Applying US Tort Law to the Infringement of Patents by Artificial Intelligence (AI) (part 1)

Introduction

Is there a legal basis for imposing secondary liability for breach of patent? As held by the US court in the 1931 Carbice Corp of Am v Am Patents Dev Corp case ‘infringement, whether direct or contributory, is essentially a tort.’ [1] Likewise, in 1999 the Rodime PLC v Seagate Tech Inc patent case the US court held that ‘inducement requires proof that the accused infringer knowingly aided and abetted another's direct infringement of the patent.’ [2] In tort law liability attaches for civil aiding and abetting if the defendant substantially assists or encourages another’s conduct in breaching a duty to a third person. [3] In view of the many parallels between patent law and tort law, one might reasonably assume that the concept of aiding and abetting has an equally long-standing recognition on the patent side of the legal ledger. And it does. As the recent 2009 Lucent Technologies Inc v Gateway Inc case proves. Based on these tort law conditions Microsoft’s indirect liability presents a significant requirement as to the infringers action and state of mind. This is to impose on the plaintiff the duty of proving that the accused infringer, namely Microsoft, knowingly aided and abetted another's direct infringement of the patent. [4] Contrary to this, computer users were subject to strict liability. [5] Evidently, US courts find it insufficient to rely on principles provided by the US patent laws only and find tort law a supportive approach for dealing with multi-party infringements. Following this line of reasoning, this note argues that cases involving a mix of entities, such as artificial intelligence (AI) and legally recognised entities such as human beings and corporations might be resolved in a more sufficient and satisfying by way of reading their conduct in view of the principles of tort law.

Analysis of General Principles of Software Intelligence from the perspective of Tortious Liability for Acts of AI’s Master (Creator)

The roads diverged in a wood, and I -

I took the one less traveled by.

And that has made all the difference.[6]

(Robert Frost 1914)

This section argues that disputes involving patents, and entities such as AI, the SI's Master (Creator) & Internet users could be successfully resolved when employing US tort law. Following this road could provide answers to the questions whether patent law is not able to, concerning the general meaning behind the term ‘intent’ which could make all the difference with regard to the question whether or not AI's Master (Creator) should be recognized as the indirect infringer of the patent rights of others. At present, US patent law does not provide a clear answer to this question. Supposing that tort law is an attractive option. That under a particular set of circumstances involving the actions of AI, the AI's Master (Creator) and Internet users liability concerns could be resolved. Still, this study identifies issues that may arise within them that would require the US legal system to recognize AI as a dependent legal person.

There are three basic categories of torts: intentional torts, negligence, and strict liability torts that will be considered as potential legal instruments answering the questions of responsibility arising from AI conduct. [7] Following the above, the first part of this section is intended to focus on the basic principle tortuous liability for intentional acts of the AI's Master (Creator) with a special focus on common law conversion, which is an intentional tort that exposes the defendant to liability for damages in a civil lawsuit. The second part of this section is intended to focus on the basic principle tortuous liability for negligent acts of the AI's Master (Creator). The third part of this section is intended to focus on the basic legal rule called ‘res ipsa loquitur’ for acts of he AI's Master (Creator). The final, fourth part illustrates all these concepts insufficiency when answering the liability question as brought by the autonomous actions of AI.

Analysis of General Principles of Artificial Intelligence from the perspective of Tortious Liability for Conversion for Intentional Acts of AI’s Master (Creator) This section draws upon conversion - an intentional tort doctrine that exposes the defendant to liability for damages in a civil lawsuit. [8] Conversion is often defined as other interference in a person’s right to property without the owner’s consent and without lawful justification. [9] In the 2010 Dickinson v Igoni case the US court held ‘[a] conversion takes place when someone, intentionally and without authority, assumes or exercises control over personal property belonging to someone else, interfering with that person's right of possession.’ [10] It is a tort which allows the harmed party to seek legal relief. This study explores a specific context in which the analogy could be very helpful. In particular, it recognises that the traditional doctrine of conversion provides valuable insight for determining remedies when a AI type of technology infringes the existing patent rights of others. This thesis recognises that while common law principles are often mentioned in patent cases, [11] seldom, if ever, do opinions consider whether a principle developed for, e.g., common law conversion or negligence, is suitable for application to a sui generis statutory scheme such as patent law. Often the analysis consists of little more than the statement that patent law ‘infringement, whether direct or contributory, is essentially a tort’. [12] Nonetheless, some US courts have evaluated whether patent infringement and common law torts are similar enough in ways that pertain to potential vicarious patent liability to share principles that are not spelled out in the patent statute. With the ever growing importance of intangible property, such as argued previously, US patent law began to recognize a cause of action for conversion of patent rights. [13]

