Limelight Networks, Inc. v. Akamai Techs., Inc. - 572 U.S. 915, 134 S. Ct. 2111 (2014)

Rule:

In the context of a patent, liability for inducement must be predicated on direct infringement. This is for good reason, as the case law leaves no doubt that inducement liability may arise if, but only if, there is direct infringement.

Facts:

Respondent Massachusetts Institute of Technology was the assignee of U.S. Patent No. 6,108,703 (’703 patent) that claimed a method of delivering electronic data using a content delivery network (CDN). Respondent Akamai Technologies, Inc., was the exclusive licensee. Respondents sought to hold the petitioner Limelight Networks, Inc. liable for patent infringement on an induced infringement theory, arguing that the petitioner provider was liable because it required its customers to tag those components of their websites that it intended to store on the provider's servers, thereby infringing on the patent for a method of delivering electronic data using a content delivery network. The case was tried to a jury, which found that petitioner had committed infringement and awarded more than $40 million in damages. After the jury returned its verdict, the Federal Circuit decided Muniauction, Inc. v. Thomson Corp., 532 F. 3d 1318 (2008), whereby the appellate court held that the defendant’s method, involving bidding on financial instruments using a computer system, did not directly infringe the plaintiff’s patent. In light of Muniauction, petitioner moved for reconsideration of its earlier motion for judgment as a matter of law. 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 petitioner did not control or direct its customers’ tagging. The Federal Circuit granted en banc reversed the decision, holding that the evidence could support a judgment in respondents’ favor on a theory of induced infringement under §271(b). Petitioner sought certiorari.

Issue:

Could the petitioner be held liable for inducing infringement of a patent under 35 U.S.C.S. § 271(b), notwithstanding the fact that no one had directly infringed the patent under 35 U.S.C.S. § 271(a) or any other statutory provision?

Answer:

No.

Conclusion:

The Court held that the petitioner could not be held liable for inducing infringement under §271(b) when no one has directly infringed under §271(a) or any other statutory provision. According to the Court, liability for inducement must be predicated on direct infringement. Assuming that Muniauction's holding was correct, respondents' method has not been infringed because the performance of all of its steps was not attributable to any one person. Since direct infringement has not occurred, there can be no inducement of infringement under §271(b). The Court averred that the Federal Circuit's contrary view would deprive §271(b) of ascertainable standards and require the courts to develop two parallel bodies of infringement law. Because the question presented in the present case was clearly focused on §271(b) and presupposed that petitioner has not committed direct infringement under §271(a), the Court declined to address whether the Federal Circuit's decision in Muniauction was correct.