August 19, 2015
Last week the Federal Circuit Court of Appeals (“Federal Circuit”) “changed the game” for parties, including website and mobile app owners that work in tandem with end users, to practice the steps of a patent. In Akamai Techs., Inc. v. Limelight Networks, Inc., Fed. Cir., No. 2009-1372, 8/13/15 (“Akamai”), the Federal Circuit held that a defendant can directly infringe a patent although it does not perform all of the patent’s steps, if the defendant “conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance.” In such a case, the actions of the third party are attributed to that defendant.

The Akamai decision is important because parties that direct end users to perform steps of a patent are more likely to be found liable. For example, website or mobile application owners that require a “terms of use” agreement that instructs its end users to perform steps of a patent will likely infringe under Akamai. A medical laboratory that directs users or patients to perform steps of a test may also infringe.

In Akamai, the Federal Circuit applied its new standard and found that Limelight directly infringed the ‘703 patent. Akamai showed that Limelight conditioned its customers’ use of its content delivery network upon its customers’ performance of certain “tagging” and “serving” steps of the ‘703 patent, and that Limelight established the manner or timing of its customers’ performance. The Court concluded that “the jury heard substantial evidence from which it could find that Limelight directs or controls its customers’ performance of each remaining method step, such that all steps of the method are attributable to Limelight.”

The Court also articulated guidelines to determine where direct infringement can be found through the actions of two or more actors who have formed a "joint enterprise." When two or more parties form a “joint enterprise” each party is responsible for the actions of the other "as if each is a single actor." The Court explained that a “joint enterprise” is found only with:
  1. an agreement, express or implied, among the members of the group;
  2. a common purpose to be carried out by the group;
  3. a community of pecuniary interest in that purpose, among the members; and
  4. an equal right to a voice in the direction of the enterprise, which gives an equal right of control.
For more information on the ruling or to determine how it may impact your business, please contact the authors, a member of the Intellectual Property Litigation practice, or your Polsinelli attorney.