Akamai and McKesson: Federal Circuit Expands the Law of Induced Infringement

On August 31, 2012, the Federal Circuit overturned its own precedent and expanded the ability of patentees to protect their intellectual property against induced infringement. In a 6-5 en banc decision in Akamai Technologies, Inc. v. Limelight Networks, Inc. (Fed. Cir. 2012) and McKesson Technologies, Inc. v. Epic Systems Corp. (Fed. Cir. 2012), the court held that “it is not necessary to prove that all the steps [of a claimed method] were committed by a single entity” to find induced infringement. Akamai overruled BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007), which held that liability for inducement requires proof that a single entity either performed every step of a claimed method or “direct[ed] or control[led]” the performance of every step of a claimed method, thus directly infringing the patent.

In Akamai, plaintiff Akamai Technologies, Inc. (“Akamai”) owned a patent claiming a method of placing some of 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 that content from those servers. Akamai sued Limelight Networks, Inc. (“Limelight”), alleging both direct and induced infringement. While Limelight maintains a network of servers and allows for efficient content delivery by placing some content on its servers, it does not modify the content provider’s web pages itself. Rather, Limelight instructs its customers on how to perform the modification step. Because no single entity performed all the steps of the claimed method, the district court granted Limelight's motion for judgment as a matter of law of noninfringement, citing BMC and Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008).

McKesson also relied on BMC and Muniauction, but on slightly different facts. There, plaintiff McKesson Information Solutions LLC (“McKesson”) owned a patent covering a method of electronic communication between healthcare providers and their patients. McKesson sued Epic Systems Corp. (“Epic”) alleging that Epic induced infringement of McKesson’s patent. Epic licenses software to healthcare organizations including an application called “MyChart,” which permits healthcare providers to communicate electronically with patients. Unlike in Akamai, Epic does not perform any steps of the patent. Instead, the steps are performed by the patients, who initiate communications, and healthcare providers, who perform the remainder of the steps. Because the patients (rather than Epic’s direct customers) performed the step of initiating the communication, the district court granted summary judgment of noninfringement.