarding Beauregard claims, they don't seem very useful in this case because any software installed on the handsets would probably be downloaded.  If propagated signal claims are still viable, then perhaps these could be part of a claimed system that includes the handsets. 

I always thought including carrier waves and signals in Beauregard claims was a bit silly.  At both ends of the transmission, the software is realized in computer readable media. 

Once you download the software, what is it?  It's computer instructions stored in the RAM/ROM/flash of your phone -- computer readable media.  You've made it (by downloading and installing); you're using it; and the guys in Canada sold it to you in the US and imported it.  Or, you imported it and they "contributed" or "induced" by exporting it to you....  Not sure if that last theory would work.  But they definitely sold it in the US.

Regards.

[khazzah]

I find this to be a very interesting topic, ie, how do the various acts of 35 USC 271 apply to claims to computer readable media.

Once you download the software, what is it?  It's computer instructions stored in the RAM/ROM/flash of your phone -- computer readable media.  You've made it (by downloading and installing);

So you think the end user is a direct infringer under the "make" clause of 271? Interesting. Don't think I've read any case law that interprets it this way.

Then again, I don't recall any case law on "making" software other than dicta in Microsoft v AT&T. The the dissent said that the Microsoft "made" the software under 271 when they supplied a master disc to another company for replication. The majority also said that

when a user downloads software from a server on the Internet, the server "supplies" the software to the user's computer by transmitting an exact copy.

you're using it;

No that does seem like a natural reading of "use" under 271. AFAIK, this is how courts interpret "using" software.

and the guys in Canada sold it to you in the US

So your reasoning is that the "sale" of 271 takes place in the US because the buyer is in the US? Even when the seller is outside the US? There is plenty of case law on the territoriality of an infringing "sale". I don't recall what it is.

and the guys in Canada sold it to you in the US and imported it.  Or, you imported it and they "contributed" or "induced" by exporting it to you.... 

I think the buyer imports the article, not the seller.

[Chas]

and the guys in Canada sold it to you in the US

So your reasoning is that the "sale" of 271 takes place in the US because the buyer is in the US? Even when the seller is outside the US? There is plenty of case law on the territoriality of an infringing "sale". I don't recall what it is.

It seems that the current model of distributing mobile apps should provide some leverage.  I imagine that for US customers most of the servers for iTunes, Android or Amazon apps stores are in the US, and therefore I would assume those sales are considered to be taking place in the US.

Which brings another question to mind:  couldn't the location of the transaction (where the seller or seller's representative receives the payment) be different from the location of the server from which the software is sent?  Which governs the location of the "sale"?

[khazzah]

Which brings another question to mind:  couldn't the location of the transaction (where the seller or seller's representative receives the payment) be different from the location of the server from which the software is sent?  Which governs the location of the "sale"?

Yeah, that was the point I was trying to make in my comment.

The most recent ruling from the Fed Cir on the location of a 271 "sale" is last year's Transocean v. Maersk. The court explained that several factors are considered in determining the territoriality of the sale, including the location of: contract negotiation; performance; and delivery.

In your hypo, is the download of the software from server to client the "delivery" of the product being sold?

[JimIvey]

For what it's worth, many web sites and catalogs restrict countries and/or states to which they'll deliver due to restrictions on sales in those countries/states.  While perhaps not controlling in the law of patents, the locus of delivery seems to be pretty important.

An interesting analogy in the copyright space is the history of allofmp3.com.  That was a site based in Russia selling MP3s for about the same price as music on CDs, but much cheaper than CDs sell in the US due to the exchange rate -- like about 10 cents/song, $1 per album.  And, they sold to anybody anywhere, including people in the US.

Eventually, the RIAA was able to get them to implement restrictions that made buying their music from the US nearly impossible.  One of the techniques was to go after VISA, MasterCard, and paypal as contributory infringers.  FWIW, it worked in that those companies refused to process transactions with allofmp3.com or its immediate successor.

Of course, copyrights are expanding while patent rights appear to be shrinking.  And, of course, that has absolutely nothing to do with the fact that copyrights tend to be owned by very large, very wealthy entities and patents tend to be asserted against very large, very wealthy entities.  So, while it might seem as if the US would send the national guard to protect copyrights, that might not translate to patent rights.

Lastly, I don't want to kick any hornets' nest by mentioning that some .com site out there whose name would suggest that they legally sell sounds under a slightly different international copyright license.

Regards.

[Chas]

In your hypo, is the download of the software from server to client the "delivery" of the product being sold?

Well, there are a few variations, but in one there is an offshore server delivering a service to a cell-phone user, and the user has downloaded software onto his/her phone that enables the use of the service.  In sub-variation (a) this software alone is patentable, while in sub-variation (b) it is not patentable by itself (although it would be as a part of the entire system). 

Regarding sub-variation (a), the answer is "yes", this is the delivery of the product being sold -- unless it isn't sold but rather given away like so many other free apps.  If iTunes is selling the app, then I would think that they would be infringing.  But if the app is free, then perhaps they would be infringing because they imported the app?  What do you think?

There may be an argument that the system operator uses the system (if I don't claim the handsets), but the operator would be outside the US, so that's no good.  Vicarious liability is not applicable because there is no inducement.  Is there another type of joint infringement that may be applicable?

