Justices cautious in oral arguments of Limelight case

Case could alter the definitions of direct and indirect infringement…or not

Of all the various cases —IP related or otherwise — reviewed by the United States Supreme Court in the twilight of its 2013-2014 session, Limelight Networks, Inc. v. Akamai Technologies, Inc. is perhaps the most vexingly complicated and difficult to wrap one’s head around. That frustration seemed evident in the Justice’s comments following the oral arguments for the case on Tuesday. Despite the complexities the case could still have deep implications on the nature of IP claims involving more than one party.

At the heart of the issue are the concepts of direct and indirect infringement. In the original case, Akamai accuses Limelight networks of violating one of its patents; however, because part of the patented method required another action performed by another party to complete it, it could not be considered direct infringement. The second party in question was the end-users of the service.

Under the Patent Act, there are two subsections that Akamai could have brought the initial suit under.

In his blog post on the topic, Ronald Mann of SCOTUSblog summarizes the two.“ Subsection (a) deals with direct infringement and imposes almost strict liability; all agree that this can cover some cases when the steps of a patented method are taken by more than one person – the provision extends at least to parties in a principal/agent relationship. Subsection (b), by contrast, provides for ‘induced’ infringement, when one party induces another to ‘infringe,’ and results in a somewhat lower standard of liability.”

While Akamai brought suit against Limelight under both of these subsections, it went to court only under subsection a, the issue has since blossomed to involve questions about both. The initial jury ruled in favor Akamai, but the Federal Circuit then vacated that decision and granted rehearing en banc. During that hearing, a split Federal court decided that the case was not an incident of patent violation under subsection (a) but rather a matter of induced infringement under subsection (b), eventually deciding to hold Limelight liable.

“Confronted with that fact they agreed they didn’t have any direct infringement, but they said ‘because we can see her that it’s possible that 3 parties in aggregate might be infringing on the patent holder, we need to hold a party responsible for actively inducing,’” says Bob Fischer, partner and chairman of the licensing and transactions group, Fitzpatrick, Cella, Harper & Scinto LLP

But Supreme Court Justices, at least in their initial audience on the issue, did not seem to agree, making comments that indicated they felt the Federal Court went too far in filling in the gaps of a policy. Justices also aired concerns about involving end users.

Fischer says,” from a commercial standpoint, the case is important given the proliferation in recent years of e-commerce conducted by multiple parties over the Internet.  But it is also important from a legal standpoint, since it raises a recurring question on which the Federal Circuit and the Supreme Court arguably hold different views, namely the extent to which the Federal Circuit is empowered to ‘fill in the gaps’ that it perceives in the patent laws enacted by Congress.”

Ultimately, Fischer feels that the case will result in a policy change, rather than serviceable case law for similar issues going forward.

“That is a recurring theme from the Supreme Court,” Fischer says. I would expect that to happen, but there are still concerns around throwing this case out, and questions on whether the case can get around the SCOTUS without changing the law of direct infringement.”

We’ll bring you more as the case develops. 

For more on intellectual property law see these stories:

Octane, Highmark cases to impact future of fee shifting

Nautilus v. Biosig case could have serious ramifications in the patent space

Pivotal Supreme Court case could expand unwarranted cellphone searches

 

 

 

 

 

 

Managing Editor

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Chris DiMarco

Chris DiMarco, Managing Editor of InsideCounsel magazine, has a background in multimedia production with previous involvement in projects in which he developed and created content for...

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