by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C.
Yesterday, the Federal Circuit issued an order in the Akamai Technologies, Inc. v. Limelight Networks, Inc. (Case. No. 2009-1372) matter granting Akamai’s petition for the Court to rehear the appeal en banc. The Federal Circuit will be revisiting the concept of joint infringement of method patents to determine who can be liable for infringement when more than one party performs the required steps of a method claim.
Issues to Be Considered by the En Banc Court
The Federal Circuit requested that the parties address one issue in this en banc consideration: “If separate entities each perform separate steps of a method claim, under what circumstances would that claim be directly infringed and to what extent would each of the parties be liable?”
Method claims, unlike apparatus or device claims, involve the performance of certain steps, often in a certain sequence. Because these steps can occur at different times, more than one actor or entity potentially can perform the steps. Direct infringement requires that a single actor or entity perform all of the steps, so it would appear an easy way to avoid infringement is to simply have more than one person or entity perform the steps. Joint infringement is a doctrine that addresses the unfairness of having a single entity simply contract out steps of the method to avoid liability.
Previous decisions of the Federal Circuit (such as Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318) held that simply providing instructions to another was not enough to create liability. There has to be direction and control sufficient to impose vicarious liability on the party giving the instructions.
In the original Akamai panel decision, the Federal Circuit confirmed that joint infringement only exists when “there is an agency relationship between the parties who perform the method steps or when one party is contractually obligated to the other to perform the steps.” 629 F.3d 1311, 1320.
The en banc decision will shed light on the correct standard for joint infringement of a method claim, which will be extremely important going forward for both patent drafters and competitors in the marketplace. The Federal Circuit will presumably answer to what extent a person can be held liable for infringement in a variety of situations.
- When can giving another instructions that cause infringement create liability?
- What kind of contractual or legal relationship between the parties must exist for joint infringement to be possible?
- Does the “mastermind” have to have knowledge of the patent or infringement?
- Does it matter if either party to the joint infringement receives some additional benefit for performing a step?
Regardless of the outcome of this case, as a matter of prudent practice, patent practitioners should be careful in drafting method claims to avoid the multi-actor problem that joint infringement is meant to address. In most circumstances, a patent can be carefully drafted so that only one actor is needed to perform all of the steps. By doing so, the prudent patent drafter can altogether avoid the problem of joint infringement.
Case History
The underlying case involved a method Akamai patented for providing a scalable solution to hosting web content on multiple servers to increase the ability of a web site to handle large traffic. The system allowed a content provider to outsource the storage and delivery of discrete portions of its website content. To utilize this method, a content provider must tag certain portions of its website.
Limelight is a competitor of Akamai’s and offered similar capabilities to its customers. While it did not perform all of the steps found in Akamai’s patent, it contractually required its customers to perform several of these steps. Thus, the issue was whether Limelight and its customers together infringed Akamai’s patent.
Initially, the jury found that there was joint infringement and returned a $41.5 million verdict in favor of Akamai. The District Court granted Limelight’s JMOL of noninfringement and threw out the jury’s verdict in light of the Muniauction case. The Federal Circuit originally upheld the District Court in a unanimous decision, finding that there was no proof that Limelight’s customers were agent of Limelight and contractually required to perform certain steps. While Limelight provided instructions on how to use the system and contractually required its customers to act in certain ways if they wanted to use the system, the customers were acting on their own behalf and were not obligated to do anything if they did not want to use Limelight’s services. The Court found this to be “arms-length cooperation” and not an agency relationship.
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“While it did not perform all of the steps found in Akamai’s patent, it contractually required its customers to perform several of these steps.”
There was no contractual obligation or the case wouldn’t have been ruled in Limelight’s favor in Dec, 2010.
I suppose it depends on what we mean by “contractual obligation.” The Court said, “customers are provided instructions on use of the service and are required to perform some steps of the claimed method to take advantage of that service. . . . The form contract does not obligate Limelight’s customers to perform any of the method steps. It merely explains that the customer will have to perform the steps if it decides to take advantage of Limelight’s service.”
You are right that Limelight did not contract out to its customers to perform the steps on Limelight’s behalf (an agency relationship). However, it did state in its contracts that if the customers wanted to use certain features, they were required to perform certain steps (a direction relationship). The question facing the Federal Circuit now is whether that is enough to find joint infringement.
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