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[khazzah]

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?

Outside of the patent context, I'm not sure that a POSITA would say RAM is a CRM. I thought this was a really weird usage when I switched from software developer to patent attorney. I agree that when the parse the words of the phrase, computers do read from memory. I suppose I import "persistent" or "permanent" into the phrase, and I don't view RAM as persistent or permanent. 

But we are indeed talking the patent context. So yeah, RAM is a CRM. And many specs I've read that discuss CRM explicitly define it to include RAM.

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?

I agree the end user is using the claimed CRM article when he executes the flash code on his device from disk, RAM or processor cache.

But earlier I made a distinction between infringement though the use prong of 271(a) and the sale prong of 271(a). Perhaps I wasn't clear, but the scenario I'm interested in is sale of the CRM. So I can go after the seller of the software rather than the end user.

So ... the question I'm interested in is this: is it a sale of the CRM when the end user buys the patented software from the service provider, and that software is downloaded to and stored on the user's system. Yes, the code ends up being stored on the client system. But did I buy/sell the CRM?

[JimIvey]

I agree the end user is using the claimed CRM article when he executes the flash code on his device from disk, RAM or processor cache.

....

So ... the question I'm interested in is this: is it a sale of the CRM when the end user buys the patented software from the service provider, and that software is downloaded to and stored on the user's system. Yes, the code ends up being stored on the client system. But did I buy/sell the CRM?

Ah, I see.  The issue isn't whether the sale is in the US when the seller is overseas.  The issue is whether you can pay for something, receive it, and use it and still not have bought it from someone who sold it to you.  I don't see any way that could be considered possible.

Perhaps the confusion is that one CRM at the seller's end and a different CRM is at the buyer's end.  So, perhaps what the buyer has actually bought is a modification to her CRM that transforms it into an infringing CRM, like paying to have a conventional car modified into an electric car that might infringe a claim for an electric car but not the inner workings thereof.  I'd argue that the sale is of the end product.  In the CRM context, the purchaser paid to have an infringing CRM and the seller ensured that the buyer had an infringing CRM in exchange for the money paid and received.

That might come down to vicarious infringement.  Though, considering the seller presents you with an "Install" button, pressing of which creates an infringing CRM without further interaction with the user, the culpability of the seller seems pretty clear.

Another issue is that most software is purportedly licensed and not sold.  In other words, you don't purchase a copy of the software but rather purchase a license to use one copy.  However, excluding that from a "sale" would make renting out infringing products in the US an easy dodge.  And, technically, renting is actually buying a leasehold estate.  What's the law on renting out infringing things in the US?

FWIW, I did dig a bit into the situs of the sale -- well, really, a situs of a sale.  It seems pretty clear that sale to a person in the US who will receive the sold thing in the US for use in the US is an infringing sale in the US regardless of where title changed hands, where the seller is located, where the item is shipped from, etc.

North Am. Philips Corp. v. American Vending Sales, Inc., 35 F. 3d 1576 - Court of Appeals, Federal Circuit 1994
Litecubes, LLC v. Northern Light Products, Inc., 523 F. 3d 1353 - Court of Appeals, Federal Circuit 2008
TRANSOCEAN OFFSHORE DEEPWATER v. Maersk Contractors, 617 F. 3d 1296 - Court of Appeals, Federal Circuit 2010

Regards.

[khazzah]

The issue isn't whether the sale is in the US when the seller is overseas.  The issue is whether you can pay for something, receive it, and use it and still not have bought it from someone who sold it to you.  I don't see any way that could be considered possible.

I see the issue as being slightly different. I see the issue here as: what is "it".

Let's stipulate that the buyer bought "the software" from the service provider. But did the buyer buy the CRM?

Perhaps the confusion is that one CRM at the seller's end and a different CRM is at the buyer's end. 

Yep. That's the issue I was trying to raise. You've explained it better than I.

So, perhaps what the buyer has actually bought is a modification to her CRM that transforms it into an infringing CRM, like paying to have a conventional car modified into an electric car that might infringe a claim for an electric car but not the inner workings thereof. 

Huh. I hadn't thought of it in those terms.

I'd argue that the sale is of the end product.  In the CRM context, the purchaser paid to have an infringing CRM and the seller ensured that the buyer had an infringing CRM in exchange for the money paid and received.

Sounds reasonable. Maybe even persuasive. Nonetheless, I haven't seen the court address this issue, which was my original point. And the Fed Cir holds a number of unreasonable positions when it comes to patents, and especially software. So I certainly wouldn't bet my business on a CRM claim.

That might come down to vicarious infringement.  Though, considering the seller presents you with an "Install" button, pressing of which creates an infringing CRM without further interaction with the user, the culpability of the seller seems pretty clear.

Agreed.

As usual, I've learned something from this exchange.

[khazzah]

FWIW, I did dig a bit into the situs of the sale -- well, really, a situs of a sale.  It seems pretty clear that sale to a person in the US who will receive the sold thing in the US for use in the US is an infringing sale in the US regardless of where title changed hands, where the seller is located, where the item is shipped from, etc.

