On May 13, 2015, the U.S. Court of Appeals for the Federal
Circuit again considered the circumstances in which a defendant may be liable
for direct infringement under 35 U.S.C. § 271(a) when multiple actors carry out the required
steps of a patented process. In a sharply divided panel decision, the court
ruled that while principles of vicarious liability apply to direct
infringement, liability is not available under joint tort concepts, such as
“concert in action.” Akamai
Technologies Inc. v. Limelight Networks, Inc., Case No. 2009-1372 (Fed.
Cir. May 13, 2015). As a result, a defendant may be liable for direct
infringement of a method claim only if: (a) the defendant performed every
step of the patented method, or (b) if the defendant did not perform every
step, the defendant was a “mastermind” that orchestrated the infringement and
thus was responsible for the steps performed by others. In order to be a
mastermind, a defendant must go beyond merely instructing or encouraging another
actor to perform the steps that it did not perform -- a defendant is liable only
if it is legally responsible for the missing steps due to a principal-agent
relationship, a contractual arrangement, or a joint enterprise.
The
latest Akamai decision essentially reaffirms the court’s earlier ruling in Muniauction, Inc. v. Thomson Corp., 532
F.3d 1318 (2008) that direct infringement liability requires a single entity to
perform all the steps of a patented method. This interpretation could have
far-reaching implications for patent claim drafting and infringement
litigation.
In a 2 to 1 decision written by Circuit Judge Richard Linn,
the court ruled that § 271(a)
includes a “single entity rule:”
[D]irect infringement liability of
a method claim under 35 U.S.C. § 271(a) exists when all of the steps of the claim
are performed by or attributed to a single entity—as would be the case, for
example, in a principal-agent relationship, in a contractual arrangement, or in
a joint enterprise. Because this case involves neither agency nor contract nor
joint enterprise, we find that Limelight is not liable for direct infringement.
Slip op. at 6-7. The
court ruled that while § 271(a)
covers situations in which a defendant is legally responsible for the acts of
closely-related third parties (i.e., vicarious
liability), direct infringement does not extend to common law tort theories in
which multiple persons acting together are jointly liable.
In a vigorous dissent, Circuit Judge Kimberly A. Moore
argued that the single entity rule has no basis in the statute or case law, and
that limiting the scope of §
271(a) to vicarious liability situations creates a “gaping hole” in liability
under the Patent Act, effectively rendering thousands of process claims
uninfringeable. She argued that liability under § 271(a) also applies in cases where defendants
would be considered jointly liable under some common law tort principles. Due
to the pointed dissent, however, it is likely that the Federal Circuit will
again review the issue en banc.
The Akamai
decision underscores the need for patent applicants to claim their process
inventions in a way that can be infringed by a single actor, either through
actions by a single competitor or actions attributable to it through
contractual relationship or agency principles. This is especially important
because liability for active inducement or contributory infringement will not
be available in many cases due to the high intent standard required in § 271(b) and (c). See Global-Tech Appliances, Inc. v. SEB S.A.,
131 S. Ct. 2060 (2011) (active inducement requires actual intent to cause
infringement or willful blindness).
A copy of the decision is available HERE.
No comments:
Post a Comment