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Enforcement of patents in cloud computing

Computer systems are increasingly arranged with a user device in one location connected over a network (e.g. the internet) to remote computing resources (a server-side).

October 2013

The user uploads his/her data to the server, where there is greater capacity to process/store it, and results are delivered to the user over the network. This is particularly attractive for users on the move. All they need is a device with a web-browser and internet access, the storage and computing being handled remotely “in the cloud”. Patents for inventions in this area may be obtainable1 but patents are territorial rights and the question arises whether they can be enforced when the user is in one place and the computing resources are elsewhere, in the hands of a different party that may be in a different country. The patent issues are discussed below from a UK perspective using an illustrative example.

Illustrative example

Fashion showConsider a hypothetical patented invention of a “fashion checker” method and system. At a server, internet activity is monitored and fashion trends for articles are noted. When a consumer goes shopping on the high street he/she can check the fashion rating of an article (e.g. branded sports-shoes) by taking a photo of the article or its barcode on a mobile device and uploading it to the server. At the server, it processes the image and checks whether any fashion rating for the article has been noted, presenting the results at a website that the user is on (and optionally texting the results to the user’s mobile phone). The user downloads an app to the mobile device, but the data processing and storage is at the server-side. The patent claims are granted for the system and method. Some claims are granted covering the user-side; some the server-side; and some “mixed” (describing the entire system and entire method, irrespective of location). A competitor develops and launches a similar “fashion checker” with a mobile phone app.

Who may be liable for patent infringement?

The UK patent infringement issues turn on the language of s60 Patents Act 1977. s60(1) covers direct infringement and s60(2) covers indirect infringement2.

The User

Though patent proprietors may not wish to sue Users, analysis of the potential liability is relevant, as it may be possible to sue the Competitor as a joint tortfeasor with the User (i.e. having participated in or contributed to the User's infringing activity – see below for more detail on joint tortfeasorship), without having to sue the User3.

If patent claims had been granted for the user-side of the system, the User would be liable under s60(1)(a) for keeping and using the claimed product. To show infringement of process claims under s60(1)(b) it would be necessary to demonstrate that the User knew, or it was obvious to a reasonable person in the circumstances, that the activity would infringe the patent.  That illustrates why system claims are preferable for enforcement.

Router with lightsFor a system claim with a mix of user and server-side features, the User can argue it is not “keeping” the claimed system in the UK: the server-side components being kept by someone else.  The servers could be outside the UK.  For example, Amazon, one of the largest suppliers of infrastructure as a service in cloud computing, has its European data centre in Dublin, Ireland.  If the server-side apparatus is located outside the UK, can it be said the whole system is being “used” in the UK?  The point has only been considered by the English Court when addressing indirect infringement (discussed below).

The Competitor

Three possible heads of liability are considered: (i) as a joint tortfeasor with the User; (ii) direct infringement of server-side system and process claims; and (iii) indirect infringement. 

If one assumes the User is infringing a system claim drafted with all the features on the user-side, when can the Competitor be liable as a joint tortfeasor? The question is often asked whether there was a “common design”4 but it is “enough if the parties combined to secure the doing of acts which in the event prove to be infringements.”5 If the Competitor provided Users with service/help to get their app installed and working, or provided ongoing User support then a joint tortfeasor claim may be possible.

Liability in the UK may arise under s60(1)(a) for keeping / using the system. If the servers are located outside the UK, a patentee alleging infringement would argue that this does not provide a defence. Locating the servers outside the UK poses the same jurisdictional issue for proving infringement of server-side process claims under s60(1)(b)6.

