The US Supreme Court has unanimously ruled that a defendant cannot be liable for inducement of infringement of a method claim where there is no direct infringement, i.e. where no single party has carried out all the steps of the claimed method (Limelight Networks, Inc., Petitioner vs Akamai Technologies, Inc., et al. No. 12-786).
Massachusetts Institute of Technology’s patent (US 6,108,703) claims a method of delivering electronic data using a content delivery network, and was exclusively licensed to Akamai Technologies, Inc. The Federal Circuit previously concluded that Limelight induced infringement by performing some of the steps of the claimed method and encouraging others to carry out the remaining steps. Specifically, Limelight performed most of the steps of the claimed method and provided instructions and technical assistance to its customers to perform one of the steps of the claimed method – tagging components to store on Limelight’s servers. However, the Supreme Court has now overturned this decision and concluded that liability for inducement requires there to have been a direct infringement since a party cannot be liable for inducing infringement if a direct infringement did not occur.
This Decision explicitly does not address the Federals Circuit’s current standard for direct infringement of a method claim (Muniauction, Inc. vs Thompson Corp., 532 F.3d 1318 (Fed. Cir. 2008)), which confirms that a single party exercising control or direction over multiple parties performing some of the steps of a patented method, such that each step is attributable to the controlling party, is a direct infringer. While the US Supreme Court declined to deal with application of this standard they noted that on remand the Federal Circuit would be free to further consider the standard for direct infringement.
The US Supreme Court’s decision increases the challenge for Patentees to prove inducement in the US since they will now first be required to demonstrate that there has been a direct infringement. In an environment where Patentees in the Life Sciences area are seeking alternative claim strategies following Mayo Collaborative Services et al. vs Prometheus Laboratories, Inc. No 10-1150 and the USPTO’s subsequent guidance for determining patent-eligible subject matter (see here), this latest decision represents a further challenge. In particular, there appear to be difficulties in overcoming patent eligibility issues for certain categories of claim without creating a divided infringement issue.
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