06/02/14

Limelight Networks v. Akamai Tech.: SCOTUS Finds Induced Infringement First Requires Direct Infringement


Category: Infringement  
 
 
 
By: Jesus Hernandez, Blog Editor/Contributor   
 
TitleLimelight Networks, Inc. v. Akamai Tech., Inc., No. 12-786 (June 2, 2014).
IssueThis case presents the question 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 under §271(a) or any other statutory provision.
Limelight Networks, Inc. at *1.
HoldingThe statutory text and structure and our prior case law require that we answer this question in the negative [because inducement liability may arise if, and only if, there is direct infringement].
Id. at *1 (text added).
 
 
 
Editor's Notes
For further insight, check out the Audio Brief of oral arguments in Limelight Networks v. Akamai by clicking here.
 
 
 

Procedural HistoryIn 2006, respondents sued Limelight in the United States District Court for the District of Massachusetts, claiming patent infringement. The case was tried to a jury, which found that Limelight had committed infringement and awarded more than $40 million in damages. Respondents’ victory was short-lived, however. After the jury returned its verdict, the Federal Circuit decided Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (2008). In that case the Court of Appeals rejected a claim that the defendant’s method, involving bidding on financial instruments using a computer system, directly infringed the plaintiff’s patent. […] In light of Muniauction, Limelight moved for reconsideration of its earlier motion for judgment as a matter of law, which the District Court had denied. The District Court granted the motion, concluding that Muniauction precluded a finding of direct infringement under §271(a) because infringement of the ’703 patent required tagging and Limelight does not control or direct its customers’ tagging. A panel of the Federal Circuit affirmed […] The Federal Circuit granted en banc review and reversed. The en banc court found it unnecessary to revisit its §271(a) direct infringement case law. Instead, it concluded that the “evidence could support a judgment in [respondents’] favor on a theory of induced infringement” under §271(b). 692 F. 3d 1301, 1319 (2012) (per curiam).
Limelight Networks, Inc. at *3-4.
 
 
 
 
Legal Reasoning (JUSTICE ALITO for the Court)
Background
FactsPetitioner Limelight Networks, Inc., [...] operates a CDN and carries out several of the steps claimed in the ’703 patent. But instead of tagging those components of its customers’ Web sites that it intends to store on its servers (a step included in the ’703 patent), Limelight requires its customers to do their own tagging.1 Respondents claim that Limelight “provides instructions and offers technical assistance” to its customers regarding how to tag, 629 F. 3d 1311, 1321 (CA Fed. 2010), but the record is undisputed that Limelight does not tag the components to be stored on its servers.
Limelight Networks, Inc. at *4.
Analysis: §271(b) Inducement Requires Direct Infringement
Inducement Predicated on Direct UnchallengedNeither the Federal Circuit, see 692 F. 3d, at 1308, nor respondents, […] dispute the proposition that liability for inducement must be predicated on direct infringement. This is for good reason, as our case law leaves no doubt that inducement liability may arise “if, but only if, [there is] . . . direct infringement.” Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U. S 336, 341 (1961) (emphasis deleted).[…]
Limelight Networks, Inc. at *4-5 (some internal citations omitted).
271(f)(1) and §271(b)Section 271(f)(1) reinforces our reading of §271(b). That subsection imposes liability on a party who “supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention . . . in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States” (emphasis added). As this provision illustrates, when Congress wishes to impose liability for inducing activity that does not itself constitute direct infringement, it knows precisely how to do so. The courts should not create liability for inducement of non- infringing conduct where Congress has elected not to extend that concept.
Id. at *6-7.
Deepsouth and InducementIn Deepsouth, we rejected the possibility of contributory infringement because the machines had not been assembled in the United States, and direct infringement had consequently never occurred. […]. Similarly, in this case, performance of all the claimed steps cannot be attributed to a single person, so direct infringement never occurred. Limelight cannot be liable for inducing infringement that never came to pass.
Id. at *7 (internal citations omitted).
Tort Theory Unpersuasive[T]he reason Limelight could not have induced infringement under §271(b) is not that no third party is liable for direct infringement; the problem, instead, is that no direct infringement was committed. Muniauction (which, again, we assume to be correct) instructs that a method patent is not directly infringed— and the patentee’s interest is thus not violated—unless a single actor can be held responsible for the performance of all steps of the patent. Because Limelight did not undertake all steps of the ’703 patent and cannot otherwise be held responsible for all those steps, respondents’ rights have not been violated. Unsurprisingly, respondents point us to no tort case in which liability was imposed because a defendant caused an innocent third party to undertake action that did not violate the plaintiff ’s legal rights.
Id. at *8.
Dicta on Pre-1952 patent infringement and ManiauctionAccording to respondents, their understanding of the pre-1952 doctrine casts doubt on the Muniauction rule for direct infringement under §271(a), on the ground that that rule has the indirect effect of preventing inducement liability where Congress would have wanted it. But the possibility that the Federal Circuit erred by too narrowly circumscribing the scope of §271(a) is no reason for this Court to err a second time by misconstruing §271(b) to impose liability for inducing infringement where no infringement has occurred.
Id. at *9-10.
Maniauction Holding not addressed
We granted certiorari on the following question: “Whether the Federal Circuit erred in holding that a defendant may be held liable for inducing patent infringement under 35 U. S. C. §271(b) even though no one has committed direct infringement under §271(a).” Pet. for Cert. i. The question presupposes that Limelight has not committed direct infringement under §271(a). And since the question on which we granted certiorari did not involve §271(a), petitioner did not address that important issue in its opening brief. Our decision on the §271(b) question necessitates a remand to the Federal Circuit, and on remand, the Federal Circuit will have the opportunity to revisit the §271(a) question if it so chooses.
Limelight Networks, Inc. at *10.
Conclusion
The judgment below is reversed, and the case is remanded for further proceedings consistent with this opinion.
Limelight Networks, Inc. at *11.
 
 
 
 
 
 
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