Joint Patent Infringement Following Akamai

• Author: Nathaniel Grow
• Published date: 01 March 2014
• DOI: http://doi.org/10.1111/ablj.12025
• Date: 01 March 2014

Joint Patent Infringement

Following Akamai

Nathaniel Grow*

INTRODUCTION

The Patent Act of 1952 (Patent Act)1is fundamentally designed to address

acts of infringement by a single party.2Under the existing statutory frame-

work, a violation of the direct infringement provision of the Patent Act,

section 271(a), generally requires that one party complete each step of an

asserted patent claim.3Meanwhile, the provisions governing indirect

patent infringement, under which a party may be liable for contributing

to, or inducing, another’s infringement, have also historically required an

*Assistant Professor of Legal Studies, Terry College of Business, University of Georgia. I

thank Lara Grow and Brian Koide for supplying helpful comments incorporated in this

article.

1Patent Act of 1952, 35 U.S.C. § 271(a) (2010).

2See Alice Juwon Ahn, Note, Finding Vicarious Liability in U.S. Patent Law: The “Control or

Direction” Standard for Joint Infringement,24BERKELEY TECH. L.J. 149, 149 (2009) (“The Patent

Act is designed to address infringement claims that are primarily based on the actions of a

single actor.”); Mark A. Lemley et al., Divided Infringement Claims, 33 AIPLA Q.J. 255, 256

(2005) (noting that patent law is “designed to deal with the circumstance of unified infringe-

ment by a single actor”). See also Ben Morgan, Joint Infringement and the Impact of BMC

Resources, Inc. v. Paymentech, L.P., 12 SMU SCI.&TECH.L.REV. 173, 198 (2009) (“Section

271 of the Patent Act functions well when a single defendant performs every element of a

patented claim.”).

3See Akamai Techs., Inc. v. Limelight Networks, Inc., 692 F.3d 1301, 1307 (Fed. Cir. 2012)

(“This court has held that for a party to be liable for direct patent infringement under 35

U.S.C. § 271(a), that party must commit all the acts necessary to infringe the patent, either

personally or vicariously.”)(citing Cross Med. Prods., Inc. v. Medtronic Sofamor Danek, Inc.,

424 F.3d 1293, 1311 (Fed. Cir. 2005); Fromson v. Advance Offset Plate, Inc., 720 F.2d 1565,

1568 (Fed. Cir. 1983)). Some commentators have dubbed this requirement the “single entity

rule.” See, e.g., W. Keith Robinson, No “Direction” Home: An Alternative Approach to Joint

Infringement,62A

M.U.L.REV. 59, 63 (2012).

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American Business Law Journal

Volume 51, Issue 1, 71–117, Spring 2014

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American Business Law Journal © 2014 Academy of Legal Studies in Business

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underlying act of direct infringement by a single actor.4Thus, before a

party could be held liable for direct, contributory, or induced infringe-

ment, a patentee traditionally had to prove that someone performed each

step of the asserted patent claim herself (either directly or vicariously).

Until relatively recently, the Patent Act’s focus on the actions of a

single party worked quite well, as any direct infringement almost invari-

ably arose from the activities of one actor working alone.5Recent techno-

logical advances have presented challenges to this traditional framework,

however, as the development of the Internet has allowed individuals to

easily coordinate their activities remotely via networked computers.6This

innovation has had a significant impact on patent law, and its application

to the e-commerce and telecommunications fields in particular, as many

patented processes are now increasingly susceptible to being divided

among multiple actors working together across a computer network.7

As a result, over the past decade, patentees have increasingly filed

so-called divided or joint patent infringement lawsuits, alleging direct

infringement under section 271(a) through the combined actions of two or

4Specifically, 35 U.S.C. § 271(b) governs induced infringement, while 35 U.S.C. § 271(c)

governs contributory infringement. See Lynda J. Oswald, International Issues in Secondary

Liability for Intellectual Property Rights Infringement,45A

M.BUS. L.J. 247, 257 & nn. 46–47

(2008) (noting same). For more on the traditional requirement that an underlying act of

direct infringement be performed by a single actor before inducement or contributory

liability could arise,see infra Part I.B.

