The court denied in part defendant's motion for summary judgment of noninfringement based on a divided infringement theory even though the third party performing a step of the claimed method was not defendant's agent. "The parties’ dispute turns on the appropriate test for control or direction. . . . [Defendant's payment processing contractor] is clearly not an agent of [defendant]. There is no evidence that [defendant] asked [its contractor] to customize its services in any way. Rather, the evidence shows that [defendant] entered into the standard contract that [its contractor] provides all its customers. . . . Nonetheless, the Federal Circuit has stated that a party cannot avoid infringement, simply by contracting out steps of a patented process to another entity. . . . This suggests that control and direction must be considered from the perspective of the claim limitation that the third party is alleged to satisfy. If [defendant's payment processing contractor] could fulfill its obligation under the contract without satisfying the limitation at issue, [defendant] could be said not to control or direct [its contractor]. However, [plaintiff] has presented evidence that [defendant] contracted [its contractor] to perform the exact steps required by the claims. [Defendant] required [its contractor] to satisfy the limitations at issue and there is no evidence that [its contractor] had the discretion to perform its services in any other manner."
Ronald A Katz Technology Licensing L P v. Ameren Corporation et al, 2-07-cv-04955 (CACD December 3, 2010, Order) (Klausner, J.)
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