In the 1927 Mackay v Benjamin Franklin Realty & Holding Co case the US court held that an action for conversion was not maintainable against a builder whose architect used another architect's ideas but never had possession of his plans. Nonetheless, their message was clear ‘we are aware that an action of (…) conversion can be maintained for almost any kind of personality, including money, notes, bonds, certificates of stock, title deeds, etc., but no authority was cited and we know of none where such action has been sustained for something so intangible as an idea, not connected with physical property’. [14] This thesis fully acknowledges that in this particular case the analogy between patent infringement and physical property is not perfect. Nonetheless, it argues that the US court opened the door to protecting with tortious liability patent rules as could be seen from the future cases listed below and as supported by the commentary in one of the leading texts on tort law in the United States, the Second Restatement of the Law: Torts supports this approach:

‘It is at present the prevailing view that there can be no conversion of an ordinary debt not represented by a document, or of such intangible rights as the goodwill of a business or the names of customers. The process of extension has not, however, necessarily terminated; and nothing that is said in this Section is intended to indicate that in a proper case liability for intentional interference with some other kind of intangible rights may not be found.’ [15]

In the 1958 Thompson v Mobil Producing Co case the US court held ‘[p]ersonal property is the subject of conversion `if of a tangible nature, or if it is tangible evidence of title to intangible or real property.' [16] Courts have upheld conversion suits for all types of intangibles merged with physical documents over the years. In the 1958 Pickford Corp v De Luxe Labs case the US court upheld conversion suit for literary property inherent in motion picture film. [17] In the 1926 Simon v Reilly case the US court upheld conversion suit for bonds. [18] In the 1931 Iavazzo v RI Hosp Trust Co case the US court upheld conversion suit for savings bank books. [19] However, as held by the US court in the Thompson v Mobil Producing Co case it is important to notice, that conversion can be recognised only with relation to an intangible property that is merged, or identified with, some document. [20] An intangible is merged in a document when, by the appropriate rule of law, the right to the immediate possession of a chattel and the power to acquire such possession is represented by the document, or when an intangible obligation is represented by the document, which is regarded as equivalent to the obligation. [21] Based on this interpretation, this note argues that potential plaintiff would have to prove that he/she has the right of ownership or possession over the patent. This could be established in a variety of ways as for example, he/she could provide a document, issued, upon patent application, by the USPTO. He/she would have to claim that this document confers an intangible right and that there has been conversion of such document amounting to conversion of the right. [22]

There are more modern cases supporting addressing a claim relating to conversion of patent rights. In the 1993 Miles Inc v Scripps Clinic & Research Foundation case the US court noted ‘it is not uncommon for a person to have an intangible property right without a cause of action in conversion to protect that right.’ [23] Likewise, in the University of Colorado Found v American Cyanamid patent infringement case brought by the University of Colorado and two professors against American Cyanamid the plaintiffs alleged Cyanamid was liable for conversion by virtue of having ‘intentionally exercised dominion and control over Plaintiffs' invention by filing a patent application’ and of having ‘wrongfully deprived Plaintiffs of Plaintiffs' right to control the invention by denying Plaintiffs the opportunity to license or otherwise exploit the invention.’ [24] Both plaintiffs and Cyanamid maintained as a matter of law they were entitled to judgment on the conversion claim. [25]

