On August 31, 2012, the Federal Circuit, sitting en banc, loosened the requirements for proving induced infringement of method claims. In a 6-5 split decision in the cases of Akamai Tech., Inc. v. Limelight Networks, Inc. and McKesson Tech., Inc. v. Epic Systems Corp., Nos. 2009-1372, -1380, -1416, -1417 and 2010-1291 (Fed. Cir. Aug. 31, 2012), the Federal Circuit overruled its previous 2007 decision in BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1371 (Fed. Cir. 2007) and held that a defendant may be liable for inducing infringement of a method claim, even when all steps of the claim are not committed by a single entity. Maj. Op. 10. While some hailed this decision as closing what has been perceived as a loophole that allows entities to escape infringement liability under certain circumstances, others expressed concern about the potential for abuse and an expansion of liability beyond what was contemplated by Congress in 35 U.S.C. § 271.

Akamai and McKesson revolve around the question of whether a defendant may be held liable for inducing infringement when steps of a claimed method are performed by multiple actors. In Akamai, the patent involved a method for efficient delivery of web content. Maj. Op. 11. Akamai alleged both direct and induced infringement by Limelight, a company that maintains a network of servers and places some content on its servers for efficient delivery. Id. Limelight, however, does not perform all the steps of the claimed method. Limelight’s customers perform the step of modifying the content provider’s web pages by following Limelight’s instructions on how to do so. Id. The Akamai lower court held that Limelight did not infringe because Limelight’s customer, not Limelight, performed one of the steps of the claimed method. Maj. Op. 12.

Please see full alert below for more information.