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April 17 --The patent community came out in force, with 22 briefs filed by friends of the court, on both sides of a case questioning how infringement can be found when more than one party performs steps of a patented method, in Limelight Networks Inc. v. Akamai Techs. Inc., ( U.S., No. 12-786, briefing 4/2/14).
The court granted cert Jan. 10 on the question: “Whether the Federal Circuit erred in holding that a defendant may be held liable for inducing patent infringement under 35 U.S.C. §271(b) even though no one has committed direct infringement under §271(a)” (08 PTD, 1/13/14).
Patent owner Akamai Technologies Inc., though, pressed its argument that the high court should also address how two parties acting jointly can be liable for direct infringement, which does not require proof of intent as does inducement.
Alleged infringer Limelight Networks Inc. is likely to file a reply brief on or before April 23. Oral argument will be held a week later.
Akamai and Limelight offer competitive “content delivery networks” (CDNs), storing and delivering website content to Internet users on behalf of website operators.
Akamai owns a patent (U.S. Patent No. 6,108,703) on a “Global Hosting System” for web content. Limelight can only infringe the patent if it performs some steps of the asserted method claims and the websites of its customers perform the remainder.
The U.S. Court of Appeals for the Federal Circuit, sitting en banc, was divided 6-5 in this case. Akamai Technologies Inc. v. Limelight Networks Inc., 692 F.3d 1301, 104 U.S.P.Q.2d 1799 (Fed. Cir. 2012) (en banc) (170 PTD, 9/4/12)).
The court overturned precedent in holding that a patent owner claiming induced infringement--under Section 271(b)--no longer had to show that a single induced entity is liable for direct infringement under Section 271(a). Thus, in general, a method patent holder can hold an Internet application service provider, for example, liable for infringement by performing some steps and inducing an end user to perform the other steps. And here, Akamai--on remand, since inducement was not decided by the lower court yet--can hold Limelight liable for inducing website operators to use Limelight's CDN.
Limelight filed its petition for writ of certiorari in January 2013 (05 PTD, 1/8/13), and the high court called for the views of the Solicitor General, whose office recommended review in a brief filed on Dec. 10 (240 PTD, 12/13/13).
The court granted cert on Jan. 10 (08 PTD, 1/13/14), with Justice Samuel A. Alito not participating in the petition review.
The government did not recommend review of and the court did not announce any action on Akamai's conditional cross-petition, which focused on the question of direct infringement--under Section 271(a) alone--jointly by multiple parties. Akamai Techs. Inc. v. Limelight Networks Inc., No. 12-960 (U.S., review sought Feb. 4, 2013).
Aaron M. Panner of Kellogg, Huber, Hansen, Todd, Evans & Figel, Washington, submitted Limelight's merits brief on Feb. 24. Limelight made five arguments:
• The plain text of Section 271(b) requires finding that a single entity directly infringes the patent.
• The Supreme Court said exactly that in Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336, 341, 128 U.S.P.Q. 354 (U.S. 1961).
• The Federal Circuit majority's analogies to principles of criminal law and tort law “undermine, rather than support, the decision below.”
• The policy concern that “the statute creates a loophole in cases of 'divided infringement' of method claims” is for Congress, not the courts to address.
• The majority's standard “fails to produce the proper ex ante incentives for innovation and investment” because Akamai could have fixed the problem by drafting claims “from the point of view of a single actor; such has been the recommended practice for years.”
The United States, in a brief submitted by Solicitor General Donald B. Verrilli Jr., supported Limelight's position.
“As a matter of patent policy, there is no obvious reason why a party should be liable for inducing infringement when it actively induces another party to perform all the steps of the process, but not liable when it performs some steps and induces another party to perform the rest,” the government acknowledged.
However, according to the brief, the Federal Circuit's ruling here is inconsistent with the text of the statute, and if a “statutory gap” exists, it is up to Congress to fill it.
Fourteen briefs by friends of the court were filed coincident with Limelight's brief. Two intellectual property bar associations supported neither party but had strong criticisms of the Federal Circuit's approach:
• Conejo Valley Bar Association, filed by Steven C. Sereboff of the SoCal IP Law Group LLP, Westlake Village, Calif.; and
• Intellectual Property Owners Association, filed by Robert P. Taylor of Arnold & Porter LLP, Washington.
The American Bar Association, in a brief submitted by ABA President James R. Silkenat, essentially said that the court took the wrong petition and should have resolved Akamai's concerns about joint direct infringement under Section 271(a) instead.
Three other briefs were filed by associations:
• The Clearing House and the Financial Services Roundtable, in a brief filed by Robert A. Long Jr. of Covington & Burling LLP, Washington, argued on behalf of alleged infringers in the financial services industries who, under the Federal Circuit's expansion, may be liable based on the combined actions of them and their customers.
• CTIA--The Wireless Association made the same argument on behalf of wireless network providers. The brief was filed by Pratik A. Shah of Akin Gump Strauss Hauer & Feld LLP, Washington.
• The Electronic Frontier Foundation generally represents interests of Internet and other computing-related users, but its brief spoke on behalf of “unsuspecting third parties” in a broader sense--those who may be party to the inducement simply by being “downstream users of technology.”
