Akamai Techs Inc. v. Limelight Networks Inc. Federal Circuit En Banc Decision Sets New Standard for Divided Infringement

Yesterday, the en banc Federal Circuit issued an important, unanimous decision in Akamai Techs., Inc. v. Limelight Networks, Inc., expanding liability for direct infringement, and holding that a party is liable for “divided infringement” of a method claim where either (1) one party “directs or controls” another’s performance, or (2) the actors form a “joint enterprise.”

Direct infringement of a method claim under 35 U.S.C. § 271(a) occurs when all steps of the claim are performed by or attributable to a single party. When multiple actors perform the claimed steps, a single party may still be liable for direct infringement under a “divided infringement” theory if the acts of one party are attributable to another party. Two possible scenarios – each a question of fact – exist for such attribution.

First, one party directs or controls another party’s performance of certain claim steps. Second, the parties form a joint enterprise. 

Direction or Control
Historically, the Federal Circuit has held an alleged infringer liable if it acts through an agent or contracts with another party to perform one or more claim steps. In the instant case, the Federal Circuit found that an alleged infringer may also be liable if it “conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance.”

Joint Enterprise
A joint enterprise requires four elements: i) an express or implied agreement among members of the group; ii) a common purpose to be carried out by the group; iii) a community of pecuniary interest in the common purpose, among the members; and iv) an equal right to voice a direction of the enterprise, which gives an equal right of control.

Applying the new standard to the instant case, the Federal Circuit held Limelight liable for infringement, finding there was substantial evidence that Limelight directs or controls its customers’ performance of certain claim steps, such that all steps are attributable to Limelight. Limelight both conditions its customers’ use of the accused content delivery system upon the customers’ performance of certain claim steps, and establishes the manner or timing of the customers’ performance. The Court thus reinstated the jury verdict against Limelight.

The Federal Circuit noted that future cases may present other factual scenarios that warrant attributing another’s performance of method steps to a single party and instructed that “principles of attribution are to be considered in the context of the particular facts presented.”