Supreme Court To Decide Whether Inducement Of Patent Infringement Requires That A Single Entity Be Liable For Direct Infringement

INTRODUCTION

The Supreme Court granted certiorari today on the question of whether inducement of patent infringement under Section 271(b) of the Patent Act requires that a single entity be liable for direct infringement.1 Limelight Networks, Inc. v. Akamai Tech., Inc., No. 12-786 (Jan. 10, 2014). The Court's decision on that issue may substantially impact the ability of patent owners in many cases to establish liability for infringement of method claims.

BACKGROUND

Frequently, several entities collectively perform all the steps of a method claim, but no single entity performs every step. In such a case of "divided infringement," a patent owner currently has two potential theories of liability. First, the patent owner may assert that one entity is liable for direct infringement, because that entity directs or controls the other entities' performance of those steps that it does not perform itself.2 Often, however, this theory is not viable, because the entities have an arm's-length relationship to one another. For example, the Federal Circuit has held that a website operator that performed some steps of a claimed method and facilitated its users' performance of the remaining ones was not liable for direct infringement.3

Second, under the Federal Circuit's decision in Akamai, a patent owner may assert that one entity is liable for inducement of infringement, because that entity in some way induced the other entities to perform the steps it does not perform itself. Client Alert (Sept. 6, 2012).) To prevail on this theory, a patent owner need not establish that the accused infringer exercises direction or control over the others, because one entity can induce an act of another even if the two entities are in an arm's-length relationship. For example, a company may, in some instances, induce a customer to perform steps of a method claim simply by selling a product intended to perform those steps.4 (See our Client Alert (Sept. 6, 2012).) To prevail on this theory, a patent owner need not establish that the accused infringer exercises direction or control over the others, because one entity can induce an act of another even if the two entities are in an arm's-length relationship. For example, a company may, in some instances, induce a customer to perform steps of a method claim simply by selling a product intended to perform those steps.5

Accordingly, under the Federal Circuit's Akamai decision, a patent owner can prove inducement of infringement...