The U.S. Supreme Court Rules On Induced Infringement

On June 2, 2014, the U.S. Supreme Court issued its decision in Limelight Networks Inc. v. Akamai Technologies Inc. et al.1, holding that to prevail on a theory of patent inducement one party must be responsible for performing every step of a patent claim.

Akamai Technologies Inc. ("Akamai") is the exclusive licensee of U.S. Patent No. 6,108,703 (the "'703 patent"), claiming a method of storing and accessing Internet-based files. Akamai sued Limelight Networks Inc. ("Limelight") for patent infringement of the '703 patent in 2006. The '703 patent requires the host to "tag" the stored data. Limelight performed all the required steps of the '703 patent except for the tagging step. As a result, Akamai pursued a theory of induced infringement on the grounds that Limelight instructed users how to perform the tagging step.

A jury in the District of Massachusetts found Limelight liable for infringement and awarded Akamai $40 million. Shortly thereafter, the Court of Appeals for the Federal Circuit issued a decision in Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (2008), holding that a defendant that performed some steps of a claimed method and instructed customers to perform the remaining steps did not induce infringement because no single party performed every step of the claimed method. The Muniauction decision further explained that the single infringer requirement can be met if a single defendant "exercises 'control or discretion' over the entire process such that every step is attributable to the controlling party."2

Limelight moved for reconsideration in light of the Muniauction decision and the District Court agreed, holding that Limelight did not infringe. The Federal Circuit took up the case, ultimately affirming the District Court.3 The Federal Circuit then took up the case en banc and reversed itself, holding that a party that performs some steps of a claimed method and encourages others to carry out the remaining steps is liable for inducement under 35 U.S.C. § 271(b).4

The Supreme Court granted Limelight's request for certiorari to address "whether a defendant may be liable for inducing infringement of a patent under 35 U.S.C. § 271(b) when no one has directly infringed the patent...