Akamai Techs., Inc. v. Limelight Networks, Inc., Case Nos. 2009-1372, 2009-1380, 2009-1416, and 2009-1417 (May 13, 2015); Opinion by: Linn, joined by Prost; dissent by Moore; Appealed From: District Court for the District of Massachusetts, Zobel, J., on remand from the U.S. Supreme Court, 134 S.Ct. 2111 (2014).
On remand from the Supreme Court, the Federal Circuit affirmed its prior opinion that Limelight did not directly infringe the asserted method claims, holding that Limelight did not perform all of the required steps and that the record contained no basis on which to impose liability on Limelight for the actions of its customers who carried out the other steps.
In reaching this decision, the court rejected Akamai’s (and the dissent’s) argument that a single entity can directly infringe a method claim under §271(a), even where that entity does not perform all of the steps of the claim, if that entity “goes beyond loosely providing instructions and specifically tells a third party the step or steps to perform.” Akamai (and the dissent) cited joint tortfeasor principles as support.
The majority held that “direct infringement liability of a method claim under 35 U.S.C. §271(a) exists when all of the steps of the claim are performed by or attributed to a single entity—as would be the case, for example, in a principal-agent relationship, in a contractual arrangement, or in a joint enterprise.” The court stated that its rule was supported under traditional rules of vicarious liability, in which one entity can be liable for acts of another entity in circumstances of: (1) a principal-agent relationship where the actions of the agent are attributed to the principal; (2) a contractual arrangement where “a contract mandates the performance of all steps of a claimed method” and “each party to the contract is responsible for the method steps for which it bargained,” which “typically will not be present in an arms-length seller-customer relationship”; and (3) joint enterprises that meet the requirements of the Restatement of Torts §491, cmt. c.
The Federal Circuit’s opinion provides much-needed clarity to the joint infringement issue. For patent plaintiffs faced with this issue, however, the court has made clear that there can be no joint infringement where, for example, a manufacturer merely tells its customer the step or steps to perform. In manufacturer-customers scenarios, there must be a closer relationship, such as a principal-agent relationship, a contractual arrangement where the contract mandates the performance of all steps of a method claim, or a joint enterprise.