The U.S. Supreme Court has reversed a Federal Circuit Court of Appeals decision on induced infringement, ruling that a defendant cannot be held liable for inducing infringement under 35 U.S.C. § 271(b) when no one has directly infringed the patent under § 271(a) or any other patent law. Limelight Networks, Inc. v. Akamai Techs., Inc., No. 12-786 (U.S. June 2, 2014). Additional details about the lower court’s ruling appear in Issue 42 of this Bulletin.

Here, the party alleged to have induced infringement carried out several steps of the method patent and provided instructions and technical assistance for its customers to take the remaining steps. The Federal Circuit determined that a defendant could be liable for inducing infringement even if no one has committed direct infringement under the patent laws, “because direct infringement can exist independently of a violation of these statutory provisions.” The court relied on Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008), which would have held a defendant liable for infringement under § 271(a), if it exercised sufficient control or direction over its customers’ performance of the patent steps that the defendant did not perform.

Writing for the unanimous Court, Justice Samuel Alito noted that the alleged infringement involved a method patent and, unless a single entity completes every step of the patent, it has not been directly infringed. So ruling, the Court observed, “The Federal Circuit’s analysis fundamentally misunderstands what it means to infringe a method patent. A method patent claims a number of steps; under the Court’s case law, the patent is not infringed unless all the steps are carried out.” The Court declined an invitation to overrule the Muniauction rule, because the certiorari grant did not involve § 271(a). On remand, however, “the Federal Circuit will have the opportunity to revisit the § 271(a) question if it so chooses.”