“Limelight v. Akamai”Decision of the Supreme Court 2 June 2014 – Case No. 12-786

The Federal Circuit held in Muniauction that a method’s steps have not all been performed as claimed by the patent (§271(a)) unless they are all attributable to the same defendant, either because the defendant actually performed those steps or because he directed or controlled others who performed them. See 532 F.3d, at 1329–1330. Assuming without deciding that the Federal Circuit’s holding in Muniauction is correct, there has simply been no infringement of the method in which respondents have staked out an interest, because the performance of all the patent’s steps is not attributable to any one person.The Federal Circuit concluded that the “evidence could support a judgment in [the respondents’] favor on a theory of induced infringement” under §271(b). 692 F.3d 1301, 1319 (2012) (per curiam). This was true, the court explained, because §271(b) liability arises when a defendant carries out some steps constituting a method patent and encourages others to carry out the remaining steps – even if no one would be liable as a direct infringer in such circumstances, because those who performed the remaining steps did not act as agents of, or under the direction or control of, the defendant. The Court of Appeals did not dispute that “there can be no indirect infringement without direct infringement,” id., at 1308, but it explained that “[r]equiring proof that there has been direct infringement … is not the same as requiring proof that a single party would be liable as a direct infringer,” id., at 1308–1309.Where there has been no direct infringement, there can be no inducement of infringement under §271(b). The Federal Circuit’s contrary view would deprive §271(b) of ascertainable standards. The Federal Circuit seems to have adopted the view that Limelight induced infringement on the theory that the steps that Limelight and its customers perform would infringe the ’703 patent if all the steps were performed by the same person. But we have already rejected the notion that conduct which would be infringing in altered circumstances can form the basis for contributory infringement, and we see no reason to apply a different rule for inducement. Performance of all the claimed steps cannot be attributed to a single person, so direct infringement never occurred. Limelight cannot be liable for inducing infringement that never came to pass.Respondents, like the Federal Circuit, criticize our interpretation of §271(b) as permitting a would-be infringer to evade liability by dividing performance of a method patent’s steps with another whom the defendant neither directs nor controls. We acknowledge this concern. Any such anomaly, however, would result from the Federal Circuit’s interpretation of §271(a) in Muniauction. A desire to avoid Muniauction’s natural consequences does not justify fundamentally altering the rules of inducement liability that the text and structure of the Patent Act clearly require – an alteration that would result in its own serious and problematic consequences, namely, creating for §271(b) purposes some free-floating concept of “infringement” both untethered to the statutory text and difficult for the lower courts to apply consistently. Our decision on the §271(b) question necessitates a remand to the Federal Circuit, and on remand, the Federal Circuit will have the opportunity to revisit the §271(a) question if it so chooses.