A while back, we wrote about the Supreme Court’s review of the very long patent battle between Akamai Technologies and Limelight Networks (the prior post on the Supreme Court decision is here). The Supreme Court reversed and remanded the case back to the Court of Appeals for the Federal Circuit, which issued its per curiam decision on August 13, 2015 (decision here).
M.I.T. and Akamai (as a licensee of M.I.T.) filed the patent infringement suit against Limelight back in 2006. The patent-in-suit, U.S. Patent No. 6,108.703, covers a method of storing and delivering content electronically via a “content delivery network” or “CDN” for short.
The CDN disclosed in the ‘703 patent comprises a way of designating certain components of a content provider’s website (e.g. video or music files) that are stored on servers where it can be accessed by users. The ‘703 patent refers to this step as “tagging.” The patent also discloses a way to aggregate the data demands of multiple content providers with different peak usage patterns. This aspect of the patent includes methods to serve the content from multiple servers in multiple locations so that content is delivered from servers located in the same geographic area as the users who are accessing the particular content, thus increasing the access speed.
Limelight’s accused CDN method also uses tagged data, but Limelight itself doesn’t do the tagging. Instead, Limelight requires that its customers do their own tagging. So, the Limelight case presented a dilemma of sorts. It appeared that the method covered by the ‘703 patent claims was being practiced without authorization, but not by a single actor.
As noted in Alice Juvon Abn’s February 2014 article (link here), when an accused infringer performs some, but not all of the claim steps and another party performs the remaining steps, infringement is only found if the other party is “controlled” by the accused infringer. Providing instructions to the other party for completing the steps of a patented method isn’t enough to satisfy the ‘control’ requirement under the Federal Circuit’s decision in Muniauction. For example, as Abn notes, it seems that infringement cannot be found under Muniauction where one company performs some of the patented steps and then provides instructions to its customers to perform the last step(s). In other words, under Muniauction, there is no infringement unless the ‘control’ exerted by the accused infringer amounts to an agency relationship with the other party performing the remaining steps of the claim.
That, at least in part, explains the Federal Circuit’s seemingly inconsistent ruling in Limelight (I) as compared to its ruling in Muniauction.
When the Supreme Court reviewed Limelight (I) in 2014, it didn’t mince words. The Court stated that the Federal Circuit needed reconcile its en banc decision in the Muniauction case with its decision in Limelight (I). It reversed and remanded the case to the Federal Circuit, reiterating that the single issue presented to the Court was whether infringement had occurred under an inducement theory of infringement (35 U.S.C. section 271(b)), i.e., had Limelight induced another to infringe the ‘703 patent? Under the Federal Circuit’s Muniauction standard, Limelight could not have induced another to infringe the patent because no single party had performed all of the claim steps. Since there was no direct infringement, the Supreme Court reasoned, there could be no inducement to infringe under Section 271(b) of the Patent Act.
The Supreme Court also commented on the obvious enforcement hardship that Muniauction caused for patent owners:
But the possibility that the Federal Circuit erred by too narrowly circumscribing the scope of 271(a)[the direct infringement section of the patent statute] is no reason for this Court to err a second time by misconstruing 271(b)[the inducing infringement section of the patent statute] to impose liability for inducing infringement where no infringement has occurred.
So, for all practical appearances, the Supreme Court sent the Limelight case back to the Federal Circuit so that it could fix the mess caused by the Muniauction case.
On remand, the Federal Circuit emphasized the concept of ‘attribution.’ It determined that, because Limelight directs/controls its customers, the performance of all steps of the patented claims were attributable to Limelight. The Court’s finding was based upon the arrangement that Limelight had with its customers, namely, that a customer’s ability to use the CDN is conditioned upon its agreement to tag the its content in the manner and at the times established by Limelight.
All in all, the Court tried to broaden the grounds that will support a finding of direct infringement (35 U.S.C. Section 271(a)), holding that direct infringement is not limited solely to principal-agent relationships, contractual arrangements and joint enterprises. In particular, the Court held that:
[L]iability [for direct infringement] under 271(a) can be found where an alleged infringer 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 and timing of that performance.
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