Vicarious liability for direct infringement is generally limited to the scenario in which one party’s direction or control over another takes the form of a principal-agent or similar contractual relationship. “[A]bsent that agency relationship or joint enterprise, we have declined to find one party vicariously liable for another’s actions.” A gaming machine user that is directed or even encouraged, but not obligated, to perform claimed operations is an example of a customer-client relationship that does not satisfy the vicarious liability test.
Background / Facts: The asserted patents generally relate to gaming machines, such as slot machines, and claim methods for awarding a progressive prize through a bonus game that may appear in addition to the main game. The claims recite not only operations performed by the accused gaming machines but also operations performed by the users of the machines (the players), including the steps of “activating said user interface at said particular gaming machine by said player” and “making a wager.” The patentee Aristocrat contends that accused infringer IGT “controls or directs the behavior of players by providing free credits to players to induce them to gamble at IGT’s machines,” that “[t]he player’s entire gaming experience is dictated by [accused infringer] IGT’s programming of the gaming machine,” and that IGT causes the player to make a wager and activate a user interface. Thus, according to Aristocrat, the player’s actions are the “natural, ordinary, and reasonable consequences” of IGT’s conduct.
Issue(s): Whether the accused infringer exercises a level of direction or control over players playing the game that is sufficient to subject it to liability for direct infringement.
Holding(s): No. “[F]or a party to be liable for direct patent infringement under 35 U.S.C. § 271(a), that party must commit all the acts necessary to infringe the patent, either personally or vicariously.” Vicarious liability arises from one party’s direction or control over another in a principal-agent or similar contractual relationship. “[A]bsent that agency relationship or joint enterprise, we have declined to find one party vicariously liable for another’s actions.” In this case, “[w]hile providing players with free credits might encourage some people to gamble at IGT’s machines, players are not obligated to use their free credits, nor are players acting on behalf of IGT when they use their free credits on IGT’s machines.”