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Tuesday, October 15, 2019

U.S. SC overrules Federal Circuit again; this time, in case over direct infringement

By Jessica M. Karmasek | Jul 14, 2014

WASHINGTON (Legal Newsline) - The U.S. Supreme Court ruled last month that a defendant is not liable for inducing infringement of a patent when no one has "directly infringed" the patent.

In its June 2 opinion, the nation's high court reversed a decision of the U.S. Court of Appeals for the Federal Circuit, the federal court charged with handling all U.S. patent appeals. The Federal Circuit had found Limelight Networks Inc. infringed U.S. Patent No. 6,108,703.

The patent -- of which the Massachusetts Institute of Technology, or MIT, is the assignee and Akamai Technologies Inc. is the exclusive licensee -- claims a method of delivering electronic data using a content delivery network, or CDN.

The goal of a CDN is to serve content to end-users with high availability and high performance. CDNs serve a large portion of the Internet content, including web objects (i.e. text, graphics and scripts), downloadable objects (i.e. media files, software, documents), applications (e-commerce, portals), live streaming media, on-demand streaming media and social networks.

"The Federal Circuit's analysis fundamentally misunderstands what it means to infringe a method patent," Justice Samuel Alito wrote for a unanimous court.

"A method patent claims a number of steps; under this Court's case law, the patent is not infringed unless all the steps are carried out."

Limelight, which petitioned the high court to review the case, also operates a CDN and carries out several of the steps claimed in the '703 patent.

The patent provides for the designation of certain components of a content provider's website -- often large files, such as video or music files -- to be stored on Akamai's servers and accessed from those servers by Internet users.

That process of designating components to be stored on Akamai's servers is known as "tagging."

Instead of tagging those components of its customers' websites that it intends to store on its servers, Limelight requires its customers to do their own tagging.

Despite that fact, MIT and Akamai filed suit in 2006. They claim Limelight "provides instructions and offers technical assistance" to its customers regarding how to tag.

But, as the justices pointed out in their 11-page ruling, Limelight does not tag the components to be stored on its servers itself.

"When Congress wishes to impose liability for inducing activity that does not itself constitute direct infringement, it knows precisely how to do so," Alito wrote for the high court, siding with Limelight. "The courts should not create liability for inducement of non-infringing conduct where Congress has elected not to extend that concept."

The justice continued, "The Federal Circuit seems to have adopted the view that Limelight induced infringement on the theory that the steps that Limelight and its customers perform would infringe the '703 patent if all the steps were performed by the same person.

"But we have already rejected the notion that conduct which would be infringing in altered circumstances can form the basis for contributory infringement, and we see no reason to apply a different rule for inducement."

Limelight CEO Bob Lento said the company is "pleased" with the ruling.

"By promoting clear rules governing liability for patent infringement, the Supreme Court's decision is a win not only for Limelight, but also for innovators throughout the country," he said in a statement.

"We appreciate the support received from so many others, and look forward to full resolution."

The Electronic Frontier Foundation, a San Francisco-based digital watchdog group, was among those that filed an amicus brief in support of the company.

In its brief, EFF argued that Akamai's legal strategy could create a new category of patent defendants: end-users who unknowingly performed one of the steps.

"Opening up third parties to that unacceptable risk could have drastic effects on innovation and experimentation," the foundation wrote.

EFF admitted that this area of patent law is complex, but said it is important that courts reach the "right result."

"The Federal Circuit reasoned that in this case, despite the text of the statute, Congress would have wanted the defendant to be found liable even though its customers performed one of the steps of the patent," the foundation said in a statement following the ruling.

"The Supreme Court saw the mischief that the Federal Circuit's approach could cause, finding 'no principled reason' that would prevent the Federal Circuit from finding infringement in other circumstances based on a notion that 'Congress would have wanted it' (even though Congress never actually did)."

From Legal Newsline: Reach Jessica Karmasek by email at

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