Earlier this month, in Limelight Networks, Inc. v. Akamai Technologies, Inc., the Supreme Court issued a decision that will likely impact patents directed to methods for treating or diagnosing diseases. In Limelight Networks, the Court reversed the appellate court’s finding that Limelight had infringed U.S. Patent No. 6,108,703, which is assigned to the Massachusetts Institute of Technology and is exclusively licensed to Akamai Technologies. In particular, the Court determined that a defendant is not liable for inducing infringement of a patent when no one has directly infringed the patent.
The ‘703 patent does not involve a biotech invention, but rather is directed to a method of delivering electronic data using a content delivery network (“CDN”) in which certain components of a content provider’s website are designated (or “tagged”) for storage on a server and access from the server by internet users. Limelight operates a CDN and carries out several steps of the claimed method of the ‘703 patent, but instead of tagging components itself, requires its customers to do their own tagging.
At trial, a jury found that Limelight infringed the ‘703 patent and awarded Akamai $40 million in damages, but the District Court determined that Limelight was not liable for infringement because infringement required that Limelight carry out the tagging or control or direct its customers’ tagging and Limelight did neither. On appeal, a Federal Circuit panel affirmed, but following en banc review by the appellate court, concluded that the evidence could support a judgment in Akamai’s favor on a theory of induced infringement. The en banc court explained that liability for induced infringement could arise when a defendant carries out some steps of a claimed method while encouraging others to carry out the remaining steps – i.e., by doing something less than controlling or directing others to carry out the remaining steps.
The Supreme Court, however, disagreed. Writing for a unanimous Court, Justice Alito noted that “our case law leaves no doubt that inducement liability may arise ‘if, but only if, [there is] . . . direct infringement.'” While “[o]ne might think that this simple truth is enough to dispose of this appeal,” Justice Alito indicated that the Federal Circuit reasoned that a defendant could be liable for inducing infringement even if no one had committed direct infringement. He noted that in the instant case, however, “there has simply been no infringement of the method [of the ‘703 patent], because the performance of all the patent’s steps is not attributable to any one person,” and “where there has been no direct infringement, there can be no inducement of infringement.” Justice Alito also explained that based on another infringement provision in the Patent Act, it was clear that “when Congress wishes to impose liability for inducing activity that does not itself constitute direct infringement, it knows precisely how to do so,” and he declared that “[t]he courts should not create liability for inducement of noninfringing conduct where Congress has elected not to extend that concept.”
The Supreme Court’s decision has implications for biotech patent claims. Had the Court agreed with the en banc appellate court, biotech applicants wishing to protect diagnostic methods would have had another claim drafting tool at their disposal. Diagnostic method claims, which came under attack two years ago when the Supreme Court decided Mayo Collaborative Services v. Prometheus Laboratories, Inc., could have been rewritten to include, for example, a treatment step. In view of the Supreme Court’s Limelight decision, however, such revised claims will be difficult to enforce because the actors – the testing lab and treating physician – are unlikely to be under each other’s control. Biotech applicants will therefore have to look for other ways to rehabilitate their diagnostic method claims.
A more comprehensive analysis of this decision can be found on the Patent Docs weblog (http://www.patentdocs.org/).
Donald Zuhn is a partner at McDonnell Boehnen Hulbert & Berghoff LLP and has more than a decade of experience in all aspects of patent prosecution, litigation, counseling and licensing. He represents a variety of clients, including biotechnology and pharmaceutical companies both large and small, and universities. He is also a founding author of the Patent Docs blog where he writes frequently.