CAFC on induced infringement

In an en banc decision released today, a majority of  the U.S. Court of Appeals for the Federal Circuit held it is “not necessary to prove that all the steps [of direct patent infringement] were committed by a single entity” when determining induced infringement of method claims.

The decisions Akamai Tech. v. Limelight Networks and McKesson Technologies Inc. v. Epic Systems Corporation, related to patent infringement actions where the defendant was alleged to have induced others but no single party did the direct infringement:

When a single actor commits all the elements of infringement, that actor is liable for direct infringement under 35 U.S.C. § 271(a). When a single actor induces another actor to commit all the elements of infringement, the first actor is liable for induced infringement under 35 U.S.C. § 271(b). But when the acts necessary to give rise to liability for direct infringement are shared between two or more actors, doctrinal problems arise. In the two cases before us, we address the question whether a defendant may be held liable for induced infringement if the defendant has performed some of the steps of a claimed method and has induced other parties to commit the remaining steps (as in the Akamai case), or if the defendant has induced other parties to collectively perform all the steps of the claimed method, but no single party has performed all of the steps itself (as in the McKesson case). [page 9]

The majority conclusion reversed earlier cases which had held that no remedy existed where separate parties carry our portions of the claimed steps. The court explicitly did not address whether direct infringement can be found when no single entity performs all of the claimed steps and limited its holding to induced infringement. The court noted that induced infringement requires the infringer to “act with knowledge that the induced acts constitute patent infringement”[p14] but does require that actual infringement occur.

Two dissenting opinions were authored, one by Justice Linn, Dyk, Prost and O’Malley and one by Justice Newman.

Denis Crouch has further analysis of this decision on Patently-O.