Supreme Court Clarifies Induced Infringement Standard
By Amanda Brings
Earlier this month, in Limelight Networks, Inc. v. Akamai Technologies, Inc., a unanimous Supreme Court clarified the standard for induced patent infringement under 35 U.S.C. § 271(b). The Court held that a defendant may not be liable for inducing infringement of a method patent under 35 U.S.C. § 271(b) unless direct infringement has been committed under § 271(a). Under this standard, liability for induced infringement of a multi-step method patent can only attach when a single actor performs all the method steps. In so holding, the Court expressly rejected the Federal Circuit’s relaxed induced infringement standard, which did not require that a single actor perform all the method steps. The Court reversed the Federal Circuit’s decision that a defendant could be liable for induced infringement when it performed only some of the method steps and induced a third party to perform the remaining steps.
In Limelight, Akamai Technologies sued Limelight Networks for infringing its patent, which claimed a method of delivering electronic data using a content delivery network (CDN). Akamai operates a CDN and maintains multiple servers. Website owners contract with Akamai to deliver their websites’ content to Internet users. Akamai’s patent provides for a process known as “tagging,” wherein certain components of its customers’ websites (such as video or music files) are designated for storage on Akamai’s servers. By “tagging” files, Akamai increases the speed with which Internet users access its customers’ websites. Limelight also operates a CDN and carries out several of the steps in Akamai’s patent. Limelight, however, does not tag the components to be stored on its servers and requires its customers to perform their own “tagging.”
At issue in Limelight was whether a defendant could be liable for inducing infringement of a patent under 35 U.S.C. § 271(b) when no party had directly infringed the patent under § 271(a). The Patent Act distinguishes between direct and indirect patent infringement. Direct infringement occurs under § 271(a) when a party “makes, uses, offers to sell, or sells any patented invention” without authority. To infringe a method patent directly under § 271(a), the defendant must have performed all the steps of the method patent. By contrast, indirect infringement under § 271(b) occurs when the defendant induces a third party to infringe a patent. There can be no indirect infringement of a patent without direct infringement.
In Limelight the Court held that, because the “performance of all the patent’s steps is not attributable to any one person,” there was no direct or indirect infringement of a method claim. Limelight could not be held liable for “inducing infringement that never came to pass.” In its harsh criticism of the Federal Circuit’s decision (which had loosened the induced infringement standard by eliminating proof of a single actor), the Court stated that the lower court “fundamentally misunderstands what it means to infringe a method patent.” The Court further rejected Akamai’s argument that tort law principles and federal aiding and abetting principles warranted a finding that multiple actors could infringe a method patent.
The Court expressly declined to review the merits of the Federal Circuit’s decision in Muniauction, Inc. v. Thomson Corp., which articulated the rule that direct infringement under § 271(a) requires a single party to perform every step of the claimed method. The Court stated that the question before them concerned § 271(b), not § 271(a). Thus, until the Federal Circuit revisits Muniauction, direct infringement by a single actor serves as a prerequisite for an induced infringement claim. Further, this decision serves as a reminder to practitioners to draft precise patent claims and to be wary of method steps that are performed by third parties or multiple actors.