Supreme Court: Federal Circuit got §271(b) wrong and maybe §271(a) as well.

At its heart the Internet is an information distribution network and the ease with which all manner of information can be shared instantly has led to numerous innovative methods of doing, well, most anything. A hallmark of patents on such methods is that the various steps are carried out by multiple actors as information is passed around the Internet. Often the actors between which the steps of the patented method are divided have only the most tenuous connection with one another. In a case that is reshaping our understanding of what it means to infringe a method patent in the digital age, the Supreme Court reversed the Federal Circuit’s ruling on such divided infringement in Limelight Networks v. Akamai Tech.

Hearing Akamai in 2012, the Federal Circuit sitting en banc found itself hemmed in by clear Supreme Court precedent that there can be no indirect infringement (i.e., contributory infringement or inducement of infringement) of a method claim without there first having been a direct infringement, and also by its own precedent in Muniauction that a method claim is only directly infringed under §271(a) when a single actor can be charged with performing each step of the asserted claim. However, rather than find that liability for indirect infringement first requires a direct infringement §271(a), the Federal Circuit concluded that only some undefined garden-variety direct infringement is needed to support a claim for indirect infringement, one that does not include the single actor requirement of §271(a).

Wrong said the Supreme Court. Indirect infringement under §271(b) first requires a direct infringement under §271(a) – single actor requirement and all. The Supreme Court criticized the Federal Circuit’s ruling for creating what would have been a two-track system that defined direct infringement differently for liability under direct and indirect theories. Such a system would, according to the Court, deprive the lower courts of “an ascertainable standard” as when a patent holder’s rights have been violated. The Supreme Court acknowledged the Federal Circuit’s concern that imposing the single actor requirement of direct infringement under §271(a) on claims for indirect infringement under §271(b) would allow “a would-be infringer” to evade liability “by dividing performance of a method patent’s steps with another whom the defendant neither directs nor controls.” This risk, however, stems not from §271(b), but from the Federal Circuit’s interpretation of §271(a) in Muniauction which the Supreme Court invited the lower court to revisit if it saw fit. If it does, do not be surprised if the case comes back to the Supreme Court on that issue. In the mean time, know that indirect infringement of a patented method requires underlying direct infringement under §271(a).