United States: Expansion Of Direct Infringement In Federal Circuit's Akamai Decision A Big Win For Patent Holders

Last Updated: August 18 2015
Article by Nathan Monroe-Yavneh

In a victory for holders of method patents, the Federal Circuit issued an en banc decision yesterday expanding the scope of direct infringement when multiple parties perform different steps of an invention. In its unanimous Akamai Techs. v. Limelight Networks decision, the appeals court provided a fact-based test for determining when "all method steps can be attributed to a single entity" such that direct infringement can be found under 35 U.S.C. § 271(a). Unlike the earlier panel decision that was overturned, the en banc court held that infringement can, in some circumstances, be attributed to a single entity even when there is an arms-length business relationship between that entity and the other parties that perform steps of the patented method.

Akamai addresses the question of "divided infringement," which occurs when multiple parties combine to perform all the steps of a method patent. Akamai, for example, holds a patent covering a method of streaming content over the internet. Limelight, Akamai's competitor, offers a service performing every step of Akamai's patent except the final "tagging" step, which Limelight's customers perform. The term "divided infringement" is something of a misnomer, however, because it has long been established that direct infringement under Section 271(a) occurs only when a single party or a joint enterprise performs all of the steps of the process. Thus, the real question in divided infringement cases is whether the entities practicing the claimed steps are somehow united. A "court must determine whether the acts of one [actor] are attributable to the other such that a single entity is responsible for the infringement," as the Federal Circuit put it in its most recent Akamai decision. This question – of prime importance to industries like biotechnology and software that rely heavily on method patents – has vexed courts and litigators for the last decade.

The dispute between Akamai and Limelight raises the particularly complicated issue of whether a company and its end users can be considered a single entity for purposes of divided infringement. In the original appeal, the Federal Circuit (also en banc) ducked this question and held that Limelight could be held liable for induced infringement irrespective of whether the patented method could be attributed to a single entity for purposes of direct infringement. The Supreme Court, however, granted certiorari and held that a defendant cannot be liable for induced infringement under Section 271(b) unless a single party has directly infringed under Section 271(a). On remand, therefore, the Federal Circuit had to address the question of direct infringement that it had previously avoided.

Initially, in May of this year, a panel of the Federal Circuit held (over a vigorous dissent) that Limelight was not responsible for direct infringement. The panel concluded that Section 271(a) was limited to three relationships between the divided infringers: principal-agent relationships, joint enterprises, and contractual arrangements, which would "typically not be present in an arms-length seller-customer relationship." This decision, coupled with the Supreme Court's opinion on induced infringement, appeared to enable companies to avoid any method patent simply by arranging for their customers or another arms-length entity to perform at least one of the claimed steps.

In yesterday's en banc decision, however, the Federal Circuit relaxed this test to allow a finding of direct infringement in a wider range of circumstances, including the facts of the Akamai-Limelight dispute. Noting that "we continue to consider general principles of vicarious liability" in assessing divided infringement, the court held that "liability under § 271(a) can also be found when an alleged infringer conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the method or timing of that performance." When this occurs, "the third party's actions are attributed to the alleged infringer such that the alleged infringer becomes the single actor chargeable with direct infringement" – even if the third party and the alleged infringer otherwise have an arms-length relationship. The court also laid out a four-element test for when entities have formed a joint enterprise, such that the acts of either may be attributed to the other. In sum, the Federal Circuit set out what appears to be a flexible, fact-specific standard that uses traditional tort liability principles to determine "whether all method steps can be attributed to a single entity."

Though Akamai and the cases that preceded it arose in the software context, the decision has significant implications for the biotechnology industry. Method patents are often the primary intellectual property associated with biologic medicines, much more so than for small molecule drugs. As the Biotechnology Industry Organization (BIO) notes in an amicus brief it filed in the Akamai case, "[p]roprietary biotechnological processes, and method patents protecting them, often are a biotechnology company's most valuable assets." Because multiple entities can perform the steps of a single patent, the ability to legally attribute their acts to one "mastermind" infringer makes a biotechnology company's patent portfolio much more secure.

BIO's brief contains an example of how divided infringement might work in the biotechnology context. The "foundational" invention of biotechnology is the ability to cut DNA out of one organism and splice it into the genome of another, thereby creating recombinant DNA. This invention is the subject of U.S. Patent No. 4,237,224. The '224 patent calls for, in essence, a four-step process: (1) creating a fragment of DNA; (2) combining that fragment with another in a unicellular organism; (3) growing that organism with the recombinant fragment; and (4) isolating the bacteria that contain the novel DNA. According to BIO, this patent "launched an industry." Without some form of vicarious liability, however, this patent "could easily be circumvented by having one party perform steps (1) and (2) of the patented method and then having another party perform the remaining steps (3) and (4)." Many biotech processes can be similarly split between different entities, making divided infringement a concern for biologic patents.

Method patent holders may be able to breathe a little easier following the Akamai decision, likely the last in a case that sprawled over almost a decade and included a trip to the Supreme Court. Limelight, on the other hand, was not so lucky: the Federal Circuit decision reinstated a $45 million jury verdict against it.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions