Akamai Expands Liability for Induced Infringement

By: Colin Harrington  |   October 17, 2012

The Federal Circuit recently announced its decision in the en banc cases of Akamai Technologies, Inc. v. Limelight Networks, Inc. and McKesson Technologies, Inc. v. Epic Systems Corporation.  Akamai Technologies, Inc. v. Limelight Networks, Inc., 692 F.3d 1301, (Fed. Cir. 2012).Both cases involved claims of infringement of method claims where there was split infringement because steps of the method were performed by at least two different parties. In Akamai, the defendant, Limelight, performed some steps of the method and instructed its clients to perform another step of the method. In McKesson, the defendant, Epic, licensed software to healthcare providers. The healthcare providers and healthcare consumers each perform different steps of the method. At trial, and in the panel decisions, the courts found that there was no direct infringement because no single entity performed all steps of the respective methods. Under the precedent of BMC Resources, Inc. v. Paymentech, the courts ruled that there could be no induced infringement without a single entity directly infringing the claims.

The en banc Federal Circuit held, “all the steps of a claimed method must be performed in order to find induced infringement, but it is not necessary to prove that all the steps were committed by a single entity.” In doing so, the Federal Circuit overruled its own 2007 decision in BMC Resources, Inc. v. Paymentech.

The Federal Circuit’s decision expands liability for induced infringement under 35 U.S.C. 271(b), especially for method claims. Other recent decisions from both the Federal Circuit and Supreme Court help define the scope of induced infringement under 35 U.S.C. 271(b).

The Federal Circuit laid out the elements of induced infringement for situations such as Akamai, where the accused inducer performs some of the method steps and induces a third party to perform the remaining steps, and for situations such as McKesson, where the accused inducer encourages two or more other parties to perform the different method steps. In the case where the accused inducer performs some of the steps, the patentee must prove: (1) the accused inducer knew of the patentee’s patent, (2) the accused inducer performed all but one of the steps of the method claimed in the patent, (3) it induced the third party to perform the final step of the claimed method, and (4) the third party in fact performed that final step. In the case where the accused inducer encourages other parties to perform the method steps, the patentee must prove: (1) the accused infringer knew of the the patentee’s patent, (2) it induced the performance of the steps of the method claimed in the patent, and (3) those steps were performed.

The first element of knowledge of the patent has recently received attention from the Supreme Court. In the 2011 case of Global-Tech Appliances, Inc. v. SEB S.A ., 131 S.Ct. 2060 (2011), the Supreme Court ruled that induced infringement requires that the accused inducer act with knowledge that the induced acts constitute patent infringement. However, Global-Tech also stands for the proposition that knowledge may be imputed based on willful blindness.  In Global-Tech, the accused infringer purchased a foreign made deep-fryer without patent markings, copied the design, retained an attorney to conduct a right-to-use study, then sold the deep-fryers to a third party, who imported them into the U.S.  The Court described the requirements for willful blindness as, “(1) the defendant must subjectively believe that there is a high probability that a fact exists and (2) the defendant must take deliberate actions to avoid learning of that fact.” The Court affirmed the finding of inducement based on willful blindness in view of the facts of the defendant’s knowledge of the successful design, the deliberate copying of the design, and the failure to inform the attorney providing the right-to-use study that the design had been copied. Similarly, the Federal Circuit case of Broadcom Corp. v. Qualcomm, Inc, 543 F.3d 683 (Fed. Cir. 2008), highlights the role of right-to-use opinions with regard to intent for inducement. There, the Federal Circuit held that “failure to procure such an opinion may be probative of intent in this context.”

The combination of Akamai, Global-Tech, and Broadcom expands liability for induced patent infringement while placing limits on the intent element. It is no longer a defense to induced infringement to argue that no single party performs all the steps of a method claim. Therefore, it becomes more important for an accused inducer to be able to show that he did not know that the patent would be infringed. 

Clearance / Right-to-Market Searches and Opinions

Searches and opinions remain a helpful tool for determining risk of releasing a new product or providing a new service. Although search results may provide knowledge of a potentially infringed patent, willful blindness to potentially infringed patents may also show knowledge. Accordingly, a search and opinion can be used to defend against a charge of induced infringement by negating the knowledge element. In order to obtain a useful opinion, the client should provide their counsel with a detailed product description including the origin of the product, particularly if the origin involved copying another design. With regard to a prospective process, the client and counsel should consider all of the parties involved in the  process, including the end user of the product or process.

Because failure to procure an opinion or a poor quality search may be considered as evidence of knowledge under a willful blindness theory, it is important to obtain a high quality search and opinion from a competent attorney. Moreover, the attorney should be provided with the technical details necessary for a complete search as well as any known information about similar products or services.

A clearance, right-to-market, or right-to-use opinion should address infringement issues raised by relevant search results. Where all the elements of a claim are present, infringement under a theory of inducement should be analyzed in addition to direct infringement. It is no longer a defense to induced infringement to argue that steps of a method are split between two or more parties.

Patent Prosecution

Although the holding of Akamai provides a new argument for infringement of method claims, careful claim drafting remains important. Even if a method claim having steps performed by separate parties can be enforced by showing induced infringement, the additional requirements of induced infringement increase the burden of proof and may reduce damages. In particular, damages under induced an induced infringement theory do not begin until the time when actual knowledge of the infringed patent can be proven. Therefore, it is preferable to have claims that are directly infringed by a single party. When drafting method claims, especially claims covering communications or transactions, each claim should be drafted to include only steps performed by one party.  Steps requiring actions by additional parties should only be added in the rare circumstance where such steps are necessary to overcome the prior art.