No according to the Supreme Court’s recent decision in Limelight Networks, Inc. v. Akamai Technologies, Inc. In cases of induced patent infringement, liability is attached to the defendant because it induces others, typically its customers, to perform one or more of the steps of a patent claim required for infringement. Prior to the Supreme Court’s decision in Limelight, the Federal Circuit held that a defendant could be liable for induced infringement where the defendant was responsible for performing some steps of a patent claim while a third party was responsible for performing other steps of the patent claim. Conversely, for direct infringement, the Federal Circuit requires that all steps be performed by the defendant.
In Limelight, Massachusetts Institute of Technology was the assignee and Akamai Technologies, Inc. was the exclusive licensee of a patent that involved a method of delivering electronic data using a "content delivery network." Akamai used the patent by allowing website proprietors (content providers) to store designated components of their websites on Akamai’s servers. The process of designating the components to be stored is known as "tagging."
Limelight Networks, Inc. also operated a content delivery network and performed several steps claimed in the patent-at-issue. However, instead of tagging the designated components from the content providers itself, Limelight required its customers to do their own tagging. MIT and Akamai sued Limelight for patent infringement and a jury found Limelight liable for direct infringement.
Subsequent to the jury verdict, the Federal Circuit issued its decision in Muniauction, Inc. v. Thomson Corp., which held that if a defendant did not perform all steps of the patent, that defendant could only be liable for direct infringement if there existed an agency or contractual relationship between the defendant and the party who performed all of the steps. The Federal Circuit granted en banc review of the judgment against Limelight, but rather than reconsidering direct infringement, the Federal Circuit held that enough evidence supported a finding of induced infringement.
On appeal, the Supreme Court reversed this decision. The Court reiterated that liability for induced infringement must be predicated on direct infringement. Further, the Court clarified the Federal Circuit’s analysis of infringement of a method patent — all steps of the patent must be carried out. Because no one person had performed all steps of the patent-at-issue, there was no direct infringement and therefore, no patent rights had been violated and no induced infringement could be found. The Court noted that in other legislation Congress had taken the opportunity to impose liability for inducing activity that does not itself constitute direct infringement (i.e. Section 271(f)(1)) but specifically chose not to do so in Section 271(b).
As a result, the Court eliminated liability for induced infringement where not all the steps of a method are attributable to a single actor. The Limelight decision will make patent enforcement more difficult under induced infringement theories. Following this decision, a plaintiff will need to establish that (1) the defendant performed all claimed steps in the patents or (2) that all of the claimed steps of a patent are attributable to a single actor.
By: Kristin Shusko