On April 30, 2014, the Supreme Court will be hearing oral argument in the case of Limelight Networks, Inc. v. Akamai Technologies. The question presented and to be decided is incredibly significant for future patent infringement cases:
Whether the Federal Circuit erred in holding that a defendant may be held liable for inducing patent infringement under 35 U.S.C. § 271(b) even though no one has committed direct infringement under § 271(a).
(See QP Report here.) As you can see from the docket report, numerous amicus briefs have been filed, demonstrating the significant interests at stake in this case. Since 2007, patent infringement law has required that all steps of a method patent be performed by a single entity for there to be infringement. A party was liable for direct infringement where it performed all steps of the method itself, and a party was liable for inducing infringement where it induced another individual actor to perform all steps of the method. Suffice it to say, this led to a gigantic loophole where one person or entity would perform the first, say, three steps of a method patent, and a final end-user would perform the last step. In the Akamai case, the Federal Circuit held for the first time that a party could induce infringement by performing some of the method steps itself, and then directing the end user to perform the final steps, if the person directing the end user was aware that there would be infringement:
Limelight would be liable for inducing infringement if the patentee could show that (1) Limelight knew of Akamai’s patent, (2) it performed all but one of the steps of the method claimed in the patent, (3) it induced the content providers to perform the final step of the claimed method, and (4) the content providers in fact performed that final step.
(Full decision here.)
While the expansion of the induced infringement standard created by the Federal Circuit in Akamai seems to make logical sense, there is concern in the industry that it will unseat settled expectations in the marketplace. This could be particularly disruptive in industries that rely heavily on method patents, such as internet technology and financial services. The argument and the subsequent decision will be much anticipated events.