5See Lemley et al., supra note 2, at 271 (noting that with the advent of “an increasingly

outsourced world” patentees must now begin to “pay particular attention to [joint infringe-

ment] issues”).

6See Robinson, supra note 3, at 65 (declaring that “it is the unenviable job of the Federal

Circuit to apply laws crafted in consideration of 1950’s technology to the cutting edge

innovations of today”).

7See Nicole D. Galli & Edward Gecovich, Cloud Computing and the Doctrine of Joint Infringement:

‘Current Impact’ and Future Possibilities,11J.MARSHALL REV.INTELL.PROP. L. 673, 675 (2012)

(stating that joint infringement by multiple actors is a significant issue in cases of patents

covering “cloud computing systems” in which “multiple parties interact[] with multiple

components of a system in a distributed environment”); Stacie L. Greskowiak, Note, Joint

Infringement After BMC: The Demise of Process Patents,41L

OY.U.CHI. L.J. 351, 402 (2010)

(declaring that the use “of multiple entities to carry out a process” is common in “the

technology, communication, and medical industries”); Dolly Wu, Joint Infringement and Inter-

net Software Patents: An Uncertain Future?,91J.P

AT.&TRADEMARK OFF.SOC’Y439, 441 (2009)

(noting that the issue of joint infringement has significant implications for “network and

communication patents”).

72 Vol. 51 / American Business Law Journal

more parties.8In other words, these cases contend that multiple parties

should be held jointly liable for direct infringement even though none of

the defendants have individually performed every step of the patented

claim themselves. Although these cases were quite rare throughout most of

the twentieth century, courts typically resolved them under traditional

notions of vicarious liability, requiring that one of the defendants direct or

control all of the infringing activity in order for a direct infringement to

have occurred.9As incidents of joint infringement became more common,

however, some commentators began to criticize this traditional approach,

alleging that it created a loophole through which parties could enter

arm’s-length agreements to jointly infringe a patent without any legal

liability.10 Meanwhile, other scholars contended that these fears were over-

stated, asserting instead that the traditional standard was justified on

policy grounds insofar as direct infringement is a strict liability offense and

therefore could unfairly ensnare parties who unwittingly participated in

the joint infringement of a patented invention.11

As scholars debated the proper standard for joint infringement cases,

an en banc U.S. Court of Appeals for the Federal Circuit (CAFC or Federal

Circuit) addressed the issue in 2012 by agreeing to hear joint reargument

in the cases of Akamai Technologies, Inc. v. Limelight Networks, Inc. and

McKesson Technologies, Inc. v. Epic Systems Corp.12 The chief purpose of the

rehearing was to decide the following: “If separate entities each perform

separate steps of a method claim, under what circumstances would that

claim be directly infringed and to what extent would each of the parties be

8See Keith Jaasma, Finding the Patent Infringement “Mastermind”: The “Control or Direction”

Standard for Joint Infringement,26S

ANTA CLARA COMPUTER &HIGH TECH. L.J. 411, 429 (2010)

(finding that “the rate at which district courts have decided issues related to ‘joint’ or ‘divided’

infringement has increased significantly” in recent years).

9See infra Part I.C.

10See infra notes 96–98 and accompany text. No indirect infringement liability would arise

when two parties collectively infringed a patent at arm’s length under the traditional

approach, because there was no underlying direct infringement upon which to base a claim

of inducement or contributory infringement.

11See Lemley et al., supra note 2, at 261 (“While these decisions seem unfair at first glance

because they create a right without a remedy, they in fact serve an important policy purpose.

Direct infringement is a strict-liability offense, but it is limited to actually performing all the

steps of a patented process.”). See also infra notes 228–30 and accompanying text.

12See Akamai Tech., Inc. v. Mass. Inst. Tech., 419 F. App’x 989 (Fed. Cir. 2011) (en banc).

2014 / Joint Patent Infringement Following Akamai 73