Inducement With Divided Infringement After Akamai Tech. v. Limelight Networks And McKesson Tech. v. Epic Systems

As diagnostics, end-user sophistication, and mobile and web-based technologies grow, so does the likelihood that potential infringement is carried out across multiple users or entities, i.e., divided infringement. Divided infringement scenarios exist where a single entity does not perform every element of a claim, but rather different entities perform the different steps of a claim. This divided infringement scenario occurs frequently as customers begin performing critical steps in implementing technologies – for instance, a doctor performing a collection or diagnostic step or a server user modifying a webpage. The divided infringement defense has grown more popular in recent years, paralleling the rising importance of method claims used to describe cutting edge computer software, business method inventions, and diagnostic and therapeutic inventions in biotech. This is particularly relevant where companies have been able to strategically avoid claims by performing less than all steps of a method claim and having their customers or other entities perform remaining elements of the claim.

Under claims for direct infringement under §271(a) of the 1952 Patent Act (the make, use, or sell provision), divided infringement is a complete defense as infringement here follows the single-entity rule. See Warner-Jenkinson Corp. v. Hilton Davis Corp. Until last month, it was also a complete defense to inducement theories arising under §271(b).

On August 31, 2012, the Court of Appeals for the Federal Circuit abated the divided infringement defense by enabling patent holders to advance claims against divided infringers based on an inducement theory. In the combined decisions of Akamai Tech. v. Limelight Networks and McKesson Tech. v. Epic Systems Co. (Fed. Cir. 2012) (En Banc), the court ruled per curiam, six to five, that inducement as defined by 35 U.S.C. §271(b) does not require a single, direct infringer – that merely knowingly inducing the performance of each claim limitation, regardless of who is performing that limitation, is inducement under §271(b).

Two scenarios were presented to the court by the respective cases. In Akamai, the court questioned "whether a defendant may be held liable for induced infringement if the defendant has performed some of the steps of a claimed method and has induced other parties to commit the remaining steps...." In McKesson, the court decided whether a "defendant has induced other parties to collectively perform all...