In Akamai Technologies, Inc. v. Limelight Network (Fed. Cir., May 13, 2015), the Federal Circuit affirmed a finding of non-infringement based on the defense of divided infringement. Divided infringement occurs when no one party performs all the steps of a claimed process. Instead, the steps of a patented process are performed by multiple independent parties. Independent means a party that is not under control, e.g., a subsidiary, an agent, or has a contractual/legal obligation to perform the steps.
Traditionally, the Federal Circuit had held that there can be no liability for divided infringement. Direct infringement, i.e., 35 U.S.C. 271(a), requires a single entity to perform all of the steps. In divided infringement there is no single entity performing each step. And because there is no direct infringement, there can be no indirect infringement. That is, there is nobody that a person is inducing or contributing to infringe.
On the original appeal, the full panel of the Federal Circuit reconsidered its traditional rule on divided infringement and reversed an earlier finding of no infringement. Without addressing whether there was any direct infringement, the Federal Circuit held that a party that performs some of the steps of a method claim can be liable for induced infringement if it induces someone else to perform the remaining steps.
The U.S. Supreme Court reversed the Federal Circuit holding that there can be no liability for induced infringement if there is no direct infringement. If there is no direct infringement, there can be no induced infringement because there is no one who is being induced. Because the Federal Circuit did not determine whether there was any direct infringement, it remanded the case back to the Federal Circuit to make that determination.
On remand, the Federal Circuit affirmed the original district court decision of no infringement. The patent statute requires a single party to perform each and every step of a method claim. Here, the defendant did not perform every step of the method claim; nor did the defendant exercise sufficient direction or control over the third party performing the remainder of the steps. Thus, there was no direct infringement. While the Federal Circuit recognized divided infringement allows parties to circumvent patent rights by splitting the method steps between two parties, the Federal Circuit believed that it should not make new laws. Instead, Congress should amend the law to address dividend infringement.
Judge Moore wrote a vigorous dissent arguing that parties should be liable for divided infringement. In light of Judge Moore's dissent, it is possible that the Supreme Court may consider this case again or that Congress may pass a law to specifically address divided infringement. Until then, divided infringement remains a defense to patent infringement.