North Am. Philips Corp. v. American Vending Sales, Inc., 35 F. 3d 1576 - Court of Appeals, Federal Circuit 1994
Litecubes, LLC v. Northern Light Products, Inc., 523 F. 3d 1353 - Court of Appeals, Federal Circuit 2008
TRANSOCEAN OFFSHORE DEEPWATER v. Maersk Contractors, 617 F. 3d 1296 - Court of Appeals, Federal Circuit 2010

Thanks for the analysis. Haven't had time to look into this issue.

[smgsmc]

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'm waiting on a good court case on this.  The USPTO is currently rejecting CRM claims under 101 unless you amend them to read "A non-transitory CRM".  It'll be very interesting whether the USPTO and the courts consider RAM to be "non-transitory".  As an amusing story, I was cleaning out one of my old desks last month, and I found an old programmable calculator.  I mark down the date when I change a battery.  The last time the batteries were changed were in 1997.  When I turned it on, programs and data were still there stored in RAM.  Transitory or non-transitory?

[Chas]

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

Too bad.  Thanks for the reference.

Another issue is that most software is purportedly licensed and not sold.  In other words, you don't purchase a copy of the software but rather purchase a license to use one copy.  However, excluding that from a "sale" would make renting out infringing products in the US an easy dodge.  And, technically, renting is actually buying a leasehold estate.  What's the law on renting out infringing things in the US?

That's an interesting question.  If a US cell-phone user is "using" (NTP) an overseas system, and is paying for the privilege, i.e. renting the system, couldn't it then be argued that the user is buying the system temporarily?  And the service provider has both sold and offered to sell the system for a limited period of time.

A related thought regarding method claims...  The language of 271(a) is "...makes, uses, offers to sell, or sells any patented invention...".  If the patented invention is a method, could it be argued that if a company sells a service that is covered by a method claim, that the company has sold a "patented invention"?

And if there are method claims covering the client, and the cell-phone performs the method after having downloaded the software from a Canadian server, or even if it performs the method as a result of the phone's browser executing javascript downloaded from a Canadian web site, then has the method (the "patented invention") then been imported into the US? 

[khazzah]

Another issue is that most software is purportedly licensed and not sold.  In other words, you don't purchase a copy of the software but rather purchase a license to use one copy.  However, excluding that from a "sale" would make renting out infringing products in the US an easy dodge. 

If a US cell-phone user is "using" (NTP) an overseas system, and is paying for the privilege, i.e. renting the system, couldn't it then be argued that the user is buying the system temporarily? 

Why bother? Just go after the infringer for "use" of the system. The territoriality aspects of the "use" are analyzed under the NTP decision. The "what constitutes use of a distributed system?" aspects of the "use" are analyzed under the Centillion decision.

If the patented invention is a method, could it be argued that if a company sells a service that is covered by a method claim, that the company has sold a "patented invention"?

I'm not sure what you mean by "selling a service."

Sale of an apparatus that implements a method claim is not infringement of the method. Instead, the method is infringed only when the method is performed. See Joy Techs., Inc. v. Flakt, Inc., 6 F.3d 770, 773 (Fed.Cir.1993).

If you're suggesting that selling an article of manufacture that stores software that, when executed, implements a claimed method, is a "sale" of the method ... I don't think that flies either. In the Quanta patent exhaustion case, the Supreme Court distinguished sale of a patented method from sale of patented apparatus:

It is true that a patented method may not be sold in the same way as an article or device, but methods nonetheless may be "embodied" in a product, the sale of which exhausts patent rights.

Now, maybe you can sell a patented method of *manufacture*. You invent an new industrial process and sell the information about how to perform that process. Maybe that's a triggering "sale" under 271(a). [Pure speculation on my part.]

But I think method of use -- which is what we're talking about in the context of software -- is fundamentally different, and falls under the Quanta analysis.

[If] he cell-phone performs the method after having downloaded the software from a Canadian server ..., then has the method (the "patented invention") then been imported into the US? 

Your analysis assumes that one can import a method. I think that this is wrong for the same reasons given above with regard to sale of a method of use.

[JimIvey]

The USPTO is currently rejecting CRM claims under 101 unless you amend them to read "A non-transitory CRM".  It'll be very interesting whether the USPTO and the courts consider RAM to be "non-transitory". 

Based on what?!  RAM is "volatile" meaning that it loses its memory when you turn the power off.  Though, technically, RAM stands for Randomly Accessible Memory and that phrase can literally apply to many persistent storage types.  When the power is maintained, RAM is as persistent as any other storage media.  In fact, there are RAM-based disks used for very high performance -- I think they use a HDD for caching data and lots of uninterruptable power supplies.

More importantly, In re Nuijten ruled on a wireless transmission through the air and made a big deal of the fact that you can't sample or examine the signal for any amount of time.  Of course, the ruling is stupid.  You certain can capture the signal and examine it -- that's how TVs work.  But, RAM can be peeked at and poked (actual names of memory access commands in some programming languages -- peek(address) and poke(address, value)) for a very long time -- hours or even years.

