In the Limelight: Induced Infringement Issues Retakes Center Stage

On April 30, 2014, the Supreme Court heard oral arguments in Limelight Networks, Inc., v. Akamai Technologies, Inc., et al., No. 12-786. We previously reported on the Federal Circuit’s twin en banc opinions in Akamai Techs., Inc. v. Limelight Networks, Inc., and McKesson Techs. Inc. v. Epic Sys. Corp., 692 F.3d 1301 (Fed. Cir. 2012), finding inducement under 35 U.S.C. § 271(b) even when a single actor was not liable for direct infringement. Both Limelight and Epic petitioned the Supreme Court for review, but the Epic case subsequently settled.

At oral argument, the justices appeared conflicted on the scope of the infringement issues to address; specifically, whether to only evaluate induced infringement under § 271(b), or to expand the discussion to include a determination of what common law attribution rules apply to a direct infringement analysis under § 271(a). In regard to § 271(b), the justices were concerned that a ruling favoring Limelight’s position — inducement limited to direct infringement by a single actor — could make it easier for parties to deliberately circumvent patent protection. Conversely, the justices were also concerned that an affirmation of the Federal Circuit’s more expansive view of liability under § 271(b), as advocated by Akamai, could unleash a surge of new patent lawsuits.

Several technological companies, including Google Inc., Microsoft Corp., Cisco Systems Inc., and Oracle Corp., filed amici briefs in support of Limelight’s position, motivated by the concern that if the Federal Circuit’s decision stands, companies in the tech sector would have a higher level of exposure to patent infringement lawsuits. The Obama administration also supports Limelight’s position, advocating that it is up to Congress, not the courts, to change the patent laws, and further warning that a more expansive ruling would stifle innovation.

In support of the broader interpretation advocated by Akamai, several medical and life sciences companies and groups, including Myriad Genetics Inc, Eli Lilly and Co., and Pharmaceutical Research and Manufacturers of America, filed amici briefs arguing that a strong patent system is necessary to encourage pharmaceutical investment and innovation toward the continued development of life-saving products and treatments.

Gibbons will continue to monitor developments in this case. A decision is expected in June.

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