Post by John Golden
In June, I posted on a court opinion in Akamai Technologies, Inc. v. Limelight Networks, Inc. In this opinion, a panel of the U.S. Court of Appeals for the Federal Circuit invoked common law limits on joint tortfeasor liability to justify a narrow view of “divided infringement” as a form of direct infringement under § 271(a) of the U.S. Patent Act. Generally speaking, potential “divided infringement” situations are ones in which two or more actors split between themselves the performance of acts that, if performed by one, would constitute direct infringement. Realities of our networked world have intensified concerns with how to handle such situations—particularly for computer technologies for which it is relatively easy to distribute performance of process steps across different entities and locations.
This update comes because, on August 13, the Federal Circuit turned the double play of (1) vacating its earlier panel opinion and granting a petition for rehearing en banc, and (2) issuing a precedential and unanimous per curiam opinion taking a broader view of § 271(a). The court held that, for purposes of § 271(a), “an entity [is] responsible for others’ performance of method steps in two sets of circumstances: (1) where that entity directs or controls others’ performance, and (2) where the actors form a joint enterprise.” To define the scope of direction or control sufficient under § 271(a), the court invoked “general principles of vicarious liability” even while conceding that vicarious liability is “not a perfect analog.” The court stated that sufficient direction or control can occur when a party (1) “acts through an agent (applying traditional agency principles)”; (2) “contracts with another to perform one or more steps of a claimed method”; or (3) “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.” The court quoted comment c of § 491 of the Restatement (Second) of Torts for the required elements of a joint enterprise: “(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 also embraced a fact-specific approach to applying its tests, noting that questions of “direction or control” and “joint enterprise” are questions of fact and emphasizing that, beyond the particular facts of Akamai, “other factual scenarios may arise which warrant attributing others’ performance of method steps to a single actor.”
Will the U.S. Supreme Court now take a second swing at Akamai? In interpreting the U.S. Patent Act, is the Federal Circuit drawing proper inspiration from common law? Assuming there is a petition for certiorari, readers with answers to the second question might want to participate by amicus brief in resolution of the first.