Federal Circuit Reaffirms Single Entity Rule for Divided Infringement under Section 271(a) in Akamai, Making Method Claims Difficult to Enforce

On May 13, 2015, the Federal Circuit issued the much-anticipated decision in Akamai Technologies, Inc. v. Limelight Networks, Inc. following a remand from the Supreme Court.[1]  The Federal Circuit, in a 2-1 decision, held that “direct infringement liability of a method claim under 35 U.S.C. § 271(a) exists when all of the steps of the claim are performed by or attributed to a single entity[.]”  This is consistent with its 2008 Muniauction decision, where the Federal Circuit first made clear that “direct infringement requires a single party to perform every step of a claimed method.”[2]  The Akamai Court concluded that when “one party, acting as ‘mastermind’ exercises sufficient ‘direction or control’ over the actions of another,” the “single entity” requirement may be met and the direct infringement may be found.  Sufficient direction or control may occur in a principal-agent relationship, a contractual arrangement, or a joint enterprise.

In Akamai, the Federal Circuit found that the accused infringer, Limelight, performed some but not all steps of the asserted method claims and that Limelight’s customers conducted the remaining steps.  Further, Limelight’s customers, not Limelight, directed and controlled their performance of the steps of the asserted method claims.  The Federal Circuit concluded that neither providing a written manual explaining how to operate Limelight’s products, nor contracting out content providers would support a finding of “direction or control.”  Thus, Limelight’s customers cannot be deemed as Limelight’s agents for direct infringement analysis.

The “single entity” rule elaborated in Akamai makes it very difficult to prove infringement of method claims when more than one actor performs all of the steps of the method claims.  As Judge Moore, writing in dissent, pointed out,  “the majority’s rule creates a gaping hole in what for centuries has been recognized as actionable form of infringement.”  Many method patents, such as those involving health care, telecommunications, and other business method patents,  were drafted prior to the Muniauction decision and were not written with a single infringer in mind.  Therefore, many methods patents currently drafted with multiple actors performing the collective claim may be tough to enforce as long as the “single entity” rule applies.  However, the Akamai decision may be appealed due to the split decision and the significance of divided infringement. We will keep you posted on further developments.

 

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[1] Akamai Technologies, Inc v. Limelight Networks, Inc., No. 2009-1372, 2015 WL 2216261, __ F.3d __ (Fed. Cir. May 13, 2015).

[2] Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318, 1329 (Fed. Cir. 2008).

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Dan Liu

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