In this particular case the court was unable to define the parameters of ‘personal property’ within the definition of conversion. Hence, they turned to the definition of what may be converted, as discussed by Keeton et al, where the authors recognise that initially the only subject to conversion was a tangible property that could be lost and found. [26] The court reads further that as per the Keeton et al argument, ‘the [US] courts have subsequently relaxed this rule to allow conversion of intangible property rights in the following circumstances: (1) conversion of a document in which intangible rights are merged, e.g., a promissory note, check, bond, bill of lading or stock certificate; (2) conversion of a tangible object which was highly important to the exercise of an intangible right, e.g., a savings bank book, an insurance policy, a tax receipt, account books; (3) conversion of specific rights without an accompanying conversion of anything tangible, e.g. where a corporation refuses to register a transfer of the rights of a shareholder on its books.’ [27]

As by the recent judgment of the US court in the 2003 Kasdan, Simonds, McIntyre, Epstein & Martin v World Sav & Loan Ass’n (In re Emery) [28] case to make out a conversion claim, a plaintiff would have to establish three elements:

(1) The plaintiff would have to own patent rights or has the right to possess the patent rights in question at the time of the interference; [29] (2) The defendant would have to intentionally interfere with the plaintiff's patentable invention. [30] This note follows the previous line of reasoning with regard to the tortious definition of ‘intention’ as aiding and abetting. As established by the US courts in the 2000 Weisman, Celler, Spett & Modlin v Chadbourne & Parke case and in the 1990 Lenczycki v Shearson Lehman Hutton case a claim can exist for aiding and abetting conversion if the aider-abettor has actual knowledge that the person who directly converted the plaintiff's property did not own that property. [31]

(TBC)

References

[1] Carbice Corp of Am v Am Patents Dev Corp 283 US 27, 33 (1931); (‘Infringement, whether direct or contributory, is essentially a tort, and implies invasion of some right of the patentee.’); Dowagiac Mfg Co v Minn Moline Plow Co 235 US 641, 648 (1915) (‘[T]he exclusive right conferred by the patent was property and the infringement was a tortious taking of a part of that property (…)’); see also Thomson-Houston Elec Co v Ohio Brass Co 80 F 712, 721 (6th Cir 1897) (‘An infringement of a patent is a tort analogous to trespass or trespass on the case.’).

[2] Rodime PLC v Seagate Tech Inc case the US court held that 174 F 3d I294, 1306 (Fed Cir 1999).

[3] See, for example, Dow Chemical Co v Mahlum 114 Nev 1468, 970 P 2d 98, 113 (1998).

[4] Lucent Technologies Inc v Gateway Inc 580 F 3d 1301, 1321-22 (Fed Cir 2009).

[5] Ibid.

[6] R Frost, ‘The Road not Taken’ in R Frost, Mountain Interval (Henry Holt and Company 1914).

[7] See, for example, JCP Goldberg and BC Zipursky, The Oxford Introductions to U.S. Law: Torts (Oxford University Press 2010) and MS Madden, Exploring Tort Law (Cambridge University Press 2005).

[8] See, for example, Condominium Services Inc v First Owners’ Ass’n 281 Va 561, 709 SE 2d 163 (2011); PGI Inc v Rathe Prods Inc 265 Va 334, 576 SE 2d 438 (2003); Simmons v Miller 261 Va 561, 544 SE 2d 666 (2001); Litzinger v Estate of Litzinger (In re Litzinger) 340 BR 897 (BAP 8th Cir 2006); Carver v Quality Inspection & Testing 946 P 2d 450 (Alaska 1997); Stevenson v Economy Bank of Ambridge 413 Pa 442 (Pa 1964); Kasdan, Simonds, McIntyre, Epstein & Martin v World Sav & Loan Ass’n (In re Emery) 317 F 3d 1064 (9th Cir Cal 2003); Baram v Farugia 606 F 2d 42 (3d Cir Pa 1979); Vaughn v Vaughn 146 Md App 264 (Md Ct Spec App 2002).

