Docket No. 2009-1372, 2009-1380, 2009-1416, -2009-1417
PROST, LINN, MOORE (D)
May 13, 2015
Brief Summary: DC grant of JMOL affirmed because divided infringement under § 271(a) “only occurs when a single party or a joint enterprise performs all of the steps of the process” unless one party is the “mastermind”.
Summary: This appeal returned to the FC after remand from the USSC (Limelight, US 2014). The opinion first visits “divided infringement under § 271(a)”, explaining that “[d]irect infringement under § 271(a) requires a party to perform or use each and every step or element of a claimed method” (Warner-Jenkinson, US 1997) and, “[f]or a method patent, direct infringement only occurs when a single party or a joint enterprise performs all of the steps of the process” (Joy Techs., FC 1993). And “[e]ncouraging or instructing others to perform an act is not the same as performing the act oneself and does not result in direct infringement.” Where one “participates in or encourages but does not directly infringe a patent…liability under indirect infringement” but that “requires, as a predicate, a finding that some party is directly liable for the entire act of direct infringement” (the “single entity rule…multiple actors [can] together infringe a patent only if one control[s] the other(s)”). An exception is where one party acts as the “mastermind” exercising “sufficient ‘direction or control’ over the actions of another, the combined performance of the steps of a method claim will directly infringe under § 271(a)” (BMC Resources, FC 2007). This avoids “a situation where a party attempts to ‘avoid infringement …simply by contracting out steps of a patented process to another entity” as [i]t would be unfair indeed for the mastermind in such situations to escape liability” (“vicarious liability”). In addition, “unlike in other areas of tort law…the patentee specifically defines the boundaries of his or her exclusive rights in the claims…and provides notice thereby to the public so that it can avoid infringement” and “[a] patentee can usually structure a claim to capture infringement by a single party”. In this case, the court found “nothing to indicate Limelight’s customers are performing any of the claimed method steps as agent for Limelight, or in any other way vicariously on behalf of Limelight…[t]o the contrary, Limelight’s customers direct and control their own use of Limelight’s content delivery network” (“Limelight’s customers do not become Limelight’s agents simply because Limelight provides its customers a written manual explaining how to operate Limelight’s product.”) The FC therefore found the DC properly granted JMOL of noninfringement. It also affirmed the DC judgment of noninfringement of two other patents (previously affirmed). Judge Moore’s dissent argued “[t]he majority’s rule creates a gaping hole in what for centuries has been recognized as an actionable form of infringement…[t]he single entity rule promulgated in BMC and Muniauction is a recent judicial creation inconsistent with statute, common law, and common sense” (“Limelight performed all but one step of a patented method, and  directed its customers to perform that final step….[thereby] obtain[ing] the economic benefits of performing all of the steps….”)