AKAMAI TECHS. INC. V. LIMELIGHT NETWORKS, INC., NOS. 2009-1372, -1380, -1416, -1417 (FED. CIR. MAY 13, 2015)

Craig R. Smith Eric P. Carnevale

In Akamai Technologies, Inc. v. Limelight Networks, Inc., the Federal Circuit reaffirmed that direct infringement of a method claim requires all steps of the asserted method to be performed by or attributed to a single entity. The Court’s ruling could preclude a finding of patent infringement, directly or indirectly, where at least one step of an asserted method is performed by a separate, unrelated entity from the defendant, such as the defendant’s customer.

Akamai’s patent is directed to “content delivery networks.” It describes a method of “mirroring” data files on multiple servers in various locations so that content can be delivered simultaneously to a large number of users without overtaxing any one server. Almost all of the steps of the asserted claims may be performed by the content delivery network provider. But at least one claim step is typically performed by the provider’s customer: tagging specific data that will be mirrored by the network.

Limelight Networks operates a content delivery network and allegedly performed almost all of the steps of the claimed method. However, Limelight required its customers to do their own tagging of data to be mirrored, and offered technical assistance to its customers regarding how to tag.

Akamai filed suit in the United States District Court for the District of Massachusetts. The district court entered judgment as a matter of law that Limelight did not infringe the patented method because no one party performed all of the claimed steps. A panel of the Federal Circuit affirmed. The Federal Circuit granted en banc review and reversed, finding that regardless of whether there was liability for direct infringement under Section 271(a), a finding of infringement could be grounded in inducement under Section 271(b).

The Supreme Court granted certiorari to decide the limited question of “[w]hether the Federal Circuit erred in holding that a defendant may be liable for inducing patent infringement under 35 U.S.C. § 271(b) even though no one has committed direct infringement under § 271(a).” Limelight Networks, Inc. v. Akamai Techs., Inc., 134 S. C 2111 (2014). The Supreme Court unanimously found there could be no liability for inducement without a direct infringer. It expressly declined to decide, however, whether there was direct infringement in this case. The case was remanded to the Federal Circuit for further consideration of that issue.

In the instant opinion by Judge Linn joined by Judge Prost, the Federal Circuit affirmed a finding of no direct infringement under Section 271(a). The Court reaffirmed its earlier precedent that liability for patent infringement requires all of the steps of a claimed method to be performed by a single entity – the so-called “single entity rule.” Akamai, No. 2009-1372, at 6-7. Where there are multiple actors, liability for direct infringement may only be found where a single entity controls, or “masterminds,” the actions of the others. Id.at 8. This does not extend liability to situations where a customer performs some steps of a claimed method, and a vendor performs the others. Id. at 21. Those situations involve “no mutual agency or cooperation [because] the parties act independently for their own benefit.” Id.

Judge Moore issued a spirited, 33-page dissent. She expressed concern that the majority’s single entity rule “vitiated broad classes of patents” and “created a gaping hole in patent infringement liability.” Akamai, No. 2009-1372, dissent at 7. Judge Moore would have applied a form of joint infringement liability, based on joint tort liability, which would reach instances where two or more parties acted in concert, or towards a common plan, design or purpose, even without an agency relationship or contractual obligation. Id. at 11. The majority rejected this approach, finding that “joint tortfeasor law and § 271 are fundamentally incompatible.” Akamai, No. 2009-1372, at 20. The majority was hesitant to expose a customer who performs only a single step of a patented method to potential joint and several liability for direct infringement under traditional joint tortfeasor principles. Id. at 23.

In Akamai, the Federal Circuit has confirmed that the “single entity rule” is the proper test for analyzing direct infringement of method claims. Thus, a defendant cannot infringe a method patent, directly or indirectly, unless all of the steps of the claimed method can be performed by, or attributed to, a single entity.