Supreme Court Rules No Liability for Induced Infringement Without Actual Infringement – Go Figure

In Limelight Networks, Inc. v. Akamai Technologies, Inc., handed down last week, the Supreme Court unanimously ruled that there can be no liability for induced patent infringement under 35 U.S.C. § 271(b) if no one has directly infringed the patent under 35 U.S.C. § 271(a). While that principle may seem self-evident, it was not so to the Federal Circuit, which is why the case was before the Supreme Court.

Respondent Akamai was the exclusive licensee of a patent claiming a method of delivering electronic data using a “content delivery network.” Akami delivers the content of its customers’ websites through Akami servers. The patent-in-suit provided for the designation of certain components of a content providers’ website be stored on Akami’s servers and accessed from those servers by individual internet users. The process of designating those components is known as “tagging.” Appellant Limelight carried out several of the steps of the claimed method, but it did not do any tagging; instead, it required it customers to do their own tagging.

Akami sued Limelight for patent infringement and prevailed with a $40 million jury award. The district court then granted JMOL, pursuant to Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008), on the grounds that Limelight did not directly infringe the patent because Limelight not only did not itself do any tagging, but it did not control or direct its customers’ tagging. A panel of the Federal Circuit affirmed the JMOL.

The Federal Circuit then reversed en banc. Incredibly, the Federal Circuit declined to analyze the case under § 271(a), but ruled that Limelight could be liable for inducement under § 271(b). It ruled that inducement liability could attach even if no one would be liable as a direct infringer under § 271(a) where the defendant neither performed all the claimed method steps nor directed or controlled others in carrying out the steps.

Judge Alito, writing for a unanimous Supreme Court, began with the elemental proposition that liability for induced infringement must be based on direct infringement. He continued that one might think that this fundamental truth would be enough to dispose of the appeal. And, it was. As Justice Alito noted, citing Warner Jenkinson, each step in the claimed method is deemed material to defining the scope of the invention, and thus, a patentee’s rights extend only to the claimed combination of elements, and nothing more. A standard for direct infringement that serves as the predicate for inducement liability under § 271(b) that differs from the standard required for direct infringement under § 271(a) would extend the patentee’s invention beyond what was actually claimed.