On May 13, 2015, a divided Federal Circuit panel, on remand from the United States Supreme Court, affirmed a district court finding of no direct infringement under 35 U.S.C. § 271(a), because a defendant did not perform all steps of the asserted method claims, and the actions of its customers who carried out the remaining steps could not be attributed to defendant.
Akamai owns a patent covering a method for delivering web content efficiently by placing some content on a set of replicated servers and modifying the provider’s web page to instruct web browsers to retrieve content from those servers. Limelight maintains a network of servers and similarly allows for efficient content delivery by placing some content elements on its servers and instructing its customers on the steps to modify their web pages, rather than modify the content provider’s web pages itself. Thus neither Limelight not its customers individually performed all of the steps of the patented method.
In a prior August 31, 2012 decision, a sharply divided Federal Circuit, sitting en banc, issued a per curiam opinion holding that Limelight could be liable for inducing infringement of the patented method under 35 U.S.C. § 271(b) if, inter alia, Limelight performed all but one of the steps of the claimed method; Limelight’s customers performed the final step; and Limelight induced its customers to perform the final step. Akamai Technologies, Inc. v. Limelight Networks, Inc., 692 F.3d 1301 (Fed. Cir. 2012) (en banc). It was not necessary, according to the Court, to prove that all the steps were committed by a single entity in order to establish liability for inducing infringement.
On June 2, 2014, the Supreme Court issued a unanimous decision reversing the Federal Circuit’s en banc decision. The Supreme Court held that Limelight’s conduct did not amount to inducing infringement under 35 U.S.C. § 271(b), given that there was no finding of direct infringement under 35 U.S.C. § 271(a), and that binding precedent held that there can be no inducement of infringement without direct infringement. In so holding, the Supreme Court declined to review the merits of the Federal Circuit’s prior decision in Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008) – that there could be no direct infringement unless one defendant actually performed all the claimed method steps, or directed or controlled others who performed them – noting that that on remand, “the Federal Circuit will have the opportunity to revisit the § 271(a) question if it so chooses.” The Supreme Court then remanded the case to the Federal Circuit, which issued its opinion on May 13, 2015.
The Court’s Opinion
In a 2-1 panel decision, the Court held that Limelight did not directly infringe under 35 U.S.C. § 271(a). In its Opinion (written by Judge Linn, with Judge Moore joining), the Court specifically held that direct infringement of a method claim exists when all steps are either performed by a single entity, or are attributable to a single entity. Such attribution would be proper, the Court indicated, “in a principal-agent relationship, in a contractual arrangement, or in a joint enterprise.” Because it had not performed all of the steps of the asserted method claims, and because, the Court stated, the case did not involve agency, contract or joint enterprise, the Court concluded that there was no basis on which to impose liability on Limelight for direct infringement of the asserted method claims.
In so concluding, the Court considered and rejected the position of Akamai and the dissent (Judge Moore) that direct infringement under § 271(a) incorporates common law joint tortfeasor liability. The Court explained that § 271(a) only includes the principles of vicarious liability, as embodied in the single entity rule, and that to import joint tortfeasor liability would be in contravention of a matter properly left to Congress. The Court reasoned that because Congress purposefully crafted subsections (b) and (c) of
§ 271 to expressly define the only ways in which individuals not completing an infringing act under § 271(a) could nevertheless be liable, it would be improper for the court to import additional notions of tort law to supplant Congress’ determination.
The Court also felt that construing § 271(a) to include joint tortfeasor liability would lead to anomalous results. It noted that actors whose innocent actions coordinate to cause harm generally are not subject to liability at common law. The Court also expressed a concern that reading joint tortfeasor liability into § 271 could make customers more vulnerable to charges of infringement.
In his dissent, Judge Moore asserted that the majority’s interpretation of § 271(a) creates a “gaping hole” in infringement liability, whereby parties could avoid infringement simply by assigning one step in a method to be performed by an arms-length actor.