Further to my earlier blog on the topic, Patent Infringement for Inducement by More Than a Single Entity? Still in Play, the U.S. Supreme Court handed down a unanimous decision in the long-awaited Limelight Networks, Inc. v Akamai Technologies, Inc. case today. The Supreme Court took another hard swipe at the Federal Circuit Court of Appeals, which had previously determined that a party could induce infringement of a patent even if that party did not itself perform every step of the claim. The Supreme Court held that position was erroneous and that infringement by inducement (35 U.S.C. 271(b) requires that a single party perform every step of the claim.
The technology at issue in the Akamai case is U.S. Patent No. 6,108,703 (and entitled Global Hosting System) is directed to a method of delivering electronic data using a content delivery network or CDN. Petitioner Limelight Networks operated a CDN and carries out several of the steps claimed in the patent at issue. But Limelight requires its customers to do their own tagging of components to customer’s websites that Limelight intends to store on its servers. Akamai argued that Limelight’s instructions and technical assistance to its customers how to tag constituted inducement. The record was undisputed that Limelight did not tag the components to be stored on its servers. Thus, Limelight did not perform all steps of the asserted claim and there could be no infringement by inducement under Section 271(b).
As a practical matter, Akamai and the Massachusetts Institute of Technology, as the assignee of the asserted patent, were the big losers in this case. However, there are likely many other patent owners that have suspect patent portfolios—particularly in the computer software/business methods technologies. This is good news for would-be patent infringement defendants and bad news for patent owners. For patent portfolio owners, this is a good time to conduct an audit on your portfolio assets.