Well, if you could craft claims that cell towers would infringe, that would be helpful.  Cell phones don't have much range, so you can't have a cell phone in Texas talking to a tower in Canada.

That's very interesting.  But the only angle I can think of is that they may be facilitating the sale or importing of patented software.  Is that a viable argument?  Have patent holder successfully gone after cell tower operators in this way?  Maybe this an instance in which propagated signal claims would be needed.

[khazzah]

In your hypo, is the download of the software from server to client the "delivery" of the product being sold?

[An] offshore server delivers a service to a cell-phone user, and the user has downloaded software onto his/her phone that enables the use of the service. 

Understood. Good to have some details to flesh out the hypo.

In sub-variation (a) this software alone is patentable

Meaning you have claim(s) directed to the client software.

You didn't say whether this is a method of use claim or a device claim or a computer-readable-medium claim. Might make a huge difference -- see below.

while in sub-variation (b) it is not patentable by itself (although it would be as a part of the entire system). 

Such a system claim -- either as a true "system" claim or as a method of using the system as a whole -- brings up a whole 'nother type of analysis. Namely, divided infringement. Method claims are virtually useless for this under Akamai v. Limelight. System claims fare slightly better under Centillion.

Regarding sub-variation (a), the answer is "yes", this is the delivery of the product being sold -- unless it isn't sold but rather given away like so many other free apps.  If iTunes is selling the app, then I would think that they would be infringing. 

Depends on exactly what type of claim you have.

Method of use ... sale of a product doesn't infringe a method of use claim.

Computer-readable-medium claim ... are you really selling the medium? Or are you selling the bits? Shrink wrap software is the raison d'etre for CRM claims. But I'm not positive that a CRM claim covers a digital downloads that executes on a client.

A device claim including a processor configured with functional stuff that distinguishes over the art? Apple isn't selling that device.

[smgsmc]

Computer-readable-medium claim ... are you really selling the medium? Or are you selling the bits? Shrink wrap software is the raison d'etre for CRM claims. But I'm not positive that a CRM claim covers a digital downloads that executes on a client.

This is an intriguing point.  If digital downloads aren't covered, then CRM claims become virtually worthless.  Most software is available as downloads these days. 

[Chas]

You didn't say whether this is a method of use claim or a device claim or a computer-readable-medium claim. Might make a huge difference -- see below.

Jim and I were discussing system claims, Beauregard claims, and propagated system claims in light of NTP and Centillion...

If I draft a system claim that covers just the server that provides a network service to cell phone users, and the server is located outside the US, then all components of the claimed system lie outside the US. 

Would the claim be infringed if the users of the service (cell phone users) are within the US?  (beneficial use of the system in the US)  Or is it necessary for infringement that a portion of the system lie within the US?  Should I be drafting a system claim that include the end user's handsets?

also...

Regarding Beauregard claims, they don't seem very useful in this case because any software installed on the handsets would probably be downloaded.  If propagated signal claims are still viable, then perhaps these could be part of a claimed system that includes the handsets. 

What is your take on propagated signal claims?

[khazzah]

What is your take on propagated signal claims?

The Federal Circuit's take on signal claims is that they're invalid under 101: In re Nuijten.

[khazzah]

Computer-readable-medium claim ... are you really selling the medium? Or are you selling the bits? Shrink wrap software is the raison d'etre for CRM claims. But I'm not positive that a CRM claim covers a digital downloads that executes on a client.

If digital downloads aren't covered, then CRM claims become virtually worthless.  Most software is available as downloads these days. 

Agreed that CRMs have no value if so interpreted. Don't know of a case on point.

[JimIvey]

Computer-readable-medium claim ... are you really selling the medium? Or are you selling the bits? Shrink wrap software is the raison d'etre for CRM claims. But I'm not positive that a CRM claim covers a digital downloads that executes on a client.

If digital downloads aren't covered, then CRM claims become virtually worthless.  Most software is available as downloads these days. 

Agreed that CRMs have no value if so interpreted. Don't know of a case on point.

I don't see how a reasonable court could ever hold that.  Yes, a big assumption, but I'd go so far as to suggest that such a holding would be clearly wrong.

Let's look at an example that's probably most likely to not be a CRM: flash or java or any software that's downloaded for execution by a client device without persistent storage on the client device.  First, it's entirely likely that such software would be persistently stored in cache.  Second, once downloaded, it's stored in RAM for execution, even if only transiently.  Is RAM not a CRM?

I would think that CRM is actually interpreted in light of the specification and prosecution history etc. like all patent terms.  Perhaps it's a good idea to include RAM in a definition for CRM in the Spec.  Here's my boilerplate for that:

Computer system 100 includes one or more microprocessors 102 (collectively referred to as CPU 102) that retrieve data and/or instructions from memory 104 and execute retrieved instructions in a conventional manner.  Memory 104 can include generally any computer-readable storage medium including persistent memory such as magnetic and/or optical disks, ROM, and PROM and volatile memory such as RAM.

I believe that flash programs are downloaded to my hard drive and then loaded into RAM for execution by a flash player, which is an interpreter for the flash programming language.  Given my naming both magnetic disks and RAM as things included in "computer-readable storage medium", how can flash downloaded into my computer for execution not be considered to infringe a CRM claim?

FWIW, I still maintain that the case(s) excluding carrier waves and other transient signals are clearly wrong.  Such signals clearly both transform matter and require a particular machine.

Regards.