In a ruling that departs from prior case law, a bare majority of the Federal Circuit Court of Appeals has determined that someone who induces others to infringe a patent can be held liable to the patent holder; the court thus overturned prior inconsistent decisions holding that a single entity must be liable for direct infringement in order for a party to be liable for induced infringement under 35 U.S.C. § 271(b). Akamai Techs., Inc. v. Limelight Networks, Inc., Nos. 2009-1372, -1380, -1416, -1417; McKesson Techs., Inc. v. Epic Sys. Corp., No. 2010-1291 (Fed. Cir., decided August 31, 2012).
Akamai Technologies owns a method patent for the efficient delivery of web content. It consists of placing a content provider’s content on a set of replicated servers and modifying the content provider’s Web page to instruct Web browsers to retrieve the content from the servers. Limelight maintains a server network that allows for efficient content delivery by placing some content elements on its servers. Limelight does not modify the content providers’ Web pages but instructs customers on the steps needed to do so.
McKesson Information owns a patent for a method of electronic communication between health-care providers and patients. Epic Systems licenses its software to health-care organizations; the software includes an application that permits health-care providers to communicate electronically with patients. Epic Systems does not perform any of the patent steps; those steps are instead “divided between patients, who initiate communications, and health-care providers, who perform the remainder of the steps.”
Thus, no single “induced” entity commits all of the infringing acts or steps in either case. Finding nothing in the statute indicating that “infringement” is limited to “infringement” by a single entity, and finding that the effect on the patent holder is the same whether more than one party carries out all the steps of a method patent, the court held that while “all the steps of a claimed method must be performed in order to find induced infringement, … it is not necessary to prove that all of the steps were committed by a single entity.” The court examined tort law principles, the legislative history and carefully distinguished related cases to bolster its conclusion. Accordingly, the court reversed the district courts’ grant of motions for summary judgment and remanded for further proceedings.
The dissenting jurists complained that the majority approach “is contrary to both the Patent Act and to the Supreme Court’s longstanding precedent that ‘if there is no direct infringement of a patent there can be no contributory infringement.’” They contended that “Congress removed joint-actor patent infringement liability from the discretion of the courts” in 1952, thus “clearing away the morass of multi-actor infringement theories that were the unpredictable creature of common law.”
Commentators have noted that the ruling strengthens patent rights by allowing liability when a patent is performed by multiple unrelated parties. Critics argue that the ruling has blazed a new trail and is likely to be brought before the U.S. Supreme Court. They suggest that indirect infringement can now be found without an act of direct infringement. The majority did place some limitations on the concept, holding that “inducement gives rise to liability only if the inducement leads to actual infringement” and that the accused inducer must “act with knowledge that the induced acts constitute patent infringement.” See Law360, August 31, 2012.