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U.S. Supreme Court Makes It Easier To Avoid Method Patents Requiring Multiple Actors

On June 2, 2014, the United States Supreme Court unanimously held that a defendant was not liable for inducing infringement of a patented method where there is no direct infringement because the method steps are “divided” between the defendant and its customers. See Limelight Networks, Inc. v. Akamai Technologies, Inc., No. 12–786. The Court was reviewing a 6-5 en banc decision from the Court of Appeals for the Federal Circuit that held a party might be liable for inducing infringement under 35 USC 271(b) where a defendant carried out some steps and encouraged others (such as its customers) to carry out the remaining steps. In other words, the performance of the method steps was divided between a party and its customers, so the party could be liable for inducing the performance of the remaining steps it did not perform itself.  The Supreme Court reversed and remanded the judgment against Limelight, reasoning that there could be no liability for inducing infringement if no party directly infringed. 

The Supreme Court relied on a prior decision by the Federal Circuit that there is no direct infringement of a method claim unless a single party performs every step of a claimed method or exercises “control or direction” over the entire process such that every step is attributable to that party. See Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318, 1329 (Fed. Cir. 2013). Muniauction held that there was no direct infringement of a patented method when its distinct steps were performed by “mere arms-length cooperation” between parties. In Limelight, the Supreme Court “assumed” that Muniauction’s holding was correct but observed that the Federal Circuit could revisit it when the Limelight decision was remanded.

Both Limelight and Muniauction involved client-server scenarios for web-based businesses and cloud-based application services, but this decision has broad implications across a variety of fields, such as personalized or precision medicine.  For example, a patented method directed to diagnosing and treating a disease would not be infringed where a laboratory provides the diagnosis and the treating physician does not exercise “control or direction” over the steps performed by the laboratory.  

Until Muniauction is further defined, the Court has returned the law to its state prior to the Federal Circuit’s Akamai holding, where liability turned on whether a single infringer exhibited sufficient “control or direction” over steps performed by others; if not, no one is liable for patent infringement.  For would-be infringers, this potentially provides a useful defense.  For patent applicants, it is a reminder to draft method claims in a manner such that all actions can be taken by a single entity.

© 2019 Neal, Gerber & Eisenberg LLP.

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Michael Harlin, Patent, Attorney, Neal Gerber Law firm
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Michael B. Harlin helps clients protect their complex technologies and innovations through representation on all aspects of patent law, including patent counseling, advice and prosecution, transactions, contested proceedings, and opinion preparation. He has represented clients in diverse fields such as pharmaceuticals, biologics, regenerative medicine, ophthalmological treatments, solid state analytical techniques, skin care products, renewable fuels, polymer manufacture and uses, and health foods.

Mike is registered to practice before the U.S. Patent and Trademark Office and has...

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James P. Muraff, Intellectual Property & Technology Transactions attorney, Neal Gerber law firm
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James P. Muraff’s practice involves all aspects of intellectual property, such as domestic and foreign patents, trademarks, copyrights, trade secrets and unfair competition, including counseling, investigations, transactions, prosecution and litigation, with a primary focus in the computer hardware and software, electronics, and Internet technologies.

Jim is regularly involved with software and Internet clients for transactional, licensing, clearance, and general intellectual property law counseling. Jim’s practice also includes significant litigation experience involving various technologies in patent, trademark, unfair competition, copyright and trade secret cases within federal courts, a representative list of which is set forth below. He has been involved with all of the related aspects of these cases, such as discovery and discovery motions, as well as numerous motions for summary judgment, motions to dismiss, and trial preparation. Several of these cases have included foreign parties and international issues.

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Kevin A. O’Connor, Intellectual Property & Technology Transactions attorney, Neal Gerber law firm
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Kevin O’Connor has represented clients in all aspects of patent law, including patent prosecution, strategic management of patent portfolios, due diligence investigations for acquisitions and mergers, freedom to operate investigations, interference practice and litigation. Kevin’s work has encompassed a broad spectrum of technologies in the biotechnological, pharmaceutical and medical device arts, including therapeutic antibodies and peptides, small molecules, and nucleic acids such as silencing RNAs and their use in treating conditions such as autoimmune diseases, pain, cancer and...

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Mike R. Turner, Intellectual Property & Technology Transactions attorney, Neal Gerber law firm
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Mike R. Turner represents clients across a broad spectrum of intellectual property disciplines, including the procurement, analysis, and enforcement of utility and design patents, trademarks, copyrights, and other forms of intellectual property. A registered patent attorney, Mike has created and continues to manage global patent and trademark portfolios for several firm clients. He has obtained allowance for numerous utility patents across various technical disciplines, including the mechanical, electrical, computer science, and “business method” arts.

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