U.S. Supreme Court

No liability for induced infringement when company and customer split patented steps, SCOTUS says

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A technology company isn’t liable for inducing patent infringement when it performs some steps of a method patent and encourages others to take the remaining steps, the U.S. Supreme Court has ruled.

The court ruled on behalf of Internet services company Limelight Networks in a unanimous opinion (PDF) by Justice Samuel A. Alito Jr.

Limelight was accused of inducing infringement on a patented method of delivering electronic data that involves the hosting of website content, such as video and audio files, in a way that ensures speedy delivery of the content to Internet users. Limelight carried out many of the steps of the patented method. But instead of tagging content of its website customers, one of the patented steps, Limelight allegedly asked the customers to do the job.

Akamai Technologies Inc., which held the exclusive license to the patented method, sued Limelight for alleged patent infringement. In an en banc decision, the U.S. Court of Appeals for the Federal Circuit said Limelight could be sued on a theory of induced infringement. The U.S. Supreme Court reversed.

“Because Limelight did not undertake all steps of the … patent and cannot otherwise be held responsible for all those steps, [Akamai’s] rights have not been violated,” Alito wrote.

Several large companies, including Google, Facebook and Oracle Corp., had supported Limelight, according to coverage by the Wall Street Journal (sub. req.) They had argued a finding of potential liability could have led to increased infringement litigation.

The case is Limelight Technologies v. Akamai Technologies.

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