On August 13 2015 the Federal Circuit, sitting en banc, issued a unanimous decision setting forth new law on when performance of a method claim by multiple parties constitutes direct infringement under 35 USC § 271(a).
Akamai Technologies Inc owned a patent covering a method for efficiently delivering web content by, among other things, placing 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 Networks Inc maintained a network of servers and similarly allowed for efficient content delivery by placing some content elements on its servers and instructing its customers to modify their web pages, rather than Limelight itself modifying the content provider's web pages. Thus, neither Limelight nor its customers individually performed all steps of the patented method.
Akamai first sued Limelight on September 5 2006. In 2008 a jury trial found Limelight liable for patent infringement. However, the US District Court for the District of Massachusetts entered judgment post-verdict holding that Limelight had not infringed Akamai's patent.(1)
On appeal to the Federal Circuit, a panel first affirmed the trial court, holding that there can be joint infringement only when there is an agency relationship between the parties that perform the method steps or a contractual relationship between the parties.(2) However, on August 31 2012 the Federal Circuit reheard the case en banc and reversed the prior panel decision, holding that there could be liability for inducing infringement under 35 USC § 271(b) without the need to show direct infringement under 35 USC § 271(a) as a predicate.(3)
On June 2 2014 the Supreme Court reversed the Federal Circuit's decision, holding that Limelight's conduct did not amount to inducing infringement because there was no finding of direct infringement, as required by binding precedent.(4) The Supreme Court declined to review the merits of the Federal Circuit's prior decision in Muniauction Inc v Thomson Corp(5) that there can be no direct infringement unless one defendant actually performed all the claimed method steps or directed or controlled others that performed them, noting that on remand "the Federal Circuit will have the opportunity to revisit the Section 271(a) question if it so chooses".
Following remand to the Federal Circuit, a divided panel issued a decision on May 13 2015 holding that there was no direct infringement by Limelight under 35 USC § 271(a).(6) The basis of the decision was that Limelight did not perform all steps of the claimed method and the practice of all steps could not be attributed to Limelight because the case did not involve agency, contract or joint enterprise.
Akamai petitioned for rehearing en banc of that decision. The Federal Circuit granted the petition and on August 13 2015 issued its en banc opinion.
The full court vacated the panel decision, reversed the district court judgment and reinstated the jury verdict, holding that an entity will be responsible for others' performance of method steps where:
- that entity directs or controls others' performance; and
- the actors form a joint enterprise.
The full court noted in this regard that, to the extent that the prior decision in Golden Hour Data Systems Inc v emsCharts Inc(7) was inconsistent with this holding, "that aspect of Golden Hour is overruled".
Regarding the first point, the full court expressly stated that "Section 271(a) is not limited solely to principal-agent relationships, contractual arrangements, and joint enterprise, as the vacated panel decision held". Rather, the full court held that an actor is also liable for direct infringement if the alleged infringer:
- "conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method"; and
- "establishes the manner or timing of that performance".
The full court added that, insofar as its prior cases "formed the predicate for the vacated panel decision, those decisions are also overruled".
Applying these principles to the facts of the case, the court held that there was substantial evidence from which a jury could find that Limelight had directed or controlled its customers' performance of each method step such that all steps of the method were attributable to Limelight; thus, Limelight had directly infringed Akamai's patent.
Specifically, the court found that Limelight had conditioned customers' use of its content delivery network on their performance of certain tagging and serving steps and established the manner or timing of their performance. The court noted that Limelight had all customers sign a contract requiring them to provide it with all cooperation and information reasonably necessary for it to implement the content delivery service. Additionally, on completing a deal with Limelight, Limelight sent a welcome letter to customers instructing them how to use the service and noting that a technical account manager employed by it would lead the implementation of its services. Limelight also instructed users on an integration process that included the tagging step and provided engineers if the customer experienced any problems. If customers did not follow these steps, Limelight's service would be unavailable.
The en banc court concluded that Akamai presented substantial evidence from which a jury could find that Limelight had directly infringed Akamai's patent.
Apart from the full court remanding to the three-member appellate panel for resolution of remaining issues, it will be interesting to see whether this en banc decision is the conclusive appellate word on the case. It will also be interesting to see the ramifications of the case as its holding is applied to other fact patterns in the future.
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(1) Akamai Technologies Inc v Limelight Networks Inc, 614 F Supp 2d 90 (D Mass 2009).
(2) Akamai Technologies, 629 F 3d 1311 (Fed Cir 2010).
(3) Akamai Technologies, 692 F 3d 1301 (Fed Cir 2012 en banc).
(4) Limelight Networks Inc v Akamai Technologies Inc, 134 S Ct 2111 (2014).
(5) 532 F3d 1318 (Fed Cir 2008).
(6) Akamai Technologies Inc v Limelight Networks Inc, No 2009-1372, slip op. (Fed Cir May 13 2015).
(7) 614 F3d 1367 (Fed Cir 2010).
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