Fed Cir: Limelight Liable for Divided Infringement

With multiple round-trips to the Court of Appeals for the Federal Circuit and the Supreme Court, the Federal Circuit issued an en banc reversal of the district court’s JMOL on the divided infringement issue with instructions to re-institute the jury’s original verdict finding infringement and awarding damages.   Akamai Technologies, Inc. et al. v. Limelight Networks, Inc., 2009-1372, 20019-1380, 2009-1416, 2009-1417 (Fed. Cir. November 2015) (Available Here).  Earlier rulings on the issue of divided infringement, when more than one actor is required to infringe an independent patent claim, the Court had said: “Direct infringement under § 271(a) occurs where all steps of a claimed method are performed by or attributable to a single entity. Where more than one actor is involved in practicing the steps, a court must determine whether the acts of one are attributable to the other such that a single entity is responsible for the infringement. We will hold an entity responsible for others’ performance of method steps in two\ sets of circumstances: (1) where that entity directs or controls others’ performance, and (2) where the actors form a joint enterprise.”  Akami (Aug. 13, 2015).

The Federal Circuit confirmed the jury damage award of over $45 million dollars.  In an en banc reversal of the district court’s JMOL on the divided infringement issue, the Court  issued instructions to reinstitute the jury’s original verdict finding infringement and awarding damages.

The first issue was whether the district court erred in construing the claim term “tagging.”    The parties had stipulated to a construction of “tagging” as “providing a ‘pointer’ or ‘hook’ so that the object resolves to a domain other than the content provider domain.”  The Court found that Limelight was attempting to limit the claim scope to a preferred embodiment.  Citing to Innova/Pure Water, Inc. v. Safari Water Filtration Sys., 381 F.3d 1111, 1117 (Fed. Cir. 2004), the Court stated even where a patent describes only a single embodiment, claims will not be read restrictively unless the patentee has demonstrated a clear intention to limit the claim scope.  The Court held that Limelight stipulated to a construction of “tagging,” and it was bound by that stipulation.

The second issue provides an example that reciting, in a patent claim, a recitation of a single element covers both a single element and a plurality of elements. The district court properly constructed the term “optimal server” and if the optimal server is limited to a single “best” server or refers to several servers.  The term “optimal server” does not appear in the patent, but the parties stipulated to a claim construction with the phrases: “to resolve to a domain other than the content provider domain” (part of the “tagging” construction) means “to specify a particular group of computers that does not include the content provider from which an optimal server is to be selected.”  Limelight argued that “optimal” should mean the “single aggregate best.”  However, the Court found that intrinsic evidence supported the district court’s construction where “optimal server” means several or a plurality of optimal servers.  Examples in the specification showed tagging enables the selection of one of several servers and the choice was based on any of the specific criteria.  Accordingly, the Court found no error in the district court’s construction of “optimal server.”

The third issue was whether the district court erred in allowing Akamai to present a lost profits theory based on the testimony of its expert.  Limelight argued that Akamai failed to show a causal connection between Limelight’s infringement and Akamai’s lost profits.  Limelight also argued that Akamai’s expert’s calculations were arbitrary and not based in sound economic theory because they failed to account for the price disparity between the products, namely that Limelight sold its product for half the price of Akamai’s.    The Court found that the expert did in fact account for the price disparity by excluding the lowest 25% of Limelight’s customers from his lost profit analysis and for discounting the potential award for price elasticity.

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