Divided Patent Infringement – Knowledge Is Inducement To Infringe

The problem of divided infringement between two or more parties is solved if the party orders or induces the conduct and if he knows or should known of circumstances that would make the conduct tortious infringement if it were his own.  Akamai Technologies, Inc. v. Limelight Networks, Inc., Fed. Cir., No. 2009-1372 combined with McKesson Technologies, Inc. v. Epic Systems Corp., Fed. Cir., No. 2010-1291, 8/31/2012 (en banc) (Fed. Cir. Aug. 31, 2012)  (available here).

When a single actor commits all the elements of infringement, that actor is liable for direct infringement under 35 U.S.C. § 271(a).  When a single actor induces another actor to commit all the elements of infringement, the first actor is liable for induced infringement under 35 U.S.C. § 271(b).  35 U.S.C. § 271(b) provides that “[w]hoever actively induces infringement of a patent shall be liable as an infringer.”  The question in this case is whether a defendant may be held liable for induced infringement if the defendant has performed some of the steps of a claimed method and has induced other parties to commit the remaining steps (as in the Akamai case), or if the defendant has induced other parties to collectively perform all the steps of the claimed method, but no single party has performed all of the steps itself (as in the McKesson case).

Much of the briefing in the Akamai – McKesson appeal questioned whether direct infringement can be found when no single entity performs all of the claimed steps of the patent.  “It is not necessary for [the Court] to resolve that issue today because we find that these cases and cases like them can be resolved through an application of the doctrine of induced infringement.”  The Federal Circuit Court of Appeals overruled BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007).

Akamai Technologies owns a patent that covers a method for efficient delivery of web content.  Defendant Limelight, however, does not modify the content providers’ web pages itself.  The claims required modification of content provider’s pages.  Instead, Limelight instructed its customers as to the steps needed to modify the pages.

McKesson Information Solutions owns a patent covering a method of electronic communication between healthcare providers and their patients.  Defendant Epic did not perform any steps of the patent.  Instead, those steps were divided between patients, who initiate communications, and healthcare providers, who perform the remainder of the steps.

Earlier, lower courts had held that Limelight and Epic did not infringe the patents asserted.

“The court has recognized that direct infringement applies when the acts of infringement are committed by an agent of the accused infringer or a party acting pursuant to the accused infringer’s direction or control.”  See BMC, 498 F.3d at 1380.

Induced infringement is not a strict liability tort; it requires that the accused inducer act with knowledge that the induced acts constitute patent infringement.  See Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060, 2068 (2011).  It is enough that the inducer “cause[s], urge[s], encourage[s], or aid[s]” the infringing conduct and that the induced conduct is carried out.  Arris Grp., Inc. v. British Telecomms. PLC, 639 F.3d 1368, 1379 n. 13 (Fed. Cir. 2011).  The Second Restatement of Torts provides that a person is liable for tortious conduct if he “orders or induces the conduct, if he knows or should know of circumstances that would make the conduct tortious if it were his own.”  Restatement (Second) of Torts § 877(a) (1979).  For induced infringement under section 271(b) the courts look to the common law principles of joint tortfeasance.  Hewlett-Packard Co. v. Bausch & Lomb, Inc., 909 F.2d 1464, 1469 (Fed. Cir. 1990).

In the McKesson case, Epic may be held liable for inducing infringement if it can be shown that (1) it knew of McKesson’s patent, (2) it induced the performance of the steps of the method claimed in the patent, and (3) those steps were performed.

Limelight may be liable for inducing infringement if the patentee could show that (1) Limelight knew of Akamai’s patent, (2) it performed all but one of the steps of the method claimed in the patent, (3) it induced the content providers to perform the final step of the claimed method, and (4) the content providers in fact performed that final step.

As a practice pointer to establish infringement, the patent owner should point to evidence that the defendant (1) did all the acts in the patent claim, or (2) ordered others to do these acts, or (3) induced others to do these acts, and (4) knew “or should have” known that, if defendant did those same acts, he or she would infringe the patent claim.

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