As an amusing story, I was cleaning out one of my old desks last month, and I found an old programmable calculator.  I mark down the date when I change a battery.  The last time the batteries were changed were in 1997.  When I turned it on, programs and data were still there stored in RAM.  Transitory or non-transitory?

Well, perhaps that "RAM" was really flash, really a type of PROM, or EEPROM (electrically erasable programmable read-only memory).  Otherwise, your battery would be giving enough power to keep the RAM running.  A lot of devices use a battery for that specific purpose, though I would think flash is taking over that role in most devices.

But it's still an excellent example of how non-transitory RAM is.  I have a linux-based server running in the closet.  I just checked its uptime:

$ uptime
 09:07:06 up 73 days, 20:46,  0 users,  load average: 0.00, 0.00, 0.00

So, 73 days, huh?  Transitory? 

FWIW, 73 days is nothing.  If I had better UPSs in the closet, it would have been up for years.  Novell brags about uptimes of about 6 years.

Hardly transitory.

Regards.

[Chas]

Another issue is that most software is purportedly licensed and not sold.  In other words, you don't purchase a copy of the software but rather purchase a license to use one copy.  However, excluding that from a "sale" would make renting out infringing products in the US an easy dodge. 

If a US cell-phone user is "using" (NTP) an overseas system, and is paying for the privilege, i.e. renting the system, couldn't it then be argued that the user is buying the system temporarily? 

Why bother? Just go after the infringer for "use" of the system. The territoriality aspects of the "use" are analyzed under the NTP decision. The "what constitutes use of a distributed system?" aspects of the "use" are analyzed under the Centillion decision.

Why bother?  Because I want to go after the operator of the Canadian server.  In many cases the infringer for "use" is an individual consumer with credit card debt. 

And it's not clear to me that the operator of the Canadian system could be found to infringe for "use".  First, even if the operator is found to "use" the system, the operator is not in the US and therefore would not infringe.  (I'm not sure if this argument for non-infringement would apply if the system included the US consumer's cell-phones.)  Second, the Centillion definition of "user" seemed to turn on the "beneficial use of the system", and it is questionable that the operator of the server qualifies under that definition.  According to the decision, Quest did not "use" the infringing system, even though its users did "use" the system.

If the patented invention is a method, could it be argued that if a company sells a service that is covered by a method claim, that the company has sold a "patented invention"?

I'm not sure what you mean by "selling a service."

I'm just trying to grapple with my intuitive sense that if a non-US company delivers value to US customers in exchange for money, and the value that they deliver is based upon a US patented invention, then they should owe something to the company that holds the US patent.  And I'm trying to interpret 271(a) so that it aligns with my intuition (which I'm guessing is widely shared).

Take as an example of a "service", ConvertOnline, a fictitious company that does free online file conversion.  ConvertOnline is based in Canada, has no servers in the US, uses a method of online file conversion that is patented (server method claims only) in the US by another company, and sells to US customers who use their cell-phones or computers to access the service.

271(a) states that if you "sell" a "patented invention" then you infringe.  The method ConvertOnline uses is a "patented invention".  ConvertOnline does "sell" its service to a US customer -- it receives money from customers and in turn it delivers value to its customers by performing its method on behalf of its customers.  So I guess what I mean by "sell a service" is:  perform a method or process on behalf of another party in exchange for money.  And if the method is a "patented invention", and if the party which is paying for and benefiting from the service is in the US, then even if the company performing the service is in Canada, it should count as infringement.


 

[khazzah]

If a US cell-phone user is "using" (NTP) an overseas system, and is paying for the privilege, i.e. renting the system, couldn't it then be argued that the user is buying the system temporarily? 
...
I want to go after the operator of the Canadian server.  In many cases the infringer for "use" is an individual consumer with credit card debt. 

Gotcha. My thinking before was that you could still get the operator for contributory or inducement. And that if "use" would get you where you needed to go, why rely on a new legal theory like renting=temporary buy.

And it's not clear to me that the operator of the Canadian system could be found to infringe for "use". 
...
 Second, the Centillion definition of "user" seemed to turn on the "beneficial use of the system", and it is questionable that the operator of the server qualifies under that definition. According to the decision, Quest did not "use" the infringing system, even though its users did "use" the system.

Are we still talking about claims to the client? Or claims to a system which includes client and server?

I don't know whether/how Centillion applies to claims to a single piece of the system -- haven't thought it through.

Centillion does apply to system claims which involve multiple actors, and says that [depending on facts] you may have a direct infringer. if that direct infringer is the end user, you can [depending on facts] go after the service provider for contributory or inducement.

Contrast this with method claims to the operation of the system. Under Akamai, you have no direct infringer and thus no infringement at all.

First, even if the operator is found to "use" the system, the operator is not in the US and therefore would not infringe. 

Not sure. In NTP, the court found "use" occurred in the US, even though the servers were in Canada. Haven't worked through your scenario to know whether you have use of the system as a whole in the US.