IP Update, Vol. 13, No. 5

Editor: Marc S. Weiner, Esq.

CAFC Decides Limelight Remand from U.S. Supreme Court

On May 13, 2015, the CAFC handed down their decision in the Limelight remand. CAFC Case No. 2009-1372. 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. A full understanding of the CAFC decision in Limelight requires a review of the procedural history of the case.

Akamai is the exclusive licensee of a patent directed to a method of delivering electronic data using a “content delivery network” (“CDN”). The final step of the claims is “tagging” step. Limelight operates a CDN and carries out all of the recited steps of the claimed method, except the tagging step, which Limelight requires be done by the end user customer. Limelight provides an instruction manual to its customers instructing them how to perform the tagging step. The U.S. District Court for the District of Massachusetts originally held in 2006 that Limelight was liable for direct infringement. However, shortly after the initial jury verdict the CAFC held in Muniauction Inc. v. Thomson Corp., 232 F. 3d 1318 (2008), 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.

Based on the Muniauction decision, the district court reversed the jury verdict of direct infringement, on the basis that Limelight does not control the tagging by the customers, and thus the control requirement of Muniauction was not met. The district court decision finding no direct infringement under 35 U.S.C.§271(a) was affirmed by the CAFC. (Akamai v. Limelight, 629 F. 3d 1311, Fed. Cir. 2011) However the CAFC later held in a per curiam decision that even though no one party may be liable for direct infringement, there can nonetheless be liability for inducing infringement. (Akamai v. Limelight, 692 F. 3d 1301, Fed. Cir. 2012). The CAFC per curium decision was appealed to the Supreme Court for consideration of the issue of whether there could be liability for inducing infringement in the absence of any liability by any party for direct infringement.

The Supreme Court noted in the Limelight decision that it was undisputed by the CAFC that for liability for inducing infringement to arise there must first be direct infringement. However, the Court disagreed with the CAFC on the point of whether there was direct infringement in Limelight. As noted above, the CAFC found that direct infringement can occur even if no one party is liable under 35 U.S.C.§271(a). Thus, the CAFC separated the analysis for liability for direct infringement under 35 U.S.C.§271(a) from the analysis for direct infringement for purposes of liability for inducing infringement. Pointing to the Muniauction decision, the Supreme Court disagreed with this bifurcated consideration and reversed the 2012 per curium Akamai decision. The Court noted that “The Federal Circuit held in Muniauction that a method’s steps have not all been performed as claimed by the patent unless they are all attributable to the same defendant, either because the defendant actually performed those steps or because he directed or controlled others who performed them.” The Court then held that, in following Muniauction,if there is no direct infringement under 35 U.S.C.§271(a) because no one party has performed or controlled all of the required claimed steps (i.e. no one is liable for direct infringement),there is simply no direct infringement and there can be no liability for inducement for infringement under 35 U.S.C.§271(b).

The Court held that the test for determining of whether there has been direct infringement for the purpose of finding liability for inducing infringement is the same test as set forth in Muniauction for determining whether liability for direct infringement is present under 35 U.S.C.§271(a). As such, the Court held that “performance of all the claimed steps cannot be attributed to a single person, so direct infringement never occurred. Limelight cannot be liable for inducing infringement that never came to pass.”

The Court tied their decision to Muniauction stating “But the reason Limelight could not have induced infringement under §271(b) is not that no third party is liable for direct infringement; the problem, instead, is that no direct infringement was committed. Muniauction (which, again, we assume to be correct) instructs that a method patent is not directly infringed-and the patentee’s interest is thus not violated-unless a single actor can be held responsible for the performance of all steps of the patent.” Importantly, the Supreme Court decision in Limelight was predicated by the earlier decision in Muniauction and the Court suggested that the CAFC decision in Muniauction is possibly incorrect and should be revised upon remand, with the concluding remarks by the Court that, “We granted certiorari on the following question: “Whether the Federal Circuit erred in holding that a defendant may be held liable for inducing patent infringement under 35 U. S. C. §271(b) even though no one has committed direct infringement under §271(a).” Pet. for Cert. i. The question presupposes that Limelight has not committed direct infringement under §271(a). And since the question on which we granted certiorari did not involve §271(a), petitioner did not address that important issue in its opening brief. Our decision on the §271(b) question necessitates a remand to the Federal Circuit, and on remand, the Federal Circuit will have the opportunity to revisit the §271(a) question if it so chooses.”

The Supreme Court in Limelight remanded the Limelight case to the CAFC for further consideration. However, on July 25, 2014, the CAFC denied a request for consideration of the remand with an en banc court. Because the current remand was not before an en banc panel of judges at the CAFC, the Muniauction decision cannot be overturned. On September 11, 2014 oral arguments in the remanded case were presented to the court. Limelight argued that Muniauction remains binding precedent, so the previous panel decision that it does not infringe should be reinstated. Akamai agreed that Muniauction could only be overruled by the en banc court, but argued that Limelight could still be found to infringe under that standard because the company has a “deep involvement” with its customers meaning that Limelight controls the infringement. Akamai argued that “an accused infringer ‘directs or controls’ a third party if the accused infringer goes beyond loosely providing instructions and specifically tells a third party the step or steps to perform.”

