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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?
That is the question that the Federal Circuit is now asking after granting a petition by Akamai Technologies in its appeal of Akamai Technologies Inc. v. Limelight Networks Inc. The grant vacated an earlier panel opinion and ordered an en banc (full-court) reconsideration of the law of joint infringement.
In Akamai, the Federal Circuit clarified the requirements for establishing joint infringement—a theory of direct infringement that may be used when a single party does not perform all of the steps of a method claim. The decision provides a good reminder to consider who is likely to perform each step of a method claim. This analysis can be particularly important in the context of diagnostic and personalized medicine methods.
Joint infringement is based on a theory that one party orchestrates the infringement and that the activities of the other joint infringer(s) must be under the "direction and control" of the mastermind. The result is as if one party performed the infringement by itself.
Akamai obtained patents on a scalable solution that could efficiently deliver large amounts of web content. But Akamai is facing competition from companies, including Limelight, for methods of distributing movies, 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 to Limelight's contracts with its content provider customers, to use Limelight's CDN 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 has practiced each and every element of the claimed invention," joint liability may be found when one party "control[s] or direct[s]" the activities of another party.
Questions of joint infringement are encountered frequently in patent litigation of software, e-commerce and Internet-related inventions, but also in medical diagnostic testing and procedures. It is not uncommon to find method claims reciting a step or two that a consumer or other party might perform. Consequently, it can be difficult to prove direction and control for a lot of method patents that involve more than one actor to perform the recited method steps.
The Federal Circuit began its analysis by emphasizing that "direct infringement requires a single party to perform every step of a claimed method." In upholding the district court's finding of noninfringement in Akamai, the Federal Circuit clarified that "the performance of a method step may be attributed to an accused infringer when the relationship between the accused infringer and another party performing a method step is that of principal and agent."
While control or direction is a consideration, as is the extent to which instructions, if any, may be provided, what is essential is not merely the exercise of control or the providing of instructions, but whether the relationship between the parties is such that acts of one may be attributed to the other.
The court held there can only be joint infringement when there is an agency relationship between the parties who perform the method steps or when one party is contractually obligated to the other to perform the steps. For an agency relationship to exist—and thus, for infringement to be found—both parties must consent that the agent is acting on the principal's behalf and subject to the principal's control.
In the present case, the court found that the tagging instructions that Limelight provided to its customers did not create an agency relationship. In particular, the court found no evidence that Limelight had any right to control its customer's actions. The Federal Circuit found that Limelight's customer contracts did "not obligate [its] customers to perform any of the method steps. It merely explains that the customer will have to perform the steps if it decides to take advantage of Limelight's service." Thus, no joint direct infringement could be found.
The court concluded that Limelight's customers "acted principally for their own benefit and under their own control," and so their actions could not be attributed to Limelight. The court also noted that problems such as these can usually be prevented by good claim drafting that covers the acts of a single party saying, "Akamai put itself in a position of having to show that the allegedly infringing activities of Limelight's customers were attributable to Limelight."
For diagnostic and medicine patents, each method must be carefully scrutinized as to who would perform each of the method steps of the claims. 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 the metabolite level, does it do so as an agent of the doctor, or under a contractual obligation to do so? Do the requirements for induced infringement or contributory infringement need to be satisfied to find a lab (or test kit manufacturer) liable for infringement?
The current rehearing may settle some of these questions. Instead of asking for specific consideration of the issue applicable to the facts of the particular case at hand, the Federal Circuit has invited the parties to provide a detailed analysis on the general theme of when there can be infringement by multiple entities practicing various steps of a claimed invention.