Friday, 21 August 2015 16:05

Federal Circuit Broadens the Category of Divided Patent Infringement in Akamai v. Limelight

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In an unanimous decision on remand from the Supreme Court, the Federal Circuit issued its opinion in Akamai Technologies, Inc. v. Limelight Networks, Inc. (2015), which effectively broadened the category of divided patent infringement of a method claim under 35 U.S.C § 271(a), holding that when all steps of a method claim are not actually being performed by one party, but by multiple actors, all of the steps can be attributed to a single actor even where the parties are acting purely in an arms-length relationship with each other.

Prior to this decision, a method patent could be infringed under § 271(a) only when a single actor performed all of the claimed steps or if it performed some of the steps and acted through an agent or contracted with another party to perform the remaining step(s) of the claimed method such that all steps could be attributable to the controlling actor. However, two or more parties in an arms-length relationship were not deemed liable when they divided the steps among them, if a single actor was not found to exercise the requisite control or direction over the entire process. Accordingly, in Akamai (2007), the district court granted defendant Limelight’s motion for reconsideration after a jury found it liable for infringement of a method patent, and concluded that § 271(a) precluded the verdict because although the defendant Limelight performed 3 of the 4 steps, its customers had the option to perform the remaining step. The court held Limelight did not exercise the direction or control of its customers to perform the final step of the method claim and thus could not be liable. The Federal Circuit affirmed.

On remand, after the Supreme Court suggested that the Federal Circuit may have erred by too narrowly circumscribing the scope of the law, the court now “set[s] forth the law of divided infringement under … § 271(a),” holding that it will hold an single actor responsible for others’ performance of method steps in two circumstances: (1) where the actors form a joint enterprise; and (2) where an actor directs or controls others’ performance by conditioning participation in an activity or receipt of a benefit upon performance of steps and establishes the manner or timing of that performance.

Whether a single entity directed or controlled the acts of others is a question of fact, reviewable on appeal for substantial evidence when tried to a jury. Accordingly, the Federal Circuit reversed and reinstated the jury verdict of $40 million, concluding that substantial evidence did support the jury’s finding that Limelight conditioned its customer’s use of its equipment on performing the final step of the claimed method and established the manner or timing of their performance, effectively infringing the patent under the revamped § 271(a).

For the full opinion – 

http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/9-1372.Opinion.8-11-2015.1.PDF

Read 2272 times Last modified on Monday, 24 August 2015 15:29
James Ryan

Mr. Ryan earned his bachelor’s degree in Computer and Information Science from Minnesota State University and his law degree, with honors, from St. Thomas University School of Law.  Mr. Ryan is admitted to practice law in the State of Florida.