On May 13, 2015, the CAFC handed down their decision in the Limelight remand. CAFC Case No. 2009-1372. In their decision the court held that “Because this case involves neither agency nor contract nor joint enterprise, we find that Limelight is not liable for direct infringement.” The court further stated that “Encouraging or instructing others to perform an act is not the same as performing the act oneself and does not result in direct infringement.” The court said that Limelight and its customers were not jointly acting as a single enterprise, nor did they have a contractual relationship. The court said that Akamai failed to show that the customers were acting as agents of Limelight, were contractually obligated to Limelight or were acting in a joint enterprise. Despite the fact that Limelight provided an instruction manual to its customers explaining how to use the Limelight product and thereby perform the final required step of the claims, the court held that Limelight and its customers cannot be regarded to be acting a single entity and thus there is no direct infringement taking place.

It is expected that Akamai will request an en banc review of the decision and if necessary appeal the decision to the Supreme Court.

Summary provided by MaryAnne Armstrong, Ph.D.

Expedited Patent Appeal Pilot Program

The Patent Trial and Appeal Board (PTAB) has announced a new Expedited Patent Appeal Pilot Program. A copy of the relevant Federal Register can be found here.

Beginning on June 19, 2015, Appellants with multiple ex parte appeals pending before the PTAB will be:

• allowed to expedite review of one appeal in return for withdrawing another appeal;
• have greater control over the priority with which their appeals are decided; and
• reduce the backlog of appeals pending before the Board.

The PTAB will accept petitions for participation in the pilot program until June 20, 2016, or until the PTAB grants 2,000 petitions, whichever occurs first.

Appellants wishing to participate in the program need to make a certificate and file a petition to the Chief Judge under 37 CFR § 41.3.

The USPTO has waived the petition fee and provided a form (Form PTO/SB/438) for use in filing the certificate and petition.

The USPTO will accord a special status under the following conditions:

I. A certification and petition under 37 CFR 41.3 is filed via EFS in the application involved in the ex parte appeal for which special status is sought (“appeal to be made special”), identifying that application and appeal by application and appeal number, respectively.

• In addition, the appeal to be made special must be an appeal for which a docketing notice was mailed no later than June 19, 2015.
• Moreover, there must be no request for an oral hearing, or
  • any request for an oral hearing must be withdrawn, for the appeal to be made special, and
  • the Appellant must agree not to request a refund of any oral hearing fees paid with respect to the appeal to be made special.

II. The petition must include a request to withdraw the appeal in another application or ex parte reexamination (“appeal to be withdrawn”), identifying that application or ex parte reexamination and appeal by application or reexamination control number and appeal number, respectively.

• In addition, the appeal to be withdrawn must be an appeal for which a docketing notice was mailed no later than June 19, 2015.
• The petition must be filed before the appeal to be withdrawn has been taken up for decision.
• Appellant must agree not to request a refund of any appeal fees, including oral hearing fees, paid with respect to the appeal to be withdrawn.

III. The application involved in the appeal to be made special and the application or patent under reexamination involved in the appeal to be withdrawn must be either owned by the same party as of June 19, 2015, or name at least one inventor in common.

IV. The petition under 37 CFR 41.3 must be signed by a registered practitioner who has a power of attorney under 37 CFR 1.32, or has authority to act under 37 CFR 1.34, for the application involved in the appeal to be made special and for the application or patent under reexamination involved in the appeal to be withdrawn.

The PTAB has a goal of issuing a decision on the petition within 2 months of filing the petition and rendering a decision on the appeal no later than 4 months from the date the petition is granted.

Regarding the disposition of the withdrawn application, the process for handling an application in which an appeal is withdrawn is set forth in MPEP § 1215. Appellants should specifically note that an application having no allowed claims becomes abandoned upon withdrawal of an appeal, and that claims indicated as allowable but for their dependency from rejected claims are not considered allowed claims but are treated as rejected claims. See MPEP § 1215.01.

The filing of a request for continued examination under 37 CFR 1.114 in an application on appeal to the Board is treated as a request to withdraw the appeal and to reopen prosecution of the application before the examiner. See 37 CFR 1.114(d). A request for continued examination may be filed with a petition under 37 CFR 41.3, and the withdrawal of an appeal in that application resulting from the filing of such a request for continued examination may form the basis for a petition to make special based upon the Expedited Patent Appeal Pilot. The withdrawal of an appeal resulting from the filing of a request for continued examination prior to the filing of a petition under 37 CFR 41.3, however, may not form the basis for a petition to make special based upon the Expedited Patent Appeal Pilot.

Summary provided by BSKB’s IP Training Department.

The JPO as an ISA and IPEA

On June 19, 2015, PCT Updates announced effective July 1, 2015, the Japanese Patent Office (JPO) may act as an International Searching Authority (ISA) and International Preliminary Examining Authority (IPEA) under the Patent Cooperation Treaty (PCT) for international applications filed with the USPTO as a Receiving Office.

The following restrictions will apply:

• the applications are submitted in English;
• the claims are directed in the field of green technology as defined by certain International Patent Classification classes;
• the JPO has not received more than 5,000 international applications from the USPTO during the 3 year period from July 1, 2015 to June 30, 2018; and
  • not more than 300 applications per quarter during the first year, and
  • not more than 475 applications per quarter during the second and third years
• the JPO is chosen as a competent authority by the applicants of said application
• the JPO will also act as an IPEA if these four requirements are met, and the JPO acted as the ISA.

The dollar amount of the search fee required by the JPO when acting as an ISA will be $577.

Summary provided by BSKB’s IP Training Department.