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Supreme Court Holds a Direct Infringement by Single Party is Necessary to Finding Inducement of Infringement

June 4, 2014 – In Limelight Networks, Inc. v. Akamai Technologies Inc. the Supreme Court overturned a Federal Circuit Decision wherein infringement was found against party performing all but final step of method claim and inducing another party to perform the final step of the claim.

The Supreme Court overruled the Federal Circuit and held that without direct infringement there can be no induced infringement. The alleged infringer, Limelight, practiced all of the method steps of Akamai's content delivery network patent except one. Limelight, however, provided its customers instructions on how to perform this final method step to its customers and also offered technical assistance to customers attempting to perform the step.

The Federal Circuit granted en banc review of the case and held that induced infringement was possible where one party carries out some steps of the method and encourages others to carry out the remaining steps. The Federal Circuit side stepped the doctrine that there can be no indirect infringement without direct infringement by holding, "requiring proof that there has been direct infringement…is not the same as requiring proof that a single party would be liable as a direct infringer."

The Supreme Court rejected this reasoning instead reaffirming the holding from Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336, 341 (1961), that inducement liability may arise if and only if there is direct infringement from a single party. The Court held that to adopt the Federal Courts standard would "deprive §271(b) of ascertainable standards." The Court held that such a standard, "would require the courts to develop two parallel bodies of infringement law: one for liability for direct infringement and one for liability for inducement. The opinion also hints that if the law regarding inducement infringement is to be changed, it is the job of Congress to do so; "When Congress wishes to impose liability for inducing activity that does not itself constitute direct infringement, it knows precisely how to do so…the courts should not create liability for inducement of noninfringing conduct where Congress has elected not to extend that concept."

Practice Note: In view of the holding in Limelight, the best practice of drafting method claims so that they require only one step remains. Many hoped that, after the Federal Circuit decision, there would be more flexibility in drafting method claims particularly for protecting medical diagnostic method inventions. The Supreme Court decision removes that hope. . Where one step claims are impossible, care should be taken to craft the claims as best as possible so that the steps of the method cannot be conducted by multiple parties and thus avoid all parties from liability since there is no single direct infringer.

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