If separate parties perform steps of a method claim, can they each be held liable for patent infringement?
If separate entities each perform separate steps of a method claim, under what circumstances would that claim be directly infringed, and to what extent would each of the parties be liable?
If separate entitieseach perform separate steps of a method claim, under what circumstances wouldthat claim be directly infringed, and to what extent would each of the partiesbe liable?
That is the question that the Federal Circuit is now askingafter granting a petition by Akamai Technologies in its appeal of Akamai Technologies Inc. v. LimelightNetworks Inc. The grant vacated an earlier panel opinion and ordered an en banc (full-court) reconsideration ofthe law of joint infringement.
In Akamai, theFederal Circuit clarified the requirements for establishing jointinfringement—a theory of direct infringement that may be used when a singleparty does not perform all of the steps of a method claim. The decisionprovides a good reminder to consider who is likely to perform each step of amethod claim. This analysis can be particularly important in the context ofdiagnostic and personalized medicine methods.
Joint infringement is based on a theory that one partyorchestrates the infringement and that the activities of the other jointinfringer(s) must be under the "direction and control" of the mastermind. Theresult is as if one party performed the infringement by itself.
Akamai obtained patents on a scalable solution that couldefficiently deliver large amounts of web content. But Akamai is facingcompetition from companies, including Limelight, for methods of distributingmovies, music and software to computers for services such as Hulu and Netflix.
Limelight's accused service delivers content providers'embedded objects from its Content Delivery Network (CDN). According toLimelight's contracts with its content provider customers, to use Limelight'sCDN service, the content provider must perform several steps.
Akamai relied on the reasoning in BMC Resources that while"[i]nfringement requires, as it always has, a showing that a defendant haspracticed each and every element of the claimed invention," joint liability maybe found when one party "control[s] or direct[s]" the activities of anotherparty.
Questions of joint infringement are encountered frequentlyin patent litigation of software, e-commerce and Internet-related inventions,but also in medical diagnostic testing and procedures. It is not uncommon tofind method claims reciting a step or two that a consumer or other party mightperform. Consequently, it can be difficult to prove direction and control for alot of method patents that involve more than one actor to perform the recitedmethod steps.
The Federal Circuit began its analysis by emphasizing that "directinfringement requires a single party to perform every step of a claimedmethod." In upholding the district court's finding of noninfringement in Akamai, the Federal Circuit clarifiedthat "the performance of a method step may be attributed to an accusedinfringer when the relationship between the accused infringer and another partyperforming a method step is that of principal and agent."
While control or direction is a consideration, as is theextent to which instructions, if any, may be provided, what is essential is notmerely the exercise of control or the providing of instructions, but whetherthe relationship between the parties is such that acts of one may be attributedto the other.
The court held there can only be joint infringement whenthere is an agency relationship between the parties who perform the methodsteps or when one party is contractually obligated to the other to perform thesteps. For an agency relationship to exist—and thus, for infringement to befound—both parties must consent that the agent is acting on the principal'sbehalf and subject to the principal's control.
In the present case, the court found that the tagginginstructions that Limelight provided to its customers did not create an agencyrelationship. In particular, the court found no evidence that Limelight had anyright to control its customer's actions. The Federal Circuit found thatLimelight's customer contracts did "not obligate [its] customers toperform any of the method steps. It merely explains that the customer will haveto perform the steps if it decides to take advantage of Limelight'sservice." Thus, no joint direct infringement could be found.
The court concluded that Limelight's customers "actedprincipally for their own benefit and under their own control," and sotheir actions could not be attributed to Limelight. The court also noted thatproblems such as these can usually be prevented by good claim drafting thatcovers the acts of a single party saying, "Akamai put itself in a position ofhaving to show that the allegedly infringing activities of Limelight'scustomers were attributable to Limelight."
For diagnostic and medicine patents, each method must becarefully scrutinized as to who would perform each of the method steps of theclaims. Questions raised include: If the patient self-administers the drug,does he or she do so as an agent of the doctor? If a lab determines themetabolite level, does it do so as an agent of the doctor, or under acontractual obligation to do so? Do the requirements for induced infringementor contributory infringement need to be satisfied to find a lab (or test kitmanufacturer) liable for infringement?
The current rehearing may settle some of these questions.Instead of asking for specific consideration of the issue applicable to thefacts of the particular case at hand, the Federal Circuit has invited theparties to provide a detailed analysis on the general theme of when there canbe infringement by multiple entities practicing various steps of a claimedinvention.
Stephen Albainy-Jeneiis a patent attorney at Frost Brown Todd LLC, serving up chat atPatentBaristas.com. Feel free to write him with comments or questions at email@example.com.