Supreme Court Limits Induced Infringement Liability—For Now

by Akin Gump Strauss Hauer & Feld LLP
Contact

On June 2, 2014, in Limelight Networks, Inc. v. Akamai Technologies, Inc., et al., No. 12-786, the Supreme Court unanimously rejected the Federal Circuit’s conclusion that a defendant can be liable for inducing infringement of a patent under Section 271(b) of the Patent Act where no one has directly infringed that patent. The Court (Alito, J.) held that induced infringement must be predicated on a finding of direct infringement and that, under the Federal Circuit’s prevailing interpretation of Section 271(a), a method patent could not be infringed unless a single entity performed each step. The Court assumed without deciding the direct-infringement question under Section 271(a).

Background

In Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318, 1329 (2008), the Federal Circuit held that “where the actions of multiple parties combine to perform every step of a claimed method, the claim is directly infringed only if one party exercises ‘control or direction’ over the entire process such that every step is attributable to the controlling party.”

In Limelight, respondents sued Limelight for directly infringing a method patent by practicing some elements of the patent itself and leaving its customers to perform the remainder. Relying on Muniauction, a district court dismissed the respondents’ claim because Limelight did not itself perform each element of the claimed method. A panel of the Federal Circuit affirmed.

The en banc Federal Circuit then reversed the panel’s decision, holding that Limelight instead could be held liable for induced patent infringement under Section 271(b) because induced infringement liability arises “when a defendant carries out some steps constituting a method patent and encourages others to carry out the remaining steps — even if no one would be liable as a direct infringer” under Section 271(a).

No Induced Infringement Without Direct Infringement

The Supreme Court rejected that conception of induced infringement liability. The Court reasoned that such a rule would “deprive Section 271(b) of ascertainable standards” by making it impossible for courts to assess when a patent holder’s rights have been invaded and “would require the courts to develop two parallel bodies of infringement law: one for liability for direct infringement, and one for liability for inducement.” Assuming without deciding that the Muniauction standard for direct infringement was correct, the Court held that the lack of any direct infringement under Section 271(a) precluded a finding of induced infringement under Section 271(b).

The Court reversed the Federal Circuit’s judgment and remanded the case, noting that the Federal Circuit would then be free to revisit its interpretation of Section 271(a) if it so chose.

Practice Tips

The Federal Circuit may well revisit the question of direct infringement liability under Section 271(a) in an appropriate case at a later date. But unless and until it does, Limelight will make succeeding on infringement claims in method patent cases more difficult where multiple entities are involved. After Limelight, a patent holder must show not only that a would-be defendant induced a third party’s conduct under Section 271(b), but also that the third party’s actions would constitute direct infringement of the patented method under Section 271(a).

The Supreme Court’s decision is particularly important for network-based industries, where a company may be targeted for an infringement suit based on conduct involving third parties outside of its control. Akin Gump filed an amicus brief in Limelight on behalf of a non-profit wireless communications industry association urging the Court’s holding.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Akin Gump Strauss Hauer & Feld LLP | Attorney Advertising

Written by:

Akin Gump Strauss Hauer & Feld LLP
Contact
more
less

Akin Gump Strauss Hauer & Feld LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.