Akamai alleged that because Limelight provided information and technical support to assist its customers in performing the tagging element of the claims, Limelight wielded sufficient “control or direction” to be held vicariously liable for its customers’ actions. See Akamai Technologies, Inc. v. Limelight Networks, Inc., 629 F.3d 1311, 1318-19 (Fed. Cir. 2010), vacated on grant of reh’g en banc, 419 F. App’x 989 (Fed. Cir. 2011), and rev’d, No. 2009-1372, 2012 U.S. App. LEXIS 18532 (Fed. Cir.
2007). Now, a stricter legal standard for joint infringement - an agency relationship or a contractual obligation - has been proposed in Akamai Technologies, Inc. v. Limelight Networks, Inc., 629 F.3d 1311 (Fed. Cir. 2010), and McKesson Technologies Inc v. Epic Systems Corp., 2011 U.S. App. LEXIS 7531 (Fed. Cir. 2011).
On a motion for reconsideration, the district court granted Limelight’s motion for judgment as a matter of law and reversed the jury’s verdict.Limelight appealed to the Federal Circuit.On appeal, a three-judge Federal Circuit panel affirmed that decision, finding that, even though Limelight provided instructions on how to tag, and tagging and serving were necessary steps in using Limelight’s services, there was nothing to indicate that Limelight’s customers were acting as agents for Limelight. 629 F.3d 1311, 1320 (Fed. Cir. 2010).The panel further reasoned that Limelight’s customers chose which content, if any, to have delivered by Limelight’s process and performed the “tagging” and “serving” steps accordingly.Id.
In its initial panel decision, the Federal Circuit affirmed the district court’s finding of no direct infringement, holding that Limelight was not liable because it did not control the website owner’s decision to tag certain objects. Akamai Technologies, Inc. v. Limelight Networks, Inc., 629 F.3d 1311 (Fed. Cir. 2010). In a subsequent en banc decision, the Federal Circuit avoided the divided infringement issue addressed by the panel, and instead held that Limelight may be liable for indirect infringement based on a new rule that the direct infringement requirement for inducement may be satisfied by multiple actors, i.e., all of the steps needed to establish direct infringement need not be attributable to a single actor.
In the initial panel decision, the Federal Circuit affirmed, ruling that Limelight was not liable because it did not control the website owner’s decision to tag certain objects. Akamai Technologies, Inc. v. Limelight Networks, Inc., 629 F.3d 1311 (Fed. Cir. 2010). In a subsequent en banc decision, however, the Federal Circuit deftly avoided the divided infringement issue by ruling that Limelight could be liable for active inducement of infringement under 35 U.S.C. § 271(b).
The court held that “the control or direction standard is [only] satisfied in situations where the law would traditionally hold the accused direct infringer vicariously liable for the acts committed by another party that are required to complete performance of a claimed method” and that “mere arms-length cooperation will not give rise to direct infringement by any party.” The 2010 appeal in Akamai Techs., Inc. v. Limelight Networks, Inc., 629 F.3d 1311 (Fed. Cir. 2010) presented a closer question because in that case it was acknowledged that “Limelight’s [customer] agreement calls for its customers to assign a unique hostname, requires content providers to perform certain claim steps if they choose to use Limelight’s service, and provides instructions and offers technical assistance for performing those steps.” The Federal Circuit explained that direct infringement liability could indeed be found where a party is “contractually obligated to the accused infringer to perform a method step.”
 532 F.3d at 1329. 629 F.3d 1311,1320. 692 F.3d 1301, 1319 (per curiam).
A Federal Circuit panel first affirmed, holding there could be no divided infringement because Limelight's customers did not perform the "tagging" step as "Limelight's agents," nor were the customers "contractually obligated" to perform the step. Akamai Technologies, Inc. v. Limelight Networks, Inc., 629 F.3d 1311, 1321 (Fed. Cir. 2010). Sitting en banc, the Federal Circuit in a per curiam opinion ultimately did not clarify the law on divided infringement and instead held that even if no single party is liable for direct infringement, a party can still be liable for inducing infringement.
Confusion over the infringement standard in such cases has led to inconsistent precedent concerning who may be held liable for direct and/or induced infringement. To clarify the proper test in cases of divided infringement, the Federal Circuit, sitting en banc, reviewed two separate panel decisions, Akamai Technologies, Inc. v. Limelight Networks (Fed. Cir. 2010) and McKesson Technologies, Inc. v. Epic Sys. Corp. (Fed. Cir.
According to the panel opinion, this arrangement lacked the necessary control and direction between the defendant Limelight Networks and its customers. Akamai Tech., Inc. v. Limelight Networks, Inc., 629 F.3d 1311 (Fed. Cir. 2010). In reversing these two panel decisions, the Federal Circuit determined that there is no “control or direction” or agency requirement between the parties that perform the steps of a method claim for there to be induced infringement under §271(b).