By Ted Baroody
On remand from the U.S. Supreme Court, the Federal Circuit – en banc, today held, “on the facts of this case, that liability under § 271(a) can also be found when an alleged infringer 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.” (This unanimous opinion en banc, replaces the May 13, 2015 panel opinion.) The court articulates a two-part test to determine direct infringement of a method patent in the context of multiple actors: “(1) where that entity directs or controls others’ performance, and (2) where the actors form a joint enterprise.” The opinion expressly finds that the foregoing test is not limited solely to principal-agent relationships, contractual arrangements, and joint enterprise, and overrules prior decisions to the contrary.
The Federal Circuit further held that with respect to the specific facts of Akamai, the jury heard substantial evidence from which the jury could have concluded that the alleged infringer, Limelight, controlled its customers “tagging” of web content that would then be provided to users by Limelight. The court emphasized provisions in Limelight’s contract with its customer that in order to use Limelight’s content delivery service, the customer agreed to be “responsible” for identifying specific content, and provide “cooperation” with Limelight. Limelight also provided instructions and engineering support to customers. Such provided the necessary acts of “direct[ion] or control” to support attribution to Limelight of the customer’s tagging activities in performing a step of the Akamai patent.
To the extent that some had argued that the Supreme Court’s opinion in Akamai had created a “hole” in the law of direct of infringement that favored infringers in cases where no one actor performed all the steps of a method patent, any such loophole appears to have been closed absent further action by the U.S. Supreme Court, which is entirely possible. With respect to further development of the case law on this issue, the Federal Circuit also indicated that, “[i]n the future, other factual scenarios may arise which warrant attributing others’ performance of method steps to a single actor. Going forward, principles of attribution are to be considered in the context of the particular facts presented.” The new magic word in the law of divided infringement now appears to be “attribution.”