Patent Law

When Can a Digital File be a "Product" under Section 271(g)?

By Dennis Crouch

Yangaroo v. Destiny Media Tech (E.D. Wisc. 2010)

In an interesting trans-national infringement case, Judge Griesbach awarded summary judgment of non-infringement in favor of the accused infringer. The court held that the Canadian-based defendant's actions did not qualify as infringement under Section 271(g)'s proscription against importation-of-a-product-made-by-a-patented-process.

35 USC 271(g): Whoever without authority imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer. . .

The asserted patent claims a particular method of distributing a content file over a network. After a series of steps, recipient terminals are provided with access to the content file. The accused infringer (Destiny) distributes encrypted music files using a method that (arguably) would infringe the patent under 271(a) if it had been performed within the US. The focal-point of the 271(g) dispute here was on whether the digital music files could be considered ?products? within the meaning of 271(g).

Some prior cases:

• Bayer AG v. Housey Pharm., Inc., 340 F.3d 1367, 1371-72 (Fed. Cir. 2003) (271(g) applies only to ?physical products? and does not extend to ?information? produced by a patented process.).
• NTP, Inc. v. Research In Motion, Ltd., 418 F.3d 1282 (Fed. Cir. 2005) (citing Bayer and holding that email packets sent from Canada were not ?products . . . [b]ecause the ?transmission of information,? like the ?production of information,? does not entail the manufacturing of a physical product . . . .?).
• CNET Networks, Inc. v. Etilize, Inc., 528 F. Supp. 2d 985 (N.D. Cal. 2007) (transmission of electronic catalog of product information could be a ?product? within the meaning of 271(g); distinguishing NTP and Bayer as involving ?services? and "information" rather than ?products? and stored data).
• Ormco Corp. v. Align Technology, Inc., 609 F. Supp. 2d 1057 (C.D. Cal. 2009) (a three dimensional digital representation of teeth transmitted to recipients in the United States was a product).

Present Decision: In Yangaroo, the court distinguished CNet and Ormco by holding that the distributed music file was not a ?product? of the method because the music file was not created by the claimed process.

Notes:

• The Defendant (Destiny) did modify the music files during its distribution process by encrypting them. The district court held that the newly encrypted files could not be considered 271(g) products because the asserted patent did not claim encryption.
• Ted Sabity handled the defense.

Full post as published by Patently Obvious on June 11, 2010 (boomark / email).