Important Recent Decision: Retailers Cannot be Sued for Inducing Infringement Based on Manufacturer’s Product Manuals

March 7, 2014

In a significant recent decision for companies accused of indirect infringement with respect to products they sell that are manufactured by others, Judge Gilstrap of the Eastern District of Texas, held that the alleged resale of products that include manufacturer authored user guides does not expose retailers to claims of inducing infringement, despite allegations that the retailer was aware of the instructions included with the product.Tierra Intellectual Borinquen, Inc. v. ASUS Computer International, Inc. and OfficeMax, Inc., slip op. (E.D.Tx., March 4, 2014).

Defendant OfficeMax was accused of infringing patents that relate to user-login and signature features. Plaintiff contended that OfficeMax induced infringement when it sold products manufactured by ASUS that allegedly practiced the invention. Plaintiff alleged that OfficeMax sold ASUS products that included the manufacturer’s user guides which instructed on the use of the accused features. Plaintiff argued that OfficeMax, by continuing to sell these products after being advised of the alleged infringement, knowingly induced its customer’s infringement of the asserted patents.

Judge Gilstrap granted OfficeMax’s motion to dismiss for failure to state a claim. Judge Gilstrap noted that Plaintiff alleged no specific relationship between OfficeMax and the user guide. OfficeMax was not alleged to have written the guide, made it available on its own website, or otherwise to have furnished the guide to customers through its own actions. Judge Gilstrap concluded that the Plaintiff had failed to sufficiently allege that OfficeMax had “taken affirmative steps to bring about the desired [i.e. infringing] result.”

The Court noted that:

Having learned of ASUS’s infringing behavior, [OfficeMax] simply continued its business as usual. It did not highlight the instruction in the User Guide to customers or advertise the TF700’s infringing features; in fact, literally no change in OfficeMax’s behavior is alleged. It is clear to the Court that the failure to change behavior in light of a new fact cannot be characterized as an affirmative step evincing desire on the part of OfficeMax that users infringe TIB’s patents.

Judge Gilstrap’s reasoning may be useful to other retailers who routinely find themselves charged with inducing infringement merely because they sell products that are asserted to infringe when used by customers.

If you have any questions, please contact the author or another Firm attorney.

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