The U.S. Supreme Court took a step today towards limiting patent infringement cases, at least ones involving "method" patents (i.e., ones that describe a process rather than a device, design, or other patentable subject matter).
Kinds of infringement
Patent infringement may take different forms:
- "Direct" infringement under 35 U.S.C. 271(a).
- "Inducement" of infringement under 35 U.S.C. 271(b).
- "Contributory" infringement" under 35 U.S.C. 271(c).
Patent lawyers often divide the three types into "direct" and "indirect", the latter of which includes both inducement and contributory infringement theories. A direct infringement claim does not require that the infringer realize she infringes, but an indirect claim does.
A question about inducement
The case that the U.S. Supreme Court decided today involved a claim that Limelight Networks "carries out several of the steps claimed in" an Akamai Technologies patent. (The technology related to a method for easing access to data during "peak usage" by making segments of content available on multiple servers in more than one location.) But Limelight did not perform all of the steps that the patent called for. Akamai claimed Limelight induced infringement by helping customers complete the other steps.
Trial in the district court produced a $40+ million verdict for Akamai, but the trial judge threw out the award. He ruled that you can't induce infringement (of a method patent at least) unless someone directly infringes the patent. Because neither Limelight nor its customers directly infringed the Akamai patent, the court held, the verdict could not stand.
On to the Federal Circuit
A panel of the Federal Circuit upheld the district court's judgment. Akamai petitioned for rehearing by the full court. The en banc court reversed. It concluded that liability for inducement may exist without liability for direct infringement. So long as one or more persons perform all the steps that would constitute direct infringement, the court decided, inducement infringement may occur.
The Supreme Court held that infringement by inducement does not exist unless direct infringement does also. Justice Alito wrote:
The Federal Circuit's analysis fundamentally misunderstands what it means to infringe a method patent. A method patent claims a number of steps; under this Court's case law, the patent is not infringed unless all the steps are carried out. . . . This principle follows ineluctably from what a patent is: the conferral of rights in a particulat claimed set of elements. "Each element contained in a patent claim is deemed material to defining the scope of the patented invention," Warner-Jenkinson Co. v. Hilton Davis Chemical Co., 520 U.S. 17, 29 (1997), and a patentee's rights extend only to the claimed combination of elements, and no further.
Limelight Networks, Inc. v. Akamai Technologies, Inc., No. 12-786, slip op. at 5 (U.S. June 2, 2014).
Limits on ruling
The outcome leaves open the question of what conduct counts as direct infringement. The Court assumed "without deciding", id. at 6, that the Federal Circuit's earlier decision in Miniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008), had rightly permitted liability for direct infringement so long as "a single defendant 'exercises "control or direction" over the entire process such that every step is attributable to the controlling party'", id. at 3. But "since the question on which we granted certiorari did not involve 271(a), petitioner did not address that important issue in its opening brief", but "the Federal Circuit will have the opportunity to revisit the 271(a) question if it so chooses." Id. at 10.