DIRECT INFRINGEMENT CAN INVOLVE MORE THAN ONE ACTOR IN THE US: Akamai Techs., Inc. v. Limelight Networks, Inc., (FED. CIR. 2015) (en banc)
The Federal Circuit of the US established years ago that direct infringement of a claimed method under 35 U.S.C. §271(a) requires that all steps be performed by or attributable to a single entity, Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008).
The establishment of direct infringement is relevant not only for itself, but also because the Supreme Court decided last year, in Limelight Networks, Inc. v. Akamai Techs., Inc., 134 S. Ct. 2111 (2014), that induced infringement requires the existence of direct infringement. The Supreme Court noted that the Federal Circuit “single actor” rule for determining direct infringement from Muniauction may have been too strict and invited the Federal Circuit to revisit the issue on remand.
Following the remand, the Federal Circuit, sitting en banc, unanimously decided last month, that the single entity rule contemplates the scenario that more than one actor may be involved in the infringement. In Akamai Techs., Inc. v. Limelight Networks, Inc., Nos. 2009-1372, -1380, -1416, -1417 (Fed. Cir. Aug. 13, 2015) (en banc), the court revisited the law of divided infringement and concluded that an entity can still be liable for the performance of method steps by others in two sets of circumstances: (1) where the entity directs or controls the performance of the others, and (2) where the actors form a joint enterprise.
In 2006, Akamai sued Limelight alleging infringement of several patents including US Patent 6,108,703 (“the ’703 patent”). The ‘703 patent involves method claims for delivering content over the internet. Limelight performs each step of the method, except for a step of “tagging” content with an identifier, and a step of “serving” the tagged content, which are performed by Limelights’ customers.
The Federal Circuit considered that substantial evidence had been presented showing that Limelight directed or controlled the performance of these two method steps, in such a way that all the steps of the method are attributable to Limelight. Limelight requires its customers to sign a contract specifying the steps the customers must perform, including steps of tagging and serving. Moreover, if the customers do not follow the steps provided, Limelight’s service will not be available.
As to how to establish the two sets of circumstances mentioned above, the Federal Circuit has stated, in regards to determining where an entity directs or controls the performance of the others, that an actor would be liable for direct infringement i) if it acts through an agent or ii) if it contracts with another to perform one or more steps of the claimed method, or iii) when an alleged infringer conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance.
As for the joint enterprise circumstance, the Federal Circuit has stated that it requires proof of four elements: (1) an expressed or implied agreement between the members of the group; (2) a common purpose to be carried out by the group; (3) a community of pecuniary interest in that purpose among the members; and (4) an equal right to a voice in the direction of the enterprise, which gives an equal right of control.
While this decision represents a broadening of the scope of direct infringement in the US, it certainly does not make it any easier for patentees to prove direct infringement. Therefore, it remains an important issue during the preparation of a patent application, to foresee the implication of multiple actors in the performance of different method steps, and carefully draft the application and claims accordingly.
It is also important to keep in mind that this area of law affects many areas in the forefront of technology, and more legal developments are expected to come in the not so distant future.