Two briefs were filed by groups of academics.
• Shubha Ghosh of the University of Wisconsin Law School, Madison, Wis., filed a brief on behalf of eight “Patent and Intellectual Property Law Scholars” that echoed Limelight's arguments.
• Timothy R. Holbrook of the Emory University School of Law in Atlanta filed on behalf of “Ten Intellectual Property Law Professors,” adding an argument. Section 271(b) “contains no express territorial limits,” the professors said, and thus the Federal Circuit's standard “risks greatly expanding the extraterritorial reach of active inducement of patent infringement.”
The other six briefs filed before March 3 were submitted on behalf of 24 companies. They represent a diverse set of industries, though again the majority compete in online endeavors:
• Altera Corp., HTC Corp., Smugmug Inc. and Weatherford International, submitted by Jerry R. Selinger of Patterson & Sheridan LLP, Dallas;
• Cargill Inc., the Coca-Cola Co., General Mills Inc. and Hormel Foods Corp., filed by Aaron D. Van Oort of Faegre Baker Daniels LLP, Minneapolis;
• International Business Machines Corp., filed by Mark J. Abate of Goodwin Proctor LLP, New York;
• Google Inc., in a brief submitted by Kathleen M. Sullivan of Quinn Emanuel Urquhart & Sullivan LLP, New York, and joined by Cisco Systems Inc., Ebay Inc., Facebook Inc., Micron Technology Inc., Netflix Inc., Oracle Corp., Red Hat Inc, SAP America Inc., Vizio Inc., Xilinx Inc. and Yahoo! Inc.;
• Microsoft Corp., by Matthew D. McGill of Gibson, Dunn & Crutcher LLP, Washington; and
• Newegg and L.L. Bean, filed by Peter J. Brann of Brann & Issacson, Lewiston, Maine.
Seth P. Waxman of Wilmer Cutler Pickering Hale & Dorr LLP, Washington, submitted the respondent's brief.
Beginning with a direct infringement argument, Akamai argued that the so-called “single entity rule” is a “nonstatutory loophole created by a handful of recent Federal Circuit decisions.” Akamai fell back on inducement as an alternative theory, and then said, “Either way, the correct result under the Patent Act is not that Limelight 'avoid[s] liability altogether' (U.S. Br. 14), but that the Patent Act is enforced as written and intended: to protect innovative methods from unauthorized use.”
Criticizing the policy arguments made by Limelight and its amici, Akamai insisted that they amounted to a “get-out-of-jail-free card.”
Finally, the brief knocked comments that Akamai drafted the claims poorly by noting the U.S. government's acknowledgement that single-actor claim drafting is not always possible. Akamai added, “Nor should inventors of cooperative methods be required to twist their claims through clever drafting to the point that the claims mask the true invention or claim it only obliquely.”
The American Intellectual Property Law Association, in a brief filed by Jeffrey I. D. Lewis of Paterson Belknap Webb & Tyler LLP, New York, also argued that both direct and induced infringement theories should be applied here. AIPLA further asked the court to modify the remand to the district court, ensuring that Akamai can continue to pursue Section 271(a) direct infringement charges as well.
The life sciences industries were fully on Akamai's side as well, citing the likelihood that their patented method claims will require performance by multiple parties, such as a laboratory and a doctor.
The Biotechnology Industry Organization, in a brief filed by Scott A.M. Chambers of Patton Boggs, Washington, said that biotechnological processes and method patents that protect them “can often be practiced by different entities.”
“Achieving the promise of personalized medicine necessarily means more entities will be involved in providing treatment to the patient,” according to the brief by the Pharmaceutical Research and Manufacturers of America, filed by Carter G. Phillips of Sidley Austin LLP, Washington.
Companies in those industries supported Akamai as well:
• Eli Lilly & Co., submitted by Lilly's Mark Jordan Stewart; and
• Myriad Genetics Inc., and Genomic Health Inc., filed by Benjamin G. Jackson of Salt Lake City-based Myriad.
Bally Technologies Inc. and SHFL Entertainment Inc., in a brief filed by Adrian M. Pruetz of Glaser Weil Fink Jacobs Howard, Los Angeles, did not specifically call out the gaming industry as having similar problems. However, a 2011 case involving Bally centered on a patent that required interaction between a slot machine user and a centralized payout server.
Finally, individual inventor Robert Mankes submitted a brief, filed by Anthony J. Biller of Coats & Bennett PLLC, Cary, N.C., seeking reversal of the Federal Circuit's Section 271(a) jurisprudence. Mankes argued that his patent on reservation system for theatres, hotel chains, and other businesses was granted before the Federal Circuit adopted its single-entity rule, and that he has since become “powerless” to enforce his patent against jointly-acting businesses that partner to infringe it.
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Limelight brief is available at http://pub.bna.com/ptcj/120786PetBrief.pdf.
Akamai brief is available at http://pub.bna.com/ptcj/120786RespBrief.pdf.
Amicus briefs are available at http://www.americanbar.org/publications/preview_home/12-786.html.
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