IP Update, Vol. 13, No. 7

Editor: Marc S. Weiner, Esq.

En Banc Decision from CAFC Finds Liability for Divided Infringement Under 35 U.S.C. §271(a)

Summary provided by MaryAnne Armstrong, Ph.D.

On August 13, 2015, Court of Appeals for the Federal Circuit (CAFC) issued their per curiam decision regarding liability for divided infringement under §271(a). Akamai Technologies, Inc. v. Limelight Networks, Inc. CAFC Case Nos. 2009-1372, 2009-1380, 2009-1416, 2009-1417. Previously, on May 13, 2015, the CAFC handed down their decision in the Limelight remand from the Supreme Court of the United States (SCOTUS). CAFC Case No. 2009-1372. In the remanded decision of May 13, 2015, the court found that Limelight was not guilty of direct infringement because Limelight and its customers were not acting as a single entity, nor was there a contractual relationship between Limelight and its customers. The CAFC then reconsidered the May 13, 2015 decision with an en banc panel.

In reaching their decision, the court affirmed that “Direct infringement under § 271(a) occurs where all steps of a claimed method are performed by or attributable to a single entity. See BMC Res., Inc. v. Paymentech, L.P., 498 F.3d 1373, 1379-81 (Fed. Cir. 2007).” However, the court further held that when more than one party is involved in practicing the steps required to perform a claimed method, it is still possible for there to be liability for direct infringement under 35 U.S.C.§271(a) when (1) one party directs or controls the performance of the parties, or (2) where the parties form a joint enterprise. In determining whether criteria (1) is met, i.e. one party directs or controls the performance of the parties, the court applied the principals of vicarious liability. In this regard, the court noted that, “an actor is liable for infringement under § 271(a) if it acts through an agent (applying traditional agency principles) or contracts with another to perform one or more steps of a claimed method. See BMC, 498 F.3d at 1380-81. We conclude, 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.” (emphasis added) Alternatively, a joint enterprise exists for purposes of creating possible liability for direct infringement when the following four criteria are met.

1. an agreement, express or implied, among the members of the group;
2. a common purpose to be carried out by the group;
3. a community of pecuniary interest in that purpose, among the members; and
4. an equal right to a voice in the direction of the enterprise, which gives an equal right of control.

Based on the expanded criteria for finding direct infringement, as noted above, the court held that,

The jury heard substantial evidence from which it could find that Limelight directs or controls its customers’ performance of each remaining method step, such that all steps of the method are attributable to Limelight. Specifically, Akamai presented substantial evidence demonstrating that Limelight conditions its customers’ use of its content delivery network upon its customers’ performance of the tagging and serving steps, and that Limelight establishes the manner or timing of its customers’ performance.

In finding that Limelight “conditions its customers’ use of its content delivery network upon its customers’ performance” the court noted that Limelight requires its customers to sign a contract, which delineates that the customer must perform the tagging step and serving steps. The court found that the contract serves as substantial evidence supporting “that Limelight conditions customers’ use of its content delivery network upon its customers’ performance of the tagging and serving method steps.” With regard to finding that “Limelight establishes the manner or timing of its customers’ performance”, the court noted that Limelight sends its customer a welcome letter instructing the customer how to use Limelight’s service; Limelight provides step-by-step instructions to its customers telling them how to integrate Limelight’s hostname into its webpages and if Limelight’s customers do not follow these precise steps, Limelight’s service will not be available; and Limelight’s engineers continuously engage with customers’ activities.

Based on this evidence, the court concluded “that the facts Akamai presented at trial constitute substantial evidence from which a jury could find that Limelight directed or controlled its customers’ performance of each remaining method step. As such, substantial evidence supports the jury’s verdict that all steps of the claimed methods were performed by or attributable to Limelight. Therefore, Limelight is liable for direct infringement.” Based on this finding the en banc court remanded the case to the CAFC panel “for resolution of all residual issues consistent with this opinion.”

It should also be noted that the earlier panel decision of a finding of no direct infringement was predicated by the earlier en banc decision in Muniauction Inc. v. Thomson Corp., 232 F. 3d 1318 (2008), in which the court held that for there to be direct infringement under 35 U.S.C.§271(a) a single party must be responsible (either themselves or through the control of a third party), for the complete infringement of the claimed invention. The court in the en banc rehearing did not explicitly overturn the Muniauction holding in the decision. However, the court stated in a footnote that, “To the extent our prior cases formed the predicate for the vacated panel decision, those decisions are also overruled.”

New USPTO Petitions Timeline

Summary provided by BSKB’s IP Training Department

The Office of Petitions has launched a new USPTO Patents Petitions Timeline. The timeline provides information on petition types that can be filed throughout each stage of the patent prosecution process.
For each petition type, users are able to easily access information on:

• average pendency over the past 12 months of decided petitions;
• the deciding office;
• petition grant rates, and
• links to specific sections of the MPEP or other parts of the USPTO website that relate to each petition type.

The website was developed to help customers access more detailed statistics, including grant and pendency rates, and useful information about each petition.

The USPTO Patents Petitions Timeline may be found here.