Intellectual Property Law: Counseling, Licensing, Litigation & Procurement

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Limelight v. Akamai

Banner & Witcoff offers the following content as a resource to help clients understand and prepare for the potential impact of this case:

Background

On April 30, 2014, in Limelight v. Akamai, the U.S. Supreme Court reviewed an en banc Federal Circuit decision holding that induced infringement involving multiple actors under 35 U.S.C. § 271(b) does not require a single entity to have directly infringed the patent under 35 U.S.C. § 271(a) (direct infringement).

35 U.S.C. § 271(b), which codifies induced infringement, states that “whoever actively induces infringement of a patent shall be liable as an infringer.” Traditionally, courts have held that induced infringement under § 271(b) requires (1) an act of knowing inducement to infringe (with knowledge of the patent); and (2) actual direct infringement of the patent as defined by § 271(a).

The Akamai patents-in-question pertain to website “content-delivery” technology. In particular, the asserted patents claim a method of rapidly delivering Internet content (e.g., streaming video) to users by rerouting embedded website objects to servers located in close proximity to the user. At the district court, Akamai alleged that Limelight induced infringement of those patented methods by providing content to its users via the claimed methods, and a district court jury subsequently awarded Akamai over $40 million in lost profits.

On appeal before the Federal Circuit, Limelight asserted there was no induced infringement because there was no direct infringement under § 271(a). Rather, Limelight claimed, no single entity practiced each of the steps of the claimed method: Limelight completed the first several steps and end users performed the last step. Accordingly, Limelight concluded, the district court’s ruling on induced infringement failed as a matter of law.

A 6-5 majority of a sharply-divided Federal Circuit rejected Limelight’s argument, holding that “it is not necessary to prove that all the steps were committed by a single entity.” Instead, § 271(a) direct infringement may be based on “acts of infringement . . . committed by an agent of an accused infringer or a party acting pursuant to the accused infringer’s direction or control.”

Leaders of the technology industry staunchly opposed the Federal Circuit decision, claiming that the court impermissibly created a new basis for patent infringement. Many have also contended that the Federal Circuit’s new rule imposes an unreasonable obligation on businesses selling otherwise non-infringing products and services, forcing them to monitor third-party end users.

Other parties, including several biotechnology firms, backed the Federal Circuit decision, asserting that the new rule closes a significant loophole. Under the new rule, they point out, parties can no longer easily evade the exclusionary rights of method patent holders by having an end user perform the final steps.

In a decision dated June 2, 2014, in the case Limelight Networks, Inc. v. Akamai Technologies, Inc. (No. 12-786), the U.S. Supreme Court held that a defendant is not liable for induced patent infringement under 35 U.S.C. § 271(b) if no one has directly infringed under 35 U.S.C. § 271(a) or any other statutory provision.

The Supreme Court reversed and remanded the case back to the Federal Circuit. Under the reasoning of the reversed Federal Circuit decision, and as explained by the Supreme Court, a defendant could be liable for inducing infringement under 35 U.S.C. § 271(b) if no one directly infringed under § 271(a) because direct infringement can exist independently of a § 271(a). The Supreme Court found that such an analysis fundamentally misunderstood method patent infringement and would deprive § 271(b) of ascertainable standards.

Important Dates

 

  • June 2, 2014 – U.S. Supreme Court issues decision
  • April 30, 2014 – U.S. Supreme Court hears oral argument
  • Jan. 10, 2014 – U.S. Supreme Court grants Limelight’s petition for a writ of certiorari
  • Dec. 10, 2013 – U.S. Solicitor General files brief
  • Feb. 1, 2013 – Akamai files cross-petition for a writ of certiorari
  • Dec. 28, 2012 – Limelight files petition for a writ of certiorari
  • Aug. 31, 2012 – Federal Circuit releases en banc decision
  • Nov. 18, 2011 – Federal Circuit hears oral argument
  • April 20, 2011 – Federal Circuit orders en banc review
  • Dec. 20, 2010 – Federal Circuit issues panel decision

Court Documents

Media

Banner & Witcoff attorneys are available to answer questions and discuss this case. Media inquiries should be directed to Amanda Robert (312) 463-5465 or arobert@staging.banner.flywheelsites.com.

Intellectual Property Law: Counseling, Licensing, Litigation & Procurement