Akamai Technologies, Inc. v. Limelight Networks, Inc.

797 F.3d 1020 (2015)

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Nature of the Case

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Facts

The ’703 patent claims a method of delivering electronic data using a “content delivery network,” or “CDN.” P is the exclusive licensee. The ’703 patent provides for the designation of certain components of a content provider’s Web site to be stored on P’s servers and accessed from those servers by Internet users. This process is known as “tagging.” With this resource management P is able to increase the speed with which Internet users access the content of its customers’ Web sites. D operates a CDN and carries out several of the steps claimed in the ’703 patent. Instead of tagging those components of its customers’ Web sites that it intends to store on its servers D requires its customers to do their own tagging. D “provides instructions and offers technical assistance” to its customers regarding how to tag. D does not tag the components to be stored on its servers. P sued D for patent infringement. The jury awarded more than $40 million in damages. The Federal Circuit decided Muniauction, Inc. v. Thomson Corp., 532 F. 3d 1318 (2008). In that case, the Court of Appeals rejected a claim that the defendant’s method, involving bidding on financial instruments using a computer system, directly infringed the plaintiff’s patent. The defendant performed some of the steps of the patented method, and its customers, to whom the defendant gave access to its system along with instructions on the use of the system, performed the remaining steps. The court started from “the proposition that direct infringement requires a single party to perform every step of a claimed method.” The court held that the defendant in Muniauction was not liable for direct infringement because it did not exercise control or direction over its customers’ performance of those steps of the patent that the defendant itself did not perform. D moved for judgment as a matter of law. The Court granted the motion. Infringement of the ’703 patent required tagging and D does not control or direct its customers’ tagging. A panel of the Federal Circuit affirmed. The Federal Circuit granted en banc review and reversed. It concluded that the “evidence could support a judgment in [respondents’] favor on a theory of induced infringement” under §271(b). D sought certiorari, which was granted. The Supreme Court reversed and remanded: A party will not be liable for inducing infringement of a method patent under §271(b) when no one has directly infringed the patent under §271(a) or any other statutory provision. On remand, the court was to reconsider the scope of divided infringement under §271(a).