Akamai And Mckesson Federal Circuit En Banc Opinion May Affect Certain Commercial And Technological Environments

On August 31, 2012, the Court of Appeals for the Federal Circuit issued its en banc decision that provides guidance for analyzing certain types of patent infringement in such complex commercial and technological environments. The Court addressed two cases in a single opinion, Akamai Technologies, Inc. v. Limelight Networks, Inc. (Case Nos. 2009-1372, -1380, -1416, -1417) and McKesson Technologies, Inc. v. Epic Systems Corp. (Case No. 2010-1291) (Akamai herein), reversing the district court rulings in both cases and remanding them for further proceedings.

The en banc opinion holds that liability for inducement of "divided" patent infringement of claimed methods/processes applies whether or not the multiple actors conducting the act of infringement have an agency relationship. Technologies involving separate entities that perform discrete and distinct steps — prominently, but by no means exclusively, Internet-driven systems and processes that utilize multiple actors (such as database facilities, network providers, and end-users) — have created a number of thorny issues for businesses, inventors, courts, and patent lawyers.

At least for the present — as the prospect of Supreme Court review remains — Akamai brings significant clarity to the issue of "divided infringement," where different entities perform different steps of a patented process or method. The Court held that a party may be liable for induced patent infringement (under 35 U.S.C. §271(b)), where the act of infringement is accomplished by a single actor, or through multiple actors having no agency or other relationship to the inducing party that would render the inducing party "vicariously" liable for direct patent infringement. The Court explicitly avoided any determination as to whether the separate actors might somehow be liable collectively for direct patent infringement (under 35 U.S.C. §271(a)).

The Akamai opinion marks a sharp turn in the Federal Circuit's development on the subject of so-called "divided infringement." For the past several years, the Federal Circuit had taken the view that, in order for there to be liability for inducing infringement of a method claim, one party must "control or direct" the performance of each of the steps required by the patent claim, as set forth in BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007). Under BMC Resources and the cases that followed it, where the allegedly infringing acts were spread among multiple actors...