Limelight Networks, Inc. v. Akamai Technologies, Inc., et al.

The Supreme Court Restores the Standard for Inducement

In this very significant and highly anticipated decision, the United States Supreme Court unanimously held that a defendant will not be liable for inducing infringement of method claims in a "patent under 35 U. S. C. §271(b) when no one has directly infringed the patent under §271(a) or any other statutory provision." With its decision, the Supreme Court restored the standard for proving inducement to where it was about two years ago, before the Federal Circuit's en banc holding in Akamai Technologies v. Limelight Networks, Inc., 692 F. 3d 1301 (Fed. Cir. 2012).

By way of background, prior to the en banc decision in Akamai, the Federal Circuit had repeatedly held that liability for inducement could only be found where there was an underlying act of direct infringement under 35 U.S.C.§ 271(a). It had also held that direct infringement of a method claim required that all steps of the claimed method be performed either by a single entity, or by entities in which a "mastermind" was exercising direction or control over the other(s). In Akamai, the majority of a deeply divided en banc Federal Circuit expressly overruled longstanding precedent that had held "for a party to be liable for induced infringement, some other single entity must be liable for direct infringement." In doing so, the Federal Circuit drew a distinction between liability for an act of direct infringement under 271(a), i.e., where all of the steps of the method claim are performed by a single entity, and an act of "infringement" taking place even if no party could be found liable for direct infringement under 271(a), such as where each of the steps of the method claim are performed by multiple, unrelated entities, and held that a party could be liable for inducement in this latter situation.

The unanimous Supreme Court rejected both the reasoning and holding of the Federal Circuit. First, the Supreme Court looked at its own precedent and pointed out that "our case law leaves no doubt that inducement liability may arise 'if, but only if, [there is] . . . direct infringement.'" Opinion at 5, citing Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336, 341 (1966). In a sharp rebuke, the Supreme Court stated that "[t]he Federal Circuit's analysis fundamentally misunderstands what it means to infringe a method patent." The Supreme Court continued by stating the truism that a method claim "is not infringed unless all...