Final Decision on Joint Infringement Standard Left to Full Court
Akamai v. Limelight (decided 12/20/1By: Eric Rutt
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What This Means to You
- Draft claims so that a single party performs all steps.
- In a method claim, minimize the number of steps required to perform the method.
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Overview
In Akamai Technologies, Inc. v. Limelight Networks, Inc., the US Court of Appeals for the Federal Circuit (Federal Circuit) has decided to take a second look at the standard for joint infringement.
This issue arises where no single actor performs every step of a method claimed in a patent. Generally, an actor will not be liable for infringing a patented method unless it performs every step of the claimed method.
There are exceptions to this rule, however. In Akamai, the Federal Circuit construed those exceptions narrowly, but has now vacated its opinion for reconsideration en banc.
Case Background
Akamai and Limelight offer competing content delivery services which improve the speed and capacity of their customers’ websites. The parties use content delivery networks (CDNs) to host numerous copies of “objects” in a webpage such as photos, movies, text boxes, etc. By locating servers around the world, CDNs bring webpage objects closer to Internet users, reducing the time it takes to load a webpage. In addition, multiple copies of objects enable websites to handle surges in Internet traffic.
Webpage objects have unique Internet addresses that enable Internet users to access objects. Moving copies of a webpage object to a CDN requires that the object’s Internet address be modified, a process known as “tagging.”
Limelight has structured its business so that customers perform the step of tagging webpage objects, and Limelight takes care of the rest.
Akamai owns a patent claiming a method of using a CDN. The claim includes four steps. Limelight performs steps 1, 3 and 4, but its customers perform step 2, the “tagging” step. Therefore, no single party performs all four steps of the claimed method.
Decision Analysis
The Federal Circuit considered whether Limelight could be held liable for infringement even though its customers performed one of the four required steps. The lower court granted judgment as a matter of law that Limelight did not infringe, and the Federal Circuit affirmed its finding.
In finding no infringement, the Federal Circuit relied on two recent cases involving joint infringement: BMC Resources, Inc. v. Paymentech, L.P from 2007 and Muniauction, Inc. v. Thomson Corp. from 2008. Those cases held that there can be no infringement unless “one party exercises control or direction over the entire process such that every step is attributable to the controlling party.”
The Federal Circuit described this control-or-direction standard as an application of agency law principles. Thus, for infringement to be found based on an agency relationship, “both parties must consent that the agent is acting on the principal’s behalf and subject to the principal’s control.” Separately, the court held that “joint infringement occurs when a party is contractually obligated to the accused infringer to perform a method step.”
Under this two-pronged standard, the court concluded that Limelight’s customers were neither acting as agents for Limelight nor contractually obligated to perform the tagging step. The fact that Limelight directed its customers to perform the tagging step did not constitute the level of control required to make the customer an agent of Limelight’s.
The contractual obligation test presented a closer question. Limelight customers were contractually required to perform the tagging step if they wished to make use of Limelight’s service. According to the Federal Circuit, this was not enough to satisfy the joint infringement test. Though tagging was required to use Limelight’s services, it was still up to the customers to decide to use those services.
In an infrequent move, however, the Federal Circuit has vacated its opinion and invited the parties to brief the question: “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?”
The court will also address the standard for joint indirect infringement (i.e., inducement and contributory infringement) in a companion en banc case, McKesson Techs., Inc. v. Epic Sys. Corp. in which a decision is likely to issue in late 2011 or early 2012.
Takeaways
It is difficult to predict whether the Federal Circuit will tighten or relax the current joint infringement standard. To be safe under either outcome, patent applicants should try to avoid the problem altogether by drafting method claims whose steps do not require more than one actor to perform them. And the fewer steps, the better.
