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Federal Circuit Revisits Law On Divided Infringment In Akamai En Banc

On August 13, 2015, the Federal Circuit issued an en banc decision in Akamai Technologies, Inc. v. Limelight Networks, Inc., on remand from the Supreme Court which had suggested that the Federal Circuit revisit the § 271(a) question of direct infringement in connection with induced infringement under § 271(b).

The unanimous Federal Circuit opinion (minus judges Taranto, Chen and Stoll, who did not participate) held that in divided infringement situations where not all of the acts are actually being performed by the alleged direct infringer, the question is “whether all method steps can be attributed to a single entity.”

We conclude, on the facts of this case, that liability under § 271(a) 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. Cf. Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 930 (2005) (stating that an actor “infringes vicariously by profiting from direct infringement” if that actor has the right and ability to stop or limit the infringement). In those instances, the third party’s actions are attributed to the alleged infringer such that the alleged infringer becomes the single actor chargeable with direct infringement. Whether a single actor directed or controlled the acts of one or more third parties is a question of fact, reviewable on appeal for substantial evidence, when tried to a jury.

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Alternatively, where two or more actors form a joint enterprise, all can be charged with the acts of the other, rendering each liable for the steps performed by the other as if each is a single actor. See Restatement (Second) of Torts § 491 cmt. b (“The law . . . considers that each is the agent or servant of the others, and that the act of any one within the scope of the enterprise is to be charged vicariously against the rest.”). A joint enterprise requires proof of four elements:

(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.

Id. § 491 cmt. c.

The Federal Circuit concluded that Section 271(a) is not limited solely to principal-agent relationships, contractual arrangements, and joint enterprises, and that it would “consider whether all method steps can be attributed to a single entity” to determine direct infringement