Court Clarifies Liability for Induced Infringement

September 11, 2012 | Intellectual Property News

The Court of Appeals for the Federal Circuit recently addressed whether a party may be liable for patent infringement when two different parties combine to perform the acts necessary for patent infringement, but where neither party separately performs all of the steps required to infringe a patent.

As the Court explained, the problem of divided infringement most commonly occurs with respect to method patents in which the claims of the patents require the performance of several distinct steps in order to infringe. In such cases, parties may arrange their activities such that each of them performs one or more of the patented steps, but neither of them individually performs all of the required steps. The court had previously interpreted the patent statute to mean that unless an accused infringer either performs all of the steps by itself, or directs or controls the actions of the parties performing the steps, there would be no infringement even if all of the requirements of the patent had been met.

In reaching this decision, the Court evaluated two different patents in two different lawsuits that were consolidated for appeal. In one case the patent related to a method for delivery of web content over the internet; in the other case it related to a method of electronic communications between healthcare providers and their patients. In both instances, the patent owner alleged that the defendants may not have performed all the steps of the patent, but induced others to perform steps such that the combination resulted in infringement.

According to the patent statutes, one who actively induces infringement of a patent is liable as an infringer. In general, “active inducement” would include actions to advise, encourage, or cause others to engage in the infringing conduct. Importantly, the law requires proof that the accused inducer acted with knowledge that the induced acts constitute patent infringement. This is a key difference between induced infringement and direct infringement in that one may directly infringe a patent even without prior knowledge of the patent. This knowledge and intent requirement means that one should not be liable for inducing infringement merely by performing a step in a patent that is combined with steps performed by others to unwittingly infringe a patent.

Prior to this decision, induced infringement required proof of an underlying direct infringement, which had to be committed by a single entity. As such, one could only be liable for inducing infringement by urging or advising another party to commit the act of infringement, and further where that other party performed all of the acts necessary to constitute infringement. This previous understanding of the law was sufficiently resolved that the Court was closely divided in making its ruling, with six judges voting with the majority and five judges dissenting.

The Court specifically limited its decision to the question of induced infringement, rather than the question of direct infringement, although the distinction may ultimately make no difference. The ultimate ruling of the Court is that all of the steps of a patent must be performed to find induced infringement, but that it is not necessary to prove that all of the steps were committed by a single entity.  Consequently, a party is liable for induced infringement if it is proven that it knew about the patent and induced another to perform at least a part of the requirements of the patent, so long as all of the patented steps are performed by some combination of the parties together.

Read the full decision, Akamai Tech. v. Limelight Networks, at Opinion