Vicarious Liability in Patent Infringement Cases

This technical report discusses the Federal Circuit decision in CloudofChange, LLC, v. NCR Corp., focusing on the distinctions between element-based and whole-system analyses for assessing vicarious liability in patent infringement cases. The report outlines how CloudofChange asserted both direct infringement and vicarious liability theories against NCR, which were based on the use of a claimed system that required two entities: a vendor and a subscriber. The court's analysis revealed that NCR did not provide all necessary components of the accused system, leading to a critical determination regarding direct infringement. The report further explains the legal background of patent infringement theories, including direct and indirect infringement, and the implications of the ruling on future patent infringement cases. It emphasizes the importance of asserting multiple infringement theories, particularly when vicarious infringement liability is alleged, and highlights the differences in analyzing vicarious liability for system claims versus method claims.