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Supreme Court Holds Induced Infringement Requires Direct Infringement

June 03, 2014
Post by Blog Staff

This week the U.S. Supreme Court issued its decision in Limelight Networks, Inc. v. Akamai Technologies, concluding that an act of direct patent infringement must be present for a claim of inducement of infringement. The decision unanimously held that a defendant may not be liable for inducing infringement of a patent under 35 U.S.C. Section 27(b) when no one has directly infringed the patent under Section 271(a) or any other statutory provision.

The dispute between the parties arose over a patent assigned to the Massachusetts Institute of Technology, claiming a method of using a "content delivery network" (CDN) for the delivery of electronic data, of which Akamai is the exclusive licensee. Akamai, using a CDN, allows its clients to store on its servers certain components of their website, which are designated through a "tagging" process. Limelight also operates a CDN and carries out several steps of the patent in question, but requires their users to do their own tagging process. Initially, Akamai won the suit in District Court, however after the jury returned its verdict, the Federal Circuit decided Muniauction, Inc. v. Thomson Corp. which held that "direct infringement requires a single party to perform every step of a claimed method" but is satisfied if a single defendant exercise control or direction over the entire process. In light of this decision, Limelight moved for reconsideration of its motion for judgment as a matter of law, which the District Court then granted. The Federal Circuit granted en banc review and reversed. The Federal Circuit held that steps taken by multiple parties can result in induced infringement, but expound on its decision stating, “To be clear, we hold that all the steps of a claimed method must be performed in order to find induced infringement, but that it is not necessary to prove that all the steps were committed by a single entity.”

The Supreme Court reversed the Federal Circuit, holding that a defendant may not be liable for inducing infringement unless there is at least one underlying instance of direct infringement. The Court concluded that all of the claimed steps would have to be attributed for a single actor for direct infringement to occur under the Muniauction decision, but because Limelight did not undertake all of the steps claimed in the patent and cannot be held responsible for all those steps, there was no infringement.

The complete opinion can be found here.


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