To infringe a claim in a patent, each and every element of the claim or a reasonable equivalent thereof, must be practiced by an accused infringer. Where a method claim is involved, one person or entity may practice, or be accused of practicing, all of the steps of the claim(s) in question. However, this is not always the case. In some instances, more than one person or entity performs the steps of the patented method.
When this occurs, the alleged infringer can still be found liable under a common law theory referred to as "Joint Infringement." However, for liability to attach, certain conditions need to be satisfied. These conditions were recently set forth and better defined by the Court of Appeals for the Federal Circuit in Akamai Technologies, Inc. v. Limelight Networks, Inc., 09 - 1372 (Fed. Cir. Dec. 20, 2010) (hereinafter referred to as "Akamai"). In Akamai, the Federal Circuit held that joint infringement can exist only if there is an agency relationship between the parties that perform the claimed method steps or where there is a contractual obligation whereby one party is obligated to the other. While this sounds straightforward, it is not always so simple.
For an agency relationship to exist, both parties must agree that the agent is acting on behalf of, and under the control of, the principal. The level of control must be such that the acts of the agent can be attributed to, or considered the acts of the principal. In Akemi, Limelight Networks, Inc. (hereinafter referred to as "Limelight") was accused of infringing claims directed to a method for delivering content over a network. Limelight provided information to their customers regarding modification of websites etc. in order for the customers to use the limelight service. The steps performed by Limelight's customers were some of the steps embodied in the patented method. Therefore, Limelight performed some of the patented steps and Limelight's customers performed some of the steps. This resulted in a joint infringement situation.
It is a fundamental tenet of agency law that an agency relationship does not arise when one person simply provides direction to another. Even if the instructions are explicit, an agency relationship is not established. Limelight would have had to exercise control over their customers; however, in the instant situation, Limelight's customers acted for their own benefit and control. Accordingly, no agency situation existed.
The Federal Circuit, in Limelight, expanded on its ruling in BMC Resources, Inc. v. Paymentech L.P., 498 F.3d 1373 (Fed Cir. 2007) (hereinafter "BMC"). The BMC Court held that joint infringement may be found when one party controls or directs the activities of another. The Akamai Court further found that "what is essential is not merely the exercise of control or the providing of instructions, but whether the relationship between the parties is such that acts of one may be attributed to the other." This was interpreted by the court as requiring either an agency relationship or a contractual obligation. In their customer contract, Limelight spelled out the steps a customer would have to take in order to use the Limelight service.
The court held that mere contractual relationships, even those that specifically detail the steps to be taken, do not trigger direction and control. The Limelight Court opined that "The form contract does not obligate Limelight's customers to perform any of the method steps. It merely explains that the customer will have to perform the steps if it decides to take advantage of Limelight's service… The agreement merely provides the customer with the tools to allow them to exercise their independent discretion and control over how and in what respect they implement the system. Limelight's customers did not perform the actions… as Limelight's agents and were not contractually obligated to perform those actions."
Based on the foregoing, it is extremely important that patent claims be drafted in such a way as to minimize the potential for joint infringement. This can be accomplished in several ways. For example, instead of drafting a method step along the lines of "Inputting data into the processor," which may require the actions of another, the same step could be drafted to read "the processor receiving data…" Careful examination of claims and possibly a review of pending claims for possible amendment is advisable in order to minimize potential Joint Infringement issues.
When this occurs, the alleged infringer can still be found liable under a common law theory referred to as "Joint Infringement." However, for liability to attach, certain conditions need to be satisfied. These conditions were recently set forth and better defined by the Court of Appeals for the Federal Circuit in Akamai Technologies, Inc. v. Limelight Networks, Inc., 09 - 1372 (Fed. Cir. Dec. 20, 2010) (hereinafter referred to as "Akamai"). In Akamai, the Federal Circuit held that joint infringement can exist only if there is an agency relationship between the parties that perform the claimed method steps or where there is a contractual obligation whereby one party is obligated to the other. While this sounds straightforward, it is not always so simple.
For an agency relationship to exist, both parties must agree that the agent is acting on behalf of, and under the control of, the principal. The level of control must be such that the acts of the agent can be attributed to, or considered the acts of the principal. In Akemi, Limelight Networks, Inc. (hereinafter referred to as "Limelight") was accused of infringing claims directed to a method for delivering content over a network. Limelight provided information to their customers regarding modification of websites etc. in order for the customers to use the limelight service. The steps performed by Limelight's customers were some of the steps embodied in the patented method. Therefore, Limelight performed some of the patented steps and Limelight's customers performed some of the steps. This resulted in a joint infringement situation.
It is a fundamental tenet of agency law that an agency relationship does not arise when one person simply provides direction to another. Even if the instructions are explicit, an agency relationship is not established. Limelight would have had to exercise control over their customers; however, in the instant situation, Limelight's customers acted for their own benefit and control. Accordingly, no agency situation existed.
The Federal Circuit, in Limelight, expanded on its ruling in BMC Resources, Inc. v. Paymentech L.P., 498 F.3d 1373 (Fed Cir. 2007) (hereinafter "BMC"). The BMC Court held that joint infringement may be found when one party controls or directs the activities of another. The Akamai Court further found that "what is essential is not merely the exercise of control or the providing of instructions, but whether the relationship between the parties is such that acts of one may be attributed to the other." This was interpreted by the court as requiring either an agency relationship or a contractual obligation. In their customer contract, Limelight spelled out the steps a customer would have to take in order to use the Limelight service.
The court held that mere contractual relationships, even those that specifically detail the steps to be taken, do not trigger direction and control. The Limelight Court opined that "The form contract does not obligate Limelight's customers to perform any of the method steps. It merely explains that the customer will have to perform the steps if it decides to take advantage of Limelight's service… The agreement merely provides the customer with the tools to allow them to exercise their independent discretion and control over how and in what respect they implement the system. Limelight's customers did not perform the actions… as Limelight's agents and were not contractually obligated to perform those actions."
Based on the foregoing, it is extremely important that patent claims be drafted in such a way as to minimize the potential for joint infringement. This can be accomplished in several ways. For example, instead of drafting a method step along the lines of "Inputting data into the processor," which may require the actions of another, the same step could be drafted to read "the processor receiving data…" Careful examination of claims and possibly a review of pending claims for possible amendment is advisable in order to minimize potential Joint Infringement issues.
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