Federal Circuit Expands The Definition Of Direct Infringement

On August 13, 2015, the en banc Federal Circuit again addressed the issue of divided infringement of a method claim and expanded the scope of direct infringement under 35 U.S.C. § 271(a) regarding situations when the steps of the patented method are performed by multiple parties. In a rare, unanimous, per curiam en banc decision, the Federal Circuit ruled again in Akamai Technologies, Inc. v. Limelight Networks, Inc. on remand from the Supreme Court, which last year held that there can be no inducement of infringement if there is no underlying act of direct infringement, which requires all steps of a claimed method to be performed by a single actor or legally attributable to a single actor. The Supreme Court did not address the standard for finding direct infringement under 35 U.S.C. § 271(a), since that issue was not presented, but invited the Federal Circuit to do so.

In addressing that issue, the Federal Circuit broadened the pool of actors who can be considered direct infringers, as well as those who can be liable for inducing infringement of a method claim. Specifically, the holding of the en banc court establishes that direct infringement can be found:

"when an alleged infringer conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance," or "where two or more actors form a joint enterprise, all can be charged with the acts of the other, rendering each liable for the steps performed by the other as if each is a single actor." Limelight Networks, slip op. at 5. This new standard is significant because it arguably alters the concept of direct infringement. Since conditioning participation may occur in a variety of ways, including through licensing and other contractual terms, this decision could have wide-ranging implications if it ultimately is upheld and followed.

In the earlier en banc Akamai decision, the Federal Circuit held an entity liable for inducement even if no one has committed an act of direct infringement under § 271(a) because, according to the Federal Circuit, indirect infringement can exist independently of a violation of the statutory provisions set forth therein related to direct infringement. Akamai Techs., Inc. v. Limelight Networks, 692 F. 3d 1301 (Fed. Cir. 2012) (en banc). The Supreme Court rejected this approach, however, holding that inducement must be tied to an underlying act of direct...