Limelight Networks v. Akamai Technologies

PETITIONER: Limelight Networks
RESPONDENT: Akamai Technologies
LOCATION: Massachusetts Institute of Technology

DOCKET NO.: 12-786
DECIDED BY: Roberts Court (2010-2016)
LOWER COURT:

CITATION: 572 US (2014)
GRANTED: Jan 10, 2014
ARGUED: Apr 30, 2014
DECIDED: Jun 02, 2014

Facts of the case

In the late 1990s, two professors at the Massachusetts Institute of Technology (MIT), Tom Leighton and Daniel Lewin, began to research techniques to provide stable internet services during periods of high traffic. These men eventually founded Akamai Technologies, Inc. (Akamai) to capitalize on this research. Akamai is an internet content delivery company that owns and maintains thousands of servers around the United States and contracts with internet service providers. By contracting with these companies, Akamai can deliver stable, fast internet to far-reaching customers with less danger of internet slowdown or failure. On July 14, 1998, the two men filed a patent through MIT for a method designed to alleviate Internet congestion by delivering content from multiple available servers. MIT then licensed this patent to Akamai.

Shortly thereafter, several other internet companies filed patent applications for internet content delivery systems. This led to a series of litigations that spanned from the late 1990s to the mid-2000s. In 2004, in the midst of these court battles, Akamai entered into negotiations to purchase Limelight Networks, Inc. (Limelight). In 2006, however, Limelight informed Akamai that it no longer wished to be purchased. Akamai subsequently sued Limelight in district court for violating 35 U.S.C. § 271(a) and § 271(b), federal laws prohibiting patent infringement. Specifically, § 271(a) prohibits general patent infringement and § 271(b) prohibits inducing patent infringement.

The case proceeded to trial and a jury awarded Akamai a $41.5 million verdict based on lost profit, lost royalties, interest, and price erosion damages. After a series of post-trial motions, the district court ultimately ruled in favor of Limelight and held that, although Akamai's patent was violated, much of the violation occurred when Limelight's customers took the key steps to violate the patent. Although Limelight allowed these steps to occur, it did not control its customers' actions and therefore was not liable. The U.S. Court of Appeals for the Federal Circuit affirmed and held that an entity accused of patent infringement must either perform all of the steps of the claimed method, either personally or through its direct control.

Question

Did the Federal Circuit court err in holding that a defendant may be liable for inducing patent infringement under § 271(b) even if no party committed direct infringement under §271(a)?

Media for Limelight Networks v. Akamai Technologies

Audio Transcription for Oral Argument - April 30, 2014 in Limelight Networks v. Akamai Technologies

Audio Transcription for Opinion Announcement - June 02, 2014 in Limelight Networks v. Akamai Technologies

Justice Alito has our opinion this morning in case 12-786, Limelight Networks versus Akamai Technologies.

This case presents the question whether a defendant may be liable for inducing patent infringement when no one has directly infringed the patent.

Respondent, Akamai Technologies is the exclusive licensee of a patent on a method of delivering -- delivering web content using a content delivery network.

Akamai sued petitioner, Limelight Networks, claiming that Limelight had infringed its method patent.

Limelight does indeed carry out several steps of this patent, but it does not carry out one of the patent steps namely the step of selecting the web content that Limelight will deliver.

Instead, Limelight's customers performed this step with some help it seems from Limelight.

The District Court found that Limelight could not have directly infringed the patent because under Federal Circuit case law, a method patent is not directly infringed unless all its steps are attributable to a single party.

The Federal Circuit panel affirmed but the en banc Federal Circuit reversed.

The en banc court held that even assuming that Limelight did not directly infringed the patent, the evidence could never the less support a finding of inducement of infringement because the defendant who performs some steps of the patent and encourages others to perform, the remaining steps may be liable for inducement even if all the steps are not attributable to the defendant.

We hold that a defendant cannot be liable for inducing infringement of a patent unless some party directly infringes the patentee's legal rights.

A case law has long recognized that where there is no direct infringement, there can be no inducement of infringement.

Direct infringement of a method patent in turn can only occur where all steps of the method are performed because the patentee has a legally protected interest only in the claim's set of steps as a whole.

Under Federal Circuit law which was not questioned by the en banc court and the merits of which we do not assess today, a method patent steps have not all been performed as claims by the patent unless they are all attributable to the same party.

Accepting as did the court below that Akamai's patent steps are not all attributable to Limelight, no one infringed Akamai's patent.

Limelight there -- cannot be held liable for inducing infringement that never occurred.

We therefore reverse the decision of the Federal Circuit and remand for further proceedings consistent with this opinion.

Our decision is unanimous.

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