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February 24, 2006

Users of the popular BlackBerry wireless messaging service might be following news about that lawsuit against its provider, Research in Motion (“RIM”), and might be aware that the District Court judge presiding over the case will soon decide whether to shut down the system entirely. What might be less widely appreciated, however, is that RIM was found liable for infringing a United States patent even though a critical component of its messaging system is located not in the United States, but in Canada.

In NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282 (Fed. Cir. 2005), the Court of Appeals for the Federal Circuit (the intermediate appellate court in which all patent appeals are heard) reversed the lower court’s judgment that RIM infringed the “process” claims in the five patents at issue in the case, but affirmed the court’s finding that RIM infringed the “system” claims – despite the fact that part of RIM’s system is located in Canada. As the Court noted, ordinarily, “whether an infringing activity . . . occurs within the United States can be determined without difficulty. This case presents an added degree of complexity, however, in that: (1) the ‘patented invention’ is not one single device, but rather a system comprising multiple distinct components or a method with multiple distinct steps; and (2) the nature of those components or steps permits their function and use to be separated from their physical location.” 418 F.3d at 1313.

The “BlackBerry system . . . allows out-of-office users to continue to receive and send electronic mail, or ‘email’ communications, using a small wireless device. The system utilizes the following components: (1) the Blackberry handheld unit . . .; (2) email redirector software . . .; and (3) access to a nationwide wireless network. . . .” Id. at 1289. Although there are many complicating details, for purposes of this memo, it is necessary to understand only that in delivering email to a handheld device in the United States, the “email redirector software” routes the message “to the BlackBerry ‘Relay’ component of RIM’s wireless network, which is located in Canada.” Id. at 1290. The “message travels through the BlackBerry Relay, where it is . . . routed from the processors in the user’s email system to a partner wireless network. That partner network delivers the message to the user’s BlackBerry handheld, and the user is ‘notified virtually instantly’ of new email messages.” Id.

The provision under which the patentee, NTP, asserted infringement, section 271(a) of the Patent Act, provides that “‘whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.’” Id. at 1313. RIM defended against the infringement claim contending that “the statutory requirement that the allegedly infringing activity occur 'within the United States’ was not satisfied because the BlackBerry Relay component of the accused system is located in Canada.” Id.

The Federal Circuit stated that the “question before us is whether the using, offering to sell, or selling of a patented invention is an infringement under section 271(a) if a component or step of the patented invention is located or performed abroad.” Id. at 1315. The Court separately analyzed the claims concerning a system for mobile email delivery and the claims concerning a process for the mobile delivery of email. As to the system claims, the Court held that the “use of a claimed system under section 271(a) is the place at which the system as a whole is put into service, i.e., the place where control of the system is exercised and beneficial use of the system obtained. Based on this interpretation of section 271(a), it was proper for the jury to have found that use of NTP’s asserted system claims occurred within the United States.” Id. at 1317. In other words, because a BlackBerry user in the United States retrieves his email in the United States, he uses the BlackBerry system in the United States, and RIM infringes NTP’s system claims by providing the service.

As to the process claims, however, the Court reasoned that “[b]ecause a process is nothing more than the sequence of actions of which it is comprised, the use of a process necessarily involves doing or performing each of the steps recited. This is unlike use of a system as a whole, in which the components are used collectively, not individually.” Id. at 1318. So the Court held “that a process cannot be used ‘within’ the United States as required by section 271(a) unless each of the steps is performed within the country.” Id.

The Supreme Court declined to review the case, and until a later court ruling or legislative action modifies it, it is controlling law. So those seeking to patent Internet or computer-related inventions should give careful consideration to including “system” claims whenever possible to maximize the reach of any patent that might issue. And those seeking to avoid “system” claims in developing their own services cannot rely on the fact that part of the system is located outside the United States to avoid infringing a United States patent.

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