Plaintiff Akamai Technologies licensed a patented method of providing a Content Delivery Network (CDN) in which content is tagged by the owner of the computer network servers to reduce delivery times. Defendant Limelight Networks operates a CDN in which users “tag” the content stored on Limelight servers. Limelight does not control or direct the tagging.
Direct Infringement. For direct infringement, a person must make, use, offer to sell, sell or import the “patented invention.” 35 U.S.C. § 271(a). The patented invention is defined by all elements (or their equivalents) of each claim of the patent. Under the single actor rule adopted by the Federal Circuit, direct infringement requires all steps of a patented method to be performed by, or under the “control or direction of”, a single person -- the “mastermind”. Muniauction, Inc. v. Thompson Corp., 532 F.3d 1318 (Fed. Cir 2008);BMC Resources, Inc. v. Paymentech LP, 498 F.3d 1373 (Fed. Cir. 2007). Because the method steps are allocated between Limelight and its customers (without the required control or direction) there is no direct infringement under the single actor rule.
Inducement. Patent infringement can also arise indirectly if a person "actively induces infringement of a patent”. 35 U.S.C. § 271(b). Can liability for induced infringement exist if there is no direct infringer (where two or more entities collectively perform all of the steps of the process claim)?
In Akamai Technologies, Inc. v. Limelight Networks, Inc., 692 F.3d 1301 (Fed. Cir. 2012), the Federal Circuit said yes. The Supreme Court has now said no, reversing the Court of Appeals. Direct infringement under 35 U.S.C. § 271(a) is required to maintain a claim for induced infringement under § 271(b). The Supreme Court applied the same rule to inducement that already applied to contributory infringement. CfAro Manufacturing Co. v. Convertible Top Replacement Co., 365 U.S. 336, 341 (1961) (direct infringement is required for contributory infringement under 35 U.S.C. § 271(c)). The interests protected by the patent are simply not infringed if there is no direct infringement involving all claim elements.
In Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 526-27 (1972), no infringement existed if the invention was “made” only outside the United States. Congress amended the Patent Act to avoid the holding in Deepsouth -- liability may now arise even if the infringement included conduct outside the United States. 35 U.S.C. § 271(f)(1). Thus, Congress demonstrated it "knows precisely how" to impose liability "for inducing activity that does not itself constitute direct infringement."
"The Court should not create liability for inducement of non-infringing conduct where Congress has elected not to extend that concept."
The Single Actor Rule. The Supreme Court assumed, without deciding, that direct infringement is determined by the single actor rule. If the defendant performs some of the steps and then induces a party outside defendant’s control to perform the remaining steps, there is no liability. Only if the defendant performs, or induces a single actor to perform, all of the steps is there liability.
The anomaly that infringement liability can be avoided by dividing performance of the steps of the method claim is a result of the Federal Circuit case law requirement that all steps must be performed by a single actor for direct infringement. The Supreme Court did not decide whether direct infringement can be found when no single actor performs all of the claimed steps of the patent under 35 U.S.C. § § 271(a). The Federal Circuit can reconsider its interpretation of § 271(a) on remand "if it so chooses."