A Federal Circuit decision in late August has given patent trolls a new, potentially devastating weapon to extract license fees, This weapon that will likely be aimed squarely at companies with a heavy Internet and software-technology focus. In the cases Akamai Tech. v. Limelight Networks and Mckesson Tech. v. Epic Systems, the court ruled en banc that a single party no longer needs to practice all steps of a patented method claim in order to be found liable for indirect infringement. The 6-5 decision narrowly overturned the previous rule, known as the “Joint Infringement Defense,” in the context of indirect infringement based on inducement. As the per curiam opinion put it: “To be clear, we hold that all the steps of a claimed method must be performed in order to find induced infringement, but that it is not necessary to prove that all the steps were committed by a single entity.”
The Federal Circuit was careful to explain that its holding applies only to a “knowing” inducer and expressly declined to apply its decision to “strict liability” direct infringement. Nonetheless, the decision will likely have a sweeping impact. Patent holders that previously would have been forced to focus on perhaps less-than-perfect direct infringement claims will now likely repackage their cases to target inducement. In this manner, the holding provides patent plaintiffs with a potential path around the Joint Infringement Defense, which had been a thorn in their side since the Federal Circuit established it.