In 2006, Akamai Technologies, Inc. filed a patent infringement action against Limelight alleging infringement of several patents, including the ’703 patent, which claims methods for delivering content over the Internet. The jury found that Limelight infringed certain claims of the subject-matter patent. United States Court of Appeals for the Federal Circuit reversed and reinstated the jury verdict.
The issue at hand in this case is whether or not there is the ability for the concept of divided infringment can still hold a single entity liable for the infringement.
The Federal Circuit explains that direct infringement “occurs where all steps of a claimed method are performed by or attributable to a single entity”. However when more than one actor is involved in practicing the steps, a question of divided infringement arises.
When looking at divided infringement, the Court must looking to see if the acts of one actor is attributable to one single entity. In order to determine whether an entity is responsbile for others’ performance of methods, the court looks at two factors: “(1) where the entity directs or controls others’ performance, and (2) where the actors form a joint enterprise.
The Court further elaborated that, liability of an entity for others’ performance occurs under two circumstances: “(1) where that entity directs or controls others’ performance, and (2) where the actors form a joint enterprise”
Previously, courts have held actors liable under §271 (a) if it acts through an agent or contract with others to peform steps of a claimed method. However, the Federal Circuit now is stating that under § 271(a), liability “can also be found when an alleged infringer 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 the event this occurs, the third party’s actions are attributed to the alleged infringer and becomes the single actor of direct infringement. This determination of control of acts of other parties is a question of fact.
In terms of a joint enterprise, all actors can be charged with the acts of the other as if they are a single actor. In determining if a joint enterprise exists, the Court looks to see if there is: “(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.”
The court states that Section 271(a) is not limited solely to principal-agent relationships, contractual arrangements, and joint enterprise, as the vacated panel decision held. Rather, to determine direct infringement, whether all method steps can be attributed to a single entity should be considered.
In this case, it was agreed by the parties that Limelight’s customers performed the “tagging” and “serving” steps in the claimed methods. However, there was substantial evidence that Limelight controlled it’s customers performance in every other remaining method step, making all steps attributable to Limelight..customer use of its content delivery network upon its customers’ performance of the tagging and serving steps, and that Limelight establishes the manner or timing of its customers’ performance.