News

Understanding induced infringement in the US after Limelight v Akamai

19 November 2014

The US Supreme Court’s decision in Limelight v Akamai apparently confirms that in the US, induced infringement of a patent can only occur if the patent has been directly infringed.

Akamai Technologies Inc. was the exclusive licensee of a patent for a content delivery network (CDN) process. Limelight Networks Inc. was also operating a CDN. However, in Limelight’s CDN, one of the steps of the patented process (known as “tagging”) was done by users of the CDN rather than by Limelight itself. Therefore, although all of the steps of the patented process were being performed, they were not all being performed by the same entity, but were divided between the provider (Limelight) and users of their service.

In an earlier case, Muniauction v Thomson, the Federal Circuit found that direct infringement of a process patent can only occur if all of the steps of the patented process are performed by a single entity, or by two entities that are under a single controlling influence. Therefore, in this case, because the steps of the patent were performed by two different entities (Limelight and the users) no direct infringement had occurred.

In US patent law two types of indirect infringement are recognised, induced infringement and contributory infringement. Induced infringement occurs when a first party knowingly causes a second party to infringe a patent. Contributory infringement occurs when a seller provides a component part of a patented product that is more than just a staple article or commodity.

Initially, the Federal Circuit found that induced infringement of the Akamai patent had occurred, since even though Limelight had not performed all of the steps of the process themselves, they had induced the users to perform the missing “tagging” step.

The Supreme Court reversed this decision and found that induced infringement could not have occurred if no-one had been induced to directly infringe the patent. As the users were not infringing the patent by performing only one step of the process, no induced infringement had occurred. As stated by the Supreme Court:

“…there has simply been no infringement of the method…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 Supreme Court explained that:

“Limelight cannot be liable for inducing infringement that never came to pass.”

One of the reasons that the Supreme Court gave for this decision was that if no direct infringement was required for induced infringement, this would deprive the courts of ascertainable standards when deciding whether infringement had occurred.

The court also considered that there was nothing in the legislation to suggest that a patented process could be infringed if the steps were divided between different entities.

Following this case, it will be necessary for patent holders in the US to ensure that all of the steps of a patented process claim would be performed by a single entity (whether this is an end user or a supplier). If the steps are split between two or more different entities such as a supplier and an end user induced infringement would not occur if this case is followed.

In the UK there is no direct equivalent to US “induced infringement”. The closest equivalent is “contributory” infringement. In the UK, contributory infringement is found to have occurred if someone supplies or offers to supply, means relating to an essential element of the invention, when he knows, or it is obvious to a reasonable person in the circumstances, that those means are suitable for and are intended to put the invention into effect in the UK. Direct infringement does not need to have actually occurred for contributory infringement to take place. It is enough that the person supplying the essential means knew (or should have known) that those means were suitable for and intended for putting the invention into effect. This is in contrast with the concept of induced infringement in the US, which seems to follow only if a direct infringement has actually occured.

This case highlights fundamental differences in the concept of infringement between the UK and the US, and is very relevant to businesses operating transatlantically.

Natasha Fairbairn
Electronics, Computing and Physics Group

If you require further information on anything covered in this briefing, please contact Natasha Fairbairn (nfairbairn@withersrogers.co.uk; +44 1179 253 030) or your usual contact at the firm.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Withers & Rogers LLP, November 2014