Federal Circuit Broadens The Standard For Direct Patent Infringement

Date: 8/20/2015
 Akamai Technologies, Inc. v. Limelight Network
 Federal Circuit Broadens The Standard For Direct Patent Infringement

In Akamai Technologies, Inc. v. Limelight Network (Fed. Cir., Aug. 2015), an en banc panel at the Federal Circuit reversed its previous decision in this long-running case finding Limelight liable as a direct infringer because the defense of divided infringement was not applicable. Direct infringement, i.e., 35 U.S.C. 271(a), requires a single entity to perform all of the steps of a method claim. Divided infringement is a defense to direct infringement because in divided infringement no single party performs all the steps of a method claim. Instead, the steps of a patented method are performed by multiple independent parties. The Federal Circuit, however, has held that there are two exceptions for when the acts of multiple parties can be considered the act of a single entity, and, hence can constitute direct infringement: i) where one party controls another party, e.g., subsidiaries or agents of the party, or ii) when a second party has a contractual or legal obligation to the first party to perform the claimed steps.

In this case, the Federal Circuit created two more exceptions for when the acts of multiple parties can be attributed to a single entity. First, if a party conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance, than that party "controls" the other, and they can be treated as a single entity for purpose of direct infringement. Second, if two or more actors form a joint enterprise, each of the actors are considered to have performed all of the acts "rendering each liable for the steps performed by the other as if each is a single actor."

Thus, the question is not whether all of the method steps are performed by a single entity, but rather can all of the method steps be attributed to a single entity. Even though the Federal Circuit previously found that all of the method steps in this case were not performed by Limelight, using their expanded definition of what it means for an act to be attributed to a single entity, the Federal Circuit now held that Limelight did perform or control all of the method steps and can be held liable for direct patent infringement.

For more information about this article, contact Joseph A. Saltiel, Vice Chair of the Intellectual Property & Technology Group, at 312.245.7500 or via e-mail at jsaltiel@masudafunai.com.