Maryland Intellectual Property Lawyer & Attorney : Brian Wm. Higgins : Serving Baltimore, Columbia, Frederick

• #20: Staggs v. West, No. 8:2008cv00728; filed March 20, 2008; assigned to J. Messitte

     Dayna D. Staggs, III, a Prince Georges County, MD, resident and music recording artist who, as reported by On the Record, reportedly performs and produces under the alias D'Mystro, filed this copyright infringement lawsuit against singer Kanye West ("one of the worlds biggest Hip Hop Rap artist[s]") and co-defendants Roc-A-Fella Records, LLC, Good Music Carter Administration, Shawn Carter Records, LLC, and Broadcast Music Inc. (BMI) (representing individually several defendants), for allegedly using Staggs' 1984 sound recording and composition entitled "Volume of Good Life." In particular, Staggs alleges that,

"Kanye West didn't obtain a license to use 'Volume of Good life' which has repeated melody's and uncleared vocal samples and compositional parts of sound recording with drum elements, including (45) lyrics from the original volume of good life."

     According to the complaint, the Recording Industry Association of America (RIAA) "reports that the Kayne West 'Good Life' master with mixed parts of 'Volume of Good Life' was a tremendous success, selling millions. Attaining multi-platinum status selling more then [sic] 5 million units." The Complaint goes on to allege that,

"The vulgar, sexual and racially-charged nature of the infringing master work is directly counter to Dayna D. Staggs long established public persona, utterly inconsistent with the musician, artist clean image , [sic] And harms the reputation of the Dayna D. Staggs Copyrighted Rock/Pop master work clean titled 'Volume of Good Life.'"

     Count I of the Complaint alleges copyright infringement, contributory infringement, and unfair competition in violation of the Lanham Act.  Plaintiff is seeking monetary damages, "impoundments."

     The Complaint appears to have been filed by Mr. Staggs pro se as CEO of Dayna Paryss Entertainment.

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Summary:  The Court of Appeals for the Federal Circuit clarifies the standard for assessing whether two different entities are jointly liabile for patent infringement.

     As illustrated in a post on this web site over a month ago, consider the hypothetical situation where a business performs steps A and B of a patented process, and another company performs steps C and D. Neither company would appear to be a direct infringer of a patent claim reciting steps A, B, C, and D. And as long as no one is directly infringing the claim by practicing all steps A through D, neither company should be held liable for contributory or induced infringement of the claimed process either. That's where the theory of "joint" or "divided" patent infringement liability comes into play. In BMC Resources, Inc. v. Paymentech, L.P., 2006-1503 (Fed. Cir. 2007), the Federal Circuit considered the proper standard for joint or divided infringement by multiple parties of a single claim.

     At the outset, the Federal Circuit reiterated that liability for patent infringement requires a party to make, use, sell, or offer to sell a patented invention, meaning the entire patented invention. For example, direct patent infringement requires a party to perform or use each and every step of a claimed method. When a defendant participates in or encourages infringement but does not directly infringe a patent, the normal recourse under the law is for the court to apply the standards for liability under a theory of indirect infringement. However, the court said, indirect infringement requires, as a predicate, a finding that some party amongst the accused actors has committed the entire act of direct infringement.

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Summary:  Foreign supplier of active pharmaceutical drug to U.S. applicant seeking FDA approval to market generic Lexapro® was enjoined along with the U.S. applicant based on supplier's commercial partnership with the U.S. applicant.  Case:  Forest Laboratories, Inc. v. Ivax Pharmaceuticals, Inc., 07civ1059 (Fed. Cir. 2007) (Schall, J., dissenting-in-part).

     Ivax Pharmaceuticals, Inc., submitted an Abbreviated New Drug Application (ANDA) to the FDA seeking approval to market generic tablets containing escitalopram oxalate (“EO”), the active ingredient in Lexapro®.  Forest Laboratories, Inc., which owns the patent for Lexapro®, sued Ivax under the Hatch-Waxman Act, which provides that the mere filing of an ANDA is an act of infringement.  During discovery, Forest learned that part of Ivax's ANDA submission included information provided by Mumbai-based Cipla, Ltd., Ivax's alleged EO drug supplier. Cipla was joined in the lawsuit. After the parties stipulated to infringement and the district court found the patent-at-issue not invalid nor unenforceable, it included Cipla in the injunction against Ivax.

     On appeal, the Federal Circuit agreed with the district court's decision to include Cipla:

"Here, we do not know if Cipla first approached Ivax or vice versa, but the plan to manufacture, import, market, and sell the EO products described in the ANDA was undoubtedly a cooperative venture, and Cipla was to manufacture and sell infringing EO products to Ivax for resale in the United States. Under the standards for inducement which we apply to 35 U.S.C. § 271(b), Cipla has therefore actively induced the acts of Ivax that will constitute direct infringement upon approval of the ANDA, and it was thus not inappropriate for the district court to include Cipla within the scope of the injunction."

     The Federal Circuit cited Allergan, Inc. v. Alcon Labs, Inc., 324 F.3d 1322 (Fed. Cir. 2003) for the notion that merely filing an ANDA is a constructive act of infringement, and may support a cause of action for induced infringement.

     The dissent asserted that the safe harbor provision of § 271(e)(1) exempted Cipla from being enjoined with Ivax; however, the majority disagreed with that conclusion, saying:

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Summary:  Although teasing about things to come, the Court of Appeals for the Federal Circuit (CAFC) adverted to, but then sidestepped, the question of whether two separate entities can jointly infringe a patent.

      If you're a patent practitioner, this issue has likely come across your radar screen at some point.  Say a business performs steps A and B of a patented process, and another company performs steps C and D.  Neither company would appear to be a direct infringer of a patent claim reciting steps A, B, C, and D.  And as long as no one is directly infringing the claim by practicing all steps A through D, neither company should be held liable for contributory or induced infringement of the claimed process either.  That's where the theory of "joint" or "divided" patent infringement liability comes into play.

     In PharmaStem Therapeutics, Inc. v. Viacell, Inc., No. 05 Civ. 1490 and 1551 (Fed. Cir. July 9, 2007) (Newman, J., dissenting), the CAFC acknowledged that the parties and the district court discussed the issue of joint infringement in the context of determining whether there was infringing conduct sufficient to serve as a predicate for a finding of contributory infringement.  Under that theory, the court said, "two related parties are both deemed liable for direct infringement of a method patent when each performs some steps of the claimed method."  However, while recognizing that the viability and scope of the joint theory of liability has been the subject of considerable debate, the CAFC said the issue was not squarely raised on appeal such that it could address the merits of the theory, leaving the liability "loophole" in tact. 

      So what about the tease mentioned above?  The CAFC pointed out that the joint liability issue has been directly appealed in another case--BMC Resources, Inc. v. Paymentech, L.P., No. 2006-1503--currently pending before the CAFC.  Perhaps, then, the bar will have some clarity soon.

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