Legal Alert

Supreme Court: No Possible Liability for Induced Infringement if No Possible Liability for Direct Infringement

June 4, 2014

Yesterday, the United States Supreme Court rejected recent Federal Circuit precedent that had held it was possible to be liable for induced infringement even if no one could be held liable for direct infringement. Limelight Networks, Inc. v. Akamai Technologies, Inc., 572 U.S. ___ (2014).

In Akamai Technologies, Inc. v. Limelight Networks, Inc., 692 F.3d 1301 (Fed. Cir. 2012), the Federal Circuit overruled en banc prior Federal Circuit precedent that held that, “in order for a party to be liable for induced infringement, some other single entity must be liable for direct infringement.” In reversing that precedent, the Federal Circuit held en banc that:

“Requiring proof that there has been direct infringement as a predicate for induced infringement is not the same as requiring proof that a single party would be liable as a direct infringer. If a party has knowingly induced others to commit the acts necessary to infringe the plaintiff’s patent and those others commit those acts, there is no reason to immunize the inducer from liability for indirect infringement simply because the parties have structured their conduct so that no single defendant has committed all the acts necessary to give rise to direct liability.”

Id . The Supreme Court disagreed. 572 U.S. ___. The Supreme Court acknowledged the concern that an infringer could “evade liability by dividing performance of a method patent’s steps with another whom the defendant neither directs nor controls,” but held that no one may be liable for inducing infringement of a patent “when no one has directly infringed the patent.” Id. (“[C]ourts should not create liability for induced infringement . . . where Congress has elected not to extend that concept.”)

Separately, with regard to “direct” infringement, the Supreme Court acknowledged — but did not endorse as correct — Federal Circuit precedent holding that a defendant who did not perform every step of a method claim could nonetheless be liable for direct infringement if the defendant “directed or controlled” others to perform whichever steps the defendant did not personally perform. Id. The Supreme Court indicated it declined to review the question of the proper standard for direct infringement because the question presented only addressed induced infringement. However, the Federal Circuit likely will take up the question of direct infringement (e.g., “direction and control”) on remand — so stay tuned.