Supreme CourtThe Supreme Court has had a busy time of it in June stirring the patent pot, with decisions in three cases and arguments in a fourth. The general rule is that whenever the Supreme Court decides a patent case, the law is left in worse shape than it was before. The recent decisions are no exception. This month, we’ll take a look at Limelight v Akamai, decided June 2, 2014.

In Limelight, the Court considered “inducement of infringement.” Inducement of infringement occurs when one person causes, or induces, another person to infringe a patent. Where the patent is to a method of doing something, the inducement rule for many years has been that (a) one person must induce another person to infringe the patent, and (b) the other person must actually perform all of the steps of the method and thus infringe the patent. The person who caused someone else to infringe is liable for infringement, just is the person who actually infringed.

This rule worked fine when things were made from steel and wood, but has been a problem for Internet-implemented inventions that can be performed over a computer network by different people in different locations and even different countries.

The stage is set for Limelight and Akamai.

MIT owned patents relating to storage and retrieval of content over the Internet. MIT licensed the patents to Akamai, which runs a service utilizing the MIT patent to store and retrieve content. The patent (and the Akamai service) involves storing large files on servers located in different locations, and, hopefully, near the user who wants access to the file. Local storage of the large files allowed faster access by the user. One of the steps of the patent is that Akamai ‘tags’ which of a customer’s files are to be stored in the local servers.

Limelight operates a competing service that is just like Akamai’s service, but with one important difference – Limelight does not ‘tag’ the files. Instead, Limelight’s customers tag their own files, using advice and assistance from Limelight. Because Limelight does not tag the files, no one person performs all of the steps of the patent and there is no one that Akamai can sue for direct infringement. Because no one person performs all of the steps of the patent, under the old rule Limelight cannot be liable for inducement of infringement. Akamai has no remedy. Seems unfair, doesn’t it?

The Federal Circuit Court of Appeals thought so. It decided that the old rule did not work in the information age and that Limelight’s actions in copying Akamai’s business but avoiding the patent should not be tolerated and that Limelight should be liable for inducement of infringement.

The Supreme Court reversed and reinstated the old rule, seeing no reason to change. As a result of the Supreme Court’s decision, Akamai is without remedy and Internet copyists are free to cut a step from a method patent, instruct someone else to perform the missing step, and avoid patent infringement altogether. The value of Internet inventions, or in fact any method patent that can be performed by different people, has just dropped.

–Robert Yarbrough, Esq.