Issue 214 | June 14, 2004
Dynacore Holdings v. U.S. Philips Corp.

In Dynacore Holdings v. U.S. Philips Corp., Nos. 03-1305, - 1306, (Fed. Cir. March 31, 2004), the federal circuit affirmed the district court’s summary judgment that defendants did not infringe any claims of Dynacore’s 732 patent, directed to a local area network (LAN) that connects computer devices having differing capabilities such that devices with an “enhanced” communication capability can take advantage of those enhancements without disrupting the operation of devices possessing only “common” capabilities.

Adopting the detailed report of a Special Master construing certain claim terms in the ‘732 patent in suit, the district court ruled that IEEE 1394 compliant networks did not directly infringe the ‘732 Patent, leaving implicit Dynacore’s consequent failure to prove its allegations of the defendant’s indirect infringement of the IEEE 1394 standard. The district court granted defendants’ motion for summary judgment of noninfringement and Dynacore appealed.

On appeal, the federal circuit stated that proof of indirect infringement required a showing that defendants’ actions led to direct infringement of the ‘732 patent. Unconvinced with Dynacore’s showing that -- at best -- a hypothetical direct infringement sufficed to establish the defendants’ broad vicarious liability across the entire category of IEEE 1394 compliant networks, the court stated that liability for indirect infringement must relate to the identified instances of direct infringement. “Plaintiffs who identify individual acts of direct infringement must restrict their theories of vicarious liability—and tie their claims for damages or injunctive relief—to the identified act.”

The court then focused on whether all LANs compliant with the IEEE 1394 Standard directly infringed the ‘732 Patent, or whether there were also substantial non-infringing configurations of IEEE 1394 compliant networks. The court concluded the 1394 Standard and the ‘732 Patent taught two fundamentally different network architectures and that nothing in the IEEE 1394 Standard implied that compliant networks would meet the “equal peers” limitation central to every claim in the ‘732 Patent.

Dynacore failed to cite a single network that both complied with the IEEE 1394 Standard and met the “equal peers” limitation of the ‘732 patent, and failed to present other than speculation that such a network might exist -- clearly insufficient to create a genuine issue of material fact. Dynacore’s failure to prove direct infringement foreclosed its ability to prove indirect infringement because “absent direct infringement of the claims of a patent, there can be neither be contributory infringement nor inducement of infringement.”

To view the full decision visit http://www.aplf.org/mailer/Issue214.doc

To discuss this topic further, please feel free to contact the author Michael R. Dzwonczyk, (mdzwonczyk@sughrue.com), at Sughrue Mion, PLLC in Washington DC., USA.

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