In Travel Sentry Inc. v. Tropp, 877 F.3d 1370 (Fed. Cir. 2017), the U.S. Court of Appeals for the Federal Circuit shed some light on how to apply the divided infringement standard set forth in Akamai Technologies Inc. v. Limelight Networks Inc., 797 F.3d 1020 (Fed. Cir. 2015). Akamai V , as the case is called, clarified what circumstances make a single entity liable for infringement. Akamai V held that an entity may be liable for infringement if it "directs or controls" the others' actions, if the actors form a "joint enterprise," or if the entity "conditions" participation in an activity or receipt of a benefit on performance of the patented method and establishes the manner and timing of such performance. Travel Sentry discusses how to apply this last "conditions" test.

Travel Sentry Background

The patent at issue in Travel Sentry is owned by David Tropp. It consists of a method to improve an airport's system of inspecting luggage by using dual-access locks. The steps consist of:

  • Making available a combination lock for consumers, a key lock for the luggage-screening entity, or LSE, and an identification structure known to the LSE.
  • Marketing the lock such that the consumers would know that the lock can be opened by the LSE.
  • Informing the LSE that there would be an identification structure.
  • Having the LSE act pursuant to an agreement to use their provided master key to open locks, if necessary.

Both Tropp and Travel Sentry administer systems that let travelers lock checked bags and also allow the TSA to open, search, and relock the bags when necessary. Travel Sentry had an agreement with the TSA to provide security with passkeys to open locks on consumer baggage. These locks would be identified by the Travel Sentry logo. The agreement would be void if the locks or keys did not perform the intended function. Either party could terminate the contract with 30-days' notice.

After a disagreement between the parties, Travel Sentry filed suit in the U.S. District Court for the Eastern District of New York against Tropp, seeking a declaration of noninfringement. Tropp filed infringement counterclaims. The court sided with Travel Sentry, finding the company did not directly infringe any of the patent claims.

It concluded that there was no evidence that Travel Sentry "had any influence whatsoever" or "masterminded" that the TSA follow the third and fourth steps of the method under the earlier, more restrictive standard set by BMC Resources Inc. v. Paymentech LP, 498 F.3d 1373 (Fed. Cir. 2007), and Muniauction Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008), divided infringement decisions by the Federal Circuit.

It found that the TSA did not have to follow Travel Sentry's method to comply with the congressional luggage screening mandate and faced no consequences for not doing so. The court also concluded that Akamai V did not expand the scope of direct infringement.

Federal Circuit Holding

The Federal Circuit vacated the district court's decision and remanded the case. A three-judge panel found a reasonable jury could have decided that the TSA's performance of the last two claim steps was attributable to Travel Sentry. The panel also found the District Court did not properly apply the two-part "conditions" test from Akamai V . Specifically, it said the District Court mischaracterized the "activity" and "benefits" and "conditions" in the first step, and failed to acknowledge the context when considering whether Travel Sentry had established the manner or timing of the TSA's performance of the steps. The Federal Circuit expressly found that Akamai V "broadened the circumstances" in which a third party's actions can be attributed to an infringer to support a divided infringement claim, and it found that the BMC/Muniauction "mastermind" theory was no longer the only option. The panel discussed how the "conditions" test applied to the facts of Akamai V and a later case, Eli Lilly & Co. v. Teva Parenteral Medicines Inc., 845 F.3d 1357 (Fed. Cir. 2017), and then how it should be applied to the Travel Sentry dispute.

This piece is co-authored by Susmita Gadre

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