CDsIndirect infringement is governed by s60(2).  In 2002, the Court of Appeal in Menashe v William Hill7 held that it was infringement under s60(2) to supply users with software on CDs to install on their computers to turn them into terminals in a gaming system connected over a network with a remote host computer.  The Court of Appeal accepted that "the invention" referred to in s60(2) is that defined by the claim8 which had in it the user device (located in the UK) and the host computer (which was in fact located outside the UK).  Nevertheless, the Court said the gambler was using in the UK the whole claimed system, including the host computer wherever it was located.  This avoids counter-arguments that the use is not by a single party9 in the UK and gives s60(2) a wide application.  If Menashe is followed10 the Competitor’s downloadable app of the illustrative example ought to be treated as a means for “putting the invention into effect in the UK” even if the servers are located outside the UK.  There are no reported decisions clarifying what constitutes “essential” means, but one might expect this to be satisfied if the app does anything more than just point the user at the website.  The requisite knowledge is satisfied too, though in some cases a thing may be supplied that can be used for more than one purpose and then it is necessary to look carefully at what the supplier might reasonably understand the recipient is likely to do with it11

The Competitor might outsource the running of the web-site, and the infrastructure behind, it to a hosting company.  However, the Competitor would be responsible for loading, maintaining and updating the software on the host infrastructure and therefore its potential liability ought to remain the same as if it had not outsourced the hosting.

Comments and conclusions

Modern computing systems - and cloud computing in particular - operate without regard to national borders, with the user linked over the internet to remote computing resources.  This poses potential problems when seeking to enforce patents, which are national rights.  If one can obtain claims for a system with all the features on the user-side then they are easier to enforce.  However, if the innovation is actually located remotely in the cloud, away from the user, then that may make it harder to obtain granted claims that are focussed solely on the user-side.  If only “mixed” patent claims with user-side and server-side features can be obtained, the English Court’s approach in Menashe, treating a user in the UK as “using” the remote computing resources wherever they are located, helps patent proprietors.  It means they may sue LaptopCompetitors as indirect infringers for supplying apps to Users, and may possibly sue Competitors as joint tortfeasors for use by the Users.  If/when we have the Unified Patent Court we will have to see whether its judges also take the same approach.  If they do not, infringement of many patents for computer-implemented inventions might be avoidable in Europe by placing the server outside the jurisdiction of the Unified Patent Court.

An earlier version of this article was first published by Intellectual Property Magazine.

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1Though programs for computers are excluded from patentability in Europe (see Art 52(2)(d) EPC and s1(2)(c) Patents Act 1977) it is possible to obtain patent protection for inventions that are implemented on computers using software where there is a “technical effect” (the EPO approach) or “technical contribution” (the UK approach in Aerotel [2006] EWCA Civ 1371) provided other patentability requirements are met (e.g. new, inventive and capable of industrial application).

2They are based on Articles 25 and 26 of the Community Patent Convention 1975 and other European countries have closely similar provisions.

3See Fabio Perini SpA v. LPC Group Plc & Others [2010] EWCA Civ 525

4Applied by the Court of Appeal in e.g. Sabaf v Meneghetti and MFI [2003] RPC 14.

5Mustill LJ in the Court of Appeal decision of Unilever v Gillette [1989] RPC 583, 608-609.

6Assuming knowledge of the patent is not in issue, e.g. because the Competitor is on notice of it.

72002 EWCA Civ 1702.

8s125 Patents Act 1977 implementing Article 69 EPC, where the “invention” is taken to be that specified in the claims, as interpreted by the description and drawings.

9The topic of “divided infringement” between parties currently much discussed in the US. See Akamai v Limelight and McKessen v Epic Systems 692 F.3d 1301 (decided Aug 31, 2012); discussed in “The hard cell” by R Becker & N Swartzberg, Intellectual Property magazine, Feb 2013, pgs 18-20.

10A trial Court is bound by Court of Appeal decisions.

11See Grimme v Scott [2010] EWCA Civ 1110 as interpreted in KCI Licensing v Smith & Nephew [2010] EWCA Civ 1260.

Christopher Thornham

Chris Thornham looks at practical enforcement issues in the context of cloud computing where potential acts of infringement can take place in different countries.

"Modern computing systems - and cloud computing in particular - operate without regard to national borders, with the user linked over the internet to remote computing resources. This poses potential problems when seeking to enforce patents, which are national rights."