Supreme Court Hears Argument in Limelight v. Akamai

01 May 2014 IP Litigation Current Blog

The Supreme Court heard argument yesterday in Limelight Networks, Inc. v. Akamai Techs., Inc., which concerns the standard for inducing patent infringement under 35 U.S.C. 271(b).

For those who have not followed (or don’t recall) the case’s long and winding road to the Supreme Court, the plaintiff Akamai alleged infringement of method claims directed at efficient delivery of web content. Defendant Limelight maintained a network of servers and placed certain content elements on its servers, but it did not modify other content providers’ web pages itself, a step that was required by the asserted claims. Instead, it instructed is customers to carry out the modification. A jury nonetheless found that Limelight directly infringed the asserted claims. The District Court, however, granted judgment as a matter of law that Limelight could not directly infringe because it did not perform every claim step, either itself or through another acting at its direction or control. In December of 2010, a panel of the Federal Circuit affirmed. 

Akamai then sought rehearing en banc. Although Akamai had pursued its case under a theory of direct infringement, the Federal Circuit combined Akamai’s petition with another, McKesson v. Epic, which did involve a question of inducement under 271(b). In August of 2012, the en banc Court did not directly reach the issue of direct infringement under 271(a), but found Limelight liable for inducing patent infringement under 271(b) because it performed certain claim steps and induced its customers to perform the remaining step. In December of 2012, Limelight filed a petition for a writ of certiorari with the Supreme Court.[1]

This long and relatively complex procedural history made for a lively and somewhat scattered argument at the Supreme Court yesterday. The particular issue presented to the Court was “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).” On the whole, the Justices’ questions suggested that the Federal Circuit had, in their view, erred. For example, in a telling moment, Justice Scalia accused the Federal Circuit of “avoiding the text of the statute” in finding indirect liability without direct infringement, a sentiment that prompted laughter in the courtroom and with which Justice Kagan agreed. However, Justice Breyer may have made the most revealing comment of all, stating “I become very nervous about writing a rule that suddenly might lead millions of people to start suing each other.”

This is not to say that the Justices fully embraced the petitioner’s arguments either. At different points, both Chief Justice Roberts and Justice Scalia expressed deep skepticism about a rule that would allow, in Justice Scalia’s words, a defendant to “violate the patent by not having one person do all the steps,” which would be “just as effective in stealing the idea and yet there would not be a violation of the patent.” Chief Justice Roberts voiced a similar concern: “All you’ve got to do is find one step in the process and essentially outsource it … and you’ve essentially invalidated the patent.” However, the petitioner responded that a policy concern such as that would be better addressed through an act of Congress, and the Justices often returned to the fact that the direct infringement issue was not actually before Court.

Making predictions is dangerous business, but the Court seemed unlikely to affirm the Federal Circuit’s en banc decision and find that a defendant can be liable for inducing patent infringement without an act of direct infringement. However, while expressing policy concerns about the “single entity rule,” the Justices were laser focused on the fact that the direct infringement question was not before the Court. Therefore, it seems most likely that the Supreme Court will simply reverse the en banc decision regarding 271(b), and remand to the Federal Circuit to decide the question on which it granted en banc review in the first place.

[1] Akamai filed a cross-petition for cert related to the en banc Court’s decision on the 271(a) issue, asking “whether a party may be liable for infringement under either section of the patent infringement statute, 35 U.S.C. §271(a) or §271(b), where two or more entities join together to perform all of the steps of a process claim,” but the Court had not granted the petition as of yesterday’s argument.

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