For product claims, the “use” of an accused product that operates outside the U.S. still fails within the reach of Section 271(a) if a user within the U.S. has control over the operations of the accused product

Blue Spike, LLC v. Soundmouse Ltd

Case Number: 1:14-cv-02243

Judge McMahon, addressing the territorial reach of “use” within the United States under Section 271, granted in part and denied in part Defendant Soundmouse’s motion for summary judgment as to Plaintiff Blue Spike’s method claims and product claims, respectively.

Blue Spike filed suit against Soundmouse alleging patent infringement of both method and product claims of four asserted patents, all titled, “Method and Device for Monitoring and Analyzing Signals”:  U.S. Patent Nos. 7,346,4727,660,7007,949,494; and 8,214,175. The asserted patents in general cover methods and products that identify unique digital information of each digital work (or the “digital fingerprint”) and log the digital fingerprints into a reference database to allow content owners to track distribution and unauthorized use of their content, among other things.  In response, Soundmouse filed a motion for summary judgment 1of non-infringement under Section 271(a) because all of the allegedly infringing activities occur outside of the U.S.

Judge McMahan found that the use of Soundmouse’s system could not have infringed the asserted method claims as a matter of law.  In order to infringe a method claim, each of the steps of a method claim must be performed within the U.S.  However, Blue Spike did not dispute that Soundmouse’s accused system conducts its processes outside of the U.S.

The same could not be said of the asserted product claims, where Judge McMahon found some evidence in the record that tends to show that the accused system is “used” within the U.S.  Specifically, even though Soundmouse’s accused product is located and operates outside of the United States, because it appeared undisputed that two customers transmit content from the U.S. for processing and received in the U.S. processed content back from Soundmouse, those two customers had control over the operations conducted outside of the U.S., and thus “used” the accused system within the U.S. in violation of Section 271(a).  Moreover, Judge McMahon found that Soundmouse’s assertion – that the asserted patents do not address customers requesting a service, or a company posting information to a website accessible to its customers – is at best premature as there has been no claim construction order.  Thus, because at the very least there is or may be a genuine issue of fact concerning “the nature of the interface between the US-based customers and Soundmouse’s operations in the UK,” the summary judgment motion as to the product claims was denied.

Lastly, more than 14 days after the court’s order on Soundmouse’s motion, counsel for Soundmouse sought clarification on whether an answer to the complaint was necessary in light of the schedule set forth in that order, to which Judge McMahon ordered Soundmouse to file its answer by next week and that “[he] would not be shocked to hear that you are in default.”

1Defendant Soundmouse filed a motion to dismiss and in the alternative a motion for summary judgment.  The Court held that the motion was a motion for summary judgment because Soundmouse relied extensively on evidence outside the pleadings.

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