Docket Nos. 2009-1372, 2009-1380, 2009-1416, 2009-1417
Rehearing en banc
August 13, 2015
Brief Summary: “Section 271(a) is not limited solely to principal-agent relationships, contractual arrangements, and joint enterprise, as the vacated panel decision held…Rather, to determine direct infringement, we consider whether all method steps can be attributed to a single entity.” Limelight liable for direct infringement as all steps could be attributed to it through the way it works with customers and contracts.
Summary: Akamai is the exclusive licensee of a patent related to methods for delivering electronic data using a content delivery network (CDN) that Limelight was accused of infringing. The DC found Limelight did not infringe because it carries out all but one of the claimed steps while its customers perform the remaining step (“tagging”) and Limelight does not control or direct its customers tagging. An FC panel affirmed that decision based on its subsequent 2008 Muniauction decision. After review en banc, the FC found that the “evidence could support a judgment in [respondents’] favor on a theory of induced infringement” even though “no one would be liable as a direct infringer”. Certiorari was granted and the arguments heard on April 30, 2014. The USSC disagreed with the en banc FC decision, and held that “[a] defendant is not liable for inducing infringement under §271(b) when no one has directly infringed under §271(a) or any other statutory provision.” In the present en banc decision, the FC concluded that substantial evidence supports the jury’s finding that Limelight…directly infringes…under §271(a).” “[I]n the past, [the FC has] held that an actor is liable for infringement under §271(a) if it acts through an agent (applying traditional agency principles) or contracts with another to perform one or more steps of a claimed method” (BMC, FC 2007). Here, it held “on the facts of this case, that liability can also be found 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 performance” (Cf. Metro-Goldwyn-Mayer, US 2005 (third party’s actions are attributed to the alleged infringer such that the alleged infringer becomes the single actor chargeable with direct infringement, a question of fact)). Two or more actors may also be charged with the acts of the other if it can be show a joint enterprise was formed: 1) an agreement, express or implied, among 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 equal right of control. Thus, “Section 271(a) is not limited solely to principal-agent relationships, contractual arrangements, and joint enterprise, as the vacated panel decision held…Rather, to determine direct infringement, we consider whether all method steps can be attributed to a single entity.” And it found here that all steps could be attributed to Limelight through the way it works with customers and contracts that “delineate the steps customers must perform if they use the Limelight service.” Limelight was therefore found liable for direct infringement and the case was “return[ed]…to the panel for resolution of all residual issues consistent with this opinion.”