Supreme Court Reinstates Induced Infringement Standard

02 June 2014 IP Litigation Current Blog

Today the Supreme Court issued its opinion in Limelight Networks, Inc. v. Akamai Techs., Inc., No. 12-786, which was previously discussed here.  In a unanimous decision authored by Justice Alito, the Supreme Court reinstated the prior standard for induced infringement under 35 U.S.C. § 271(b), holding that a party may not be liable for inducing infringement of a patent when no one actor has directly infringed the patent. 

The Court’s decision overturns the Federal Circuit’s en banc ruling that found Limelight liable for inducing patent infringement even though the performance of all the steps in claimed Akamai’s patent was not attributable to any one person.  The en banc decision was a drastic change in the Federal Circuit’s articulated standard for liability under induced infringement, which required at least one direct infringer.

Relying principally on its Aro decision and the Federal Circuit’s Muniauction decision, the Court concluded:

there has simply been no infringement of the method in which respondents have staked out [a patent] interest, because the performance of all the patent’s steps is not attributable to any one person…where there has been no direct infringement, there can be no inducement of infringement under §271(b).

The Court criticized the Federal Circuit’s decision as “depriving § 271(b) of ascertainable standards” and predicated on a “fundamental misunderstand[ing] [of] what it means to infringe a method patent.”  According to the Supreme Court, a district court following the Federal Circuit’s reasoning would not be able to ascertain when an accused infringer would be liable for inducing infringement, “requir[ing] the courts to develop two parallel bodies of infringement law: one for liability for direct infringement, and one for liability for inducement.”

Further, the Court appears to be inviting the Federal Circuit to revisit its § 271(a) direct infringement analysis in Muniauction, calling it an “important issue” that “the Federal Circuit will have the opportunity to revisit the § 271(a) question if it so chooses” on remand.

The Supreme Court’s decision in Limelight reinstates the previous standard and provides more certainty to patent holders asserting induced infringement and defendants accused of inducing infringement.

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