Ricoh Co., Ltd. v. Quanta Computer Inc.
89 U.S.P.Q. 2d (BNA) 1577, 550 F.3d 1325, 2008 U.S. App. LEXIS 25850 (2008)
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Rule of Law:
A party may be liable for contributory patent infringement for selling a product containing a distinct component that has no substantial non-infringing use, even if the multi-component product as a whole is capable of a substantial non-infringing use.
Facts:
- Ricoh Company, Ltd. held patents ('552 and '755) for methods related to writing data onto optical discs.
- Quanta Storage, Inc. (QSI) manufactured and sold optical disc drives.
- These drives were multi-functional, capable of both reading discs (a non-patented function) and writing discs.
- The drives contained specific hardware and embedded software modules to perform the writing functions.
- Ricoh alleged that these specific writing components were distinct, separable, and had no substantial use other than to perform the methods covered by Ricoh's patents.
- Quanta sold these multi-functional optical disc drives to other companies, such as NU Technology, which in turn sold them to consumers.
Procedural Posture:
- Ricoh Company, Ltd. sued Quanta Computer Inc., Quanta Storage, Inc., and others in the U.S. District Court for the Western District of Wisconsin for patent infringement.
- On Quanta's motion, the district court granted summary judgment in favor of Quanta on all claims.
- Regarding contributory infringement of the '552 and '755 patents, the district court ruled that because the accused optical disc drives as a whole were capable of a substantial non-infringing use (reading discs), Quanta was not liable under § 271(c).
- Ricoh, as appellant, appealed the district court's summary judgment rulings to the U.S. Court of Appeals for the Federal Circuit.
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Issue:
Does the sale of a multi-component product, which as a whole has a substantial non-infringing use, constitute contributory patent infringement under 35 U.S.C. § 271(c) if one of its distinct, separable components has no substantial non-infringing use other than to practice the patented method?
Opinions:
Majority - Per Curiam
Yes. A party can be liable for contributory infringement under § 271(c) for selling a product that contains a distinct component with no substantial noninfringing use, even if the product as a whole has other, noninfringing functions. The court reasoned that the purpose of the contributory infringement doctrine is to presume intent to infringe when a distributed article is 'good for nothing else' but infringement. Allowing a seller to escape liability by merely embedding an infringing component into a larger product with an additional, separable non-infringing feature would create an easy loophole in the statute. This would frustrate the intent of Congress and undermine a key purpose of indirect infringement liability, which is to provide a practical remedy against distributors rather than forcing a patentee to sue numerous individual end-users. The court distinguished precedents like Sony by noting they did not involve products with separable, distinct components that could only be used to infringe.
Dissenting - Gajarsa
No. The sale of a multi-component product does not constitute contributory infringement if the product as sold is suitable for a substantial non-infringing use, regardless of the function of its internal components. The dissent argued that the § 271(c) inquiry must focus on 'the material the accused actually sells,' which in this case is the entire optical drive, not its internal, unsold components. Because the complete drive has a substantial noninfringing use (reading discs), there can be no contributory infringement. The majority's component-level analysis improperly expands liability beyond the text of the statute, which addresses the sale of an 'article or commodity,' and contravenes Supreme Court guidance in Sony that cautions against rules that would 'block the wheels of commerce' and improperly prioritize patent rights over the public's access to multi-use technology.
Analysis:
This decision significantly clarifies the 'substantial non-infringing use' defense under § 271(c) for multi-component technology. It establishes that courts may conduct a more granular, component-level analysis rather than a holistic, product-level one. This prevents manufacturers from immunizing themselves from contributory infringement liability by simply bundling a component designed for infringement with other non-infringing features. The ruling has a major impact on manufacturers of complex devices like computers and smartphones, increasing their potential liability for specific infringing functionalities even if the overall device has many lawful uses.