[9] Kremen v Cohen (n 352). See, for example, Stevenson v Economy Bank of Ambridge 413 Pa 442 (Pa 1964)

[10] Dickinson v Igoni 76 AD3d 943, 945 [2d Dept., 2010]; See also, "Conversion is an unauthorized exercise of dominion and control over" someone else's property that "interferes with and is in defiance of the superior possessory right of the owner or another person" (Miller v Marchuska 31 AD3d 949, 950 [2006] Garelick v Carmel 141 AD2d 501, 502 [2d Dept 1988])

[11] See for example the aforementioned case of Akamai Tech Inc v Limelight Networks Inc 629 F 3d 1311, 1319-20 (Fed Cir 2010).

[12] Carbice Corp of Am v Am Patents Dev Corp 283 US 27, 33 (1931); See also, BMC Resources v Paymantech LP 498 F.3d 1373, 1381 (Fed Cir 2007).

[13] Mackay v Benjamin Franklin Realty & Holding Co 288 Pa 207, 209, 135 A 613, 614, 50 ALR 1164, 1165 (1927). See also BMC Resources v Paymantech LP 498 F.3d 1373, 1381 (Fed Cir 2007) and Carbice Corp of Am v Am Patents Dev Corp 283 US 27, 33 (1931) where the US court held: ‘Infringement, whether direct or contributory, is essentially a tort, and implies invasion of some right of the patentee.’

[14] Mackay v Benjamin Franklin Realty & Holding Co 288 Pa 207, 209, 135 A 613, 614, 50 ALR 1164, 1165 (1927).

[15] Restatement (Second) of Torts.

[16] Thompson v Mobil Producing Co 163 F Supp 402, 404 (D.Mont.1958) (citing 89 CJS Trover & Conversion §§ 11 and 12 and cases there cited).

[17] Pickford Corp v De Luxe Labs Inc 169 F Supp 118, 120 (SD Cal 1958).

[18] Simon v Reilly 151 NE 884, 885 (Ill 1926).

[19] Iavazzo v RI Hosp Trust Co 155 A 407, 408 (R I 1931).

[20] Id 408.

[21] Kremen v Cohen 337 F3d 1024 (9th Cir Cal 2003).

[22] University of Colorado Found v American Cyanamid 880 F Supp 1387 (D Colo1995).

[23] Miles Inc v Scripps Clinic & Research Foundation 810 F Supp 1091, 1096 (S D Cal 1993).

[24] University of Colorado Found v American Cyanamid 880 F Supp 1387 (D Colo1995).

[25] Ibid.

[26] WP Keeton, Prosser and Keeton on the Law of Torts § 15 at 90-92 (5th ed, West Pub Co 1984) 90 as found in University of Colorado Found. v American Cyanamid 880 F Supp 1387 (D Colo1995).

[27] ibid 91.

[28] Kasdan, Simonds, McIntyre, Epstein & Martin v World Sav & Loan Ass’n (In re Emery) 317 F 3d 1064 (9th Cir Cal 2003).

[29] Conversion of personal property 18 Am. Jur 2d Conversion §§ 75-7 <www.jestthefacts.info/lawnotes/conversionresearch.pdf> accessed 10 July 2017; For more see, Re 604 Columbus Ave Realty Trust (1992, CA1 Mass) 968 F2d 1332, CCH Bankr L Rptr 74697.

[30] 4 ALR 1192; 95 ALR 608; Jensen v Chicago & W I R Co 94 Ill App 3d 915, 50 Ill Dec 470, 419 NE 2d 578; Vaughn v Vaughn 146 Md App 264 (Md Ct Spec App 2002).

[31] Weisman, Celler, Spett & Modlin v Chadbourne & Parke 271 AD2d 329, 330 [2000] lv denied 95 NY2d 760 [2000]; Lenczycki v Shearson Lehman Hutton 238 AD2d 248, 248 [1997] lv dismissed and denied 91 NY2d 918 [1998]; H2O Swimwear v Lomas 164 AD2d 804, 805, 807 [1990]).