In 2006, Akamai Technologies, Inc. (Akamai) filed a patent infringement action against Limelight alleging
infringement of claimed methods for delivering content over the internet. Although the parties agreed that two of the method steps were performed by Limelight’s customers, at trial, the jury found that Limelight directly infringed the method claims. Shortly thereafter, the Federal Circuit decided Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008) and ruled therein, “where the actions of multiple parties combine to perform every step of a claimed method, the claim is directly infringed only if one party exercises ‘control or direction’ over the entire process such that every step is attributable to the controlling party, i.e., the ‘mastermind.’” Citing Muniauction, Limelight moved for reconsideration, and the district court granted its motion, holding as a matter of law that limelight could not be liable for the actions of its customers. Akamai appealed.
A lengthy appellate history followed, which included a grant of certiorari and a remand from the Supreme Court, noting “the possibility that [the Federal Circuit] erred by too narrowly circumscribing the scope of § 271(a).” On remand, the Federal Circuit, in a panel decision, ruled that only a “single entity” can directly infringe a method claim, and that the “single entity” includes multiple entities only where “principalagent relationships, contractual arrangements, [or a] joint enterprise” exist (i.e., where one party acts as a mastermind).
In the instant case, the Federal Circuit, sitting en banc, sua sponte vacated and reversed its panel’s ruling, and expanded the test for joint direct infringement liability to include situations when “all method steps can be attributed to a single entity.” Based on the particular facts before it in this case, the court then ruled that direct infringement liability applies “when an alleged infringer conditions participation in an activity or receipt of a benefit upon the performance of a step or steps of a patented method and established the manner or timing of that performance.” The court also noted:
In 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 court reinstated the jury’s finding of direct infringement, reasoning that the jury heard “substantial evidence” to support its finding “that Limelight directed or controlled its customers’ performance of each remaining method step.” This evidence showed: (1) that limelight “requires all of its customers to sign a standard contract” that “delineates the steps [including the two claimed steps] customers must perform in they use [Limelight’s] service”; (2) that Limelight gave its customers a “welcome letter” that “[told] the customer that a Technical Account Manager employed by Limelight [would] lead the implementation of Limelight’s services”; (3) that instructions told customers how to integrate Limelight’s services; (4) that installation guidelines gave customers information on how to perform the two claimed steps; and (5) that “Limelight’s engineers continuously engage[d] with [its] customers’ activities.”
The court concluded: “Limelight’s customers do not merely take Limelight’s guidance and act independently on their own. Rather, Limelight establishes the manner and timing of its customers’ performance so that customers can only avail themselves of the service upon their performance of the method steps.”
Akamai Tech., Inc. v. Limelight Networks, Inc., No. 20091372 (Fed. Cir., Aug. 13, 2015) (en banc) (before Prost, C.J; and Newman, Lourie, Linn, Dyk, Moore, O’Malley, Reyna, Wallach, and Hughes, J.) (Per Curiam).