There Can Be No Induced Infringement in the Absence of Direct Patent Infringement

07/03/2014 / Nic S. Puechner and Glenna Gilbert

In Limelight Networks, Inc. v. Akamai Technologies, Inc., the Supreme Court held that a defendant is not liable for inducing patent infringement under 35 U.S.C. § 271(b) when no one has directly infringed a patent under § 271(a) or any other statutory provision. 

In this case, the licensee, Akamai Technologies, Inc., sought to hold Limelight Networks, Inc. liable for patent infringement on an inducement theory. Akamai claimed that because Limelight provided instructions and technical assistance to its customers regarding tagging procedures, it thereby infringed on a patent for a method of delivering electronic data using a content delivery network.

Akamai first brought the case in 2006, and the jury found that Limelight had committed infringement and awarded more than $40 million in damages. However, in the interim between that and the time the case was heard on appeal, the Federal Circuit decided on another case, Muniauction, Inc. v. Thomson Corp., in which the court held that the defendant in Muniauction was not liable for direct infringement because it did not “exercise control or direction over its customers’ performance of those steps of the patent that the defendant itself did not perform.” 

Based upon this ruling, Limelight moved for reconsideration of the earlier judgment, and the Federal Circuit eventually concluded that “a defendant that does not itself undertake all of a patent’s steps can be liable for direct infringement only ‘when there is an agency relationship between the parties who perform the method steps or when one part is contractually obligated to the other to perform the steps.’” Since Limelight did not fit into either of these categories, the Federal Circuit held that Limelight could not be held liable for direct infringement. However, the Federal Circuit decided that Limelight could be held liable under a theory of induced infringement.

The Supreme Court unanimously overturned the Federal Circuit’s decision. Now, a defendant cannot be held liable for inducing patent infringement under 35 U.S.C. § 271(b) when no party has directly infringed under § 271(a).

The court left open for future debate whether Limelight had committed direct infringement under § 271(a). Because the question before the court involved a finding of infringement under § 271(b), it declined to extend its analysis.