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SUPREME COURT OF THE UNITED STATES
_________________
No. 12–786
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LIMELIGHT NETWORKS, INC., PETITIONER v. AKAMAI
TECHNOLOGIES, INC., et al.
on writ of certiorari to the united states
court of appeals for the federal circuit
[June 2, 2014]
Justice Alito
delivered the opinion of the Court.
This case presents the
question whether a defendant may be liable for inducing
infringement of a patent under 35 U. S. C. §271(b) when
no one has directly infringed the patent under §271(a) or any other
statutory provision. The statutory text and structure and our prior
case law require that we answer this question in the negative. We
accordingly reverse the Federal Circuit, which reached the opposite
conclusion.
I
A
Respondent the
Massachusetts Institute of Technology is the assignee of U. S.
Patent No. 6,108,703 (’703 patent), which claims a method of
delivering electronic data using a “content delivery network,” or
“CDN.” Respondent Akamai Technologies, Inc., is the exclusive
licensee. Akamai maintains many servers distributed in various
locations. Proprietors of Web sites, known as “content providers,”
contract with Akamai to deliver their Web sites’ content to
individual Internet users. The ’703 patent provides for the
designation of certain components of a content provider’s Web site
(often large files, such as video or music files) to be stored on
Akamai’s servers and accessed from those servers by Internet users.
The process of designating components to be stored on Akamai’s
servers is known as “tagging.” By “aggregat[ing] the data demands
of multiple content providers with differing peak usage patterns
and serv[ing] that content from multiple servers in multiple
locations,” 614 F. Supp. 2d 90, 96 (Mass. 2009), as well as by
delivering content from servers located in the same geographic area
as the users who are attempting to access it, Akamai is able to
increase the speed with which Internet users access the content of
its customers’ Web sites.
Petitioner Limelight
Networks, Inc., also operates a CDN and carries out several of the
steps claimed in the ’703 patent. But instead of tagging those
components of its customers’ Web sites that it intends to store on
its servers (a step included in the ’703 patent), Limelight
requires its customers to do their own tagging.[
1] Respondents claim that Limelight “provides
instructions and offers technical assistance” to its customers
regarding how to tag, 629 F. 3d 1311, 1321 (CA Fed. 2010), but
the record is undisputed that Limelight does not tag the components
to be stored on its servers.
B
In 2006, respondents
sued Limelight in the United States District Court for the District
of Massachusetts, claiming patent infringement. The case was tried
to a jury, which found that Limelight had committed infringement
and awarded more than $40 million in damages.
Respondents’ victory
was short-lived, however. After the jury returned its verdict, the
Federal Circuit decided Muniauction, Inc. v. Thomson Corp., 532
F. 3d 1318 (2008). In that case the Court of Appeals rejected
a claim that the defendant’s method, involving bidding on financial
instruments using a computer system, directly infringed the
plaintiff’s patent. The defendant performed some of the steps of
the patented method, and its customers, to whom the defendant gave
access to its system along with instructions on the use of the
system, performed the remaining steps. The court started from “the
proposition that direct infringement requires a single party to
perform every step of a claimed method.” Id., at 1329. This
requirement is satisfied even though the steps are actually
undertaken by multiple parties, the court explained, if a single
defendant “exercises ‘control or direction’ over the entire process
such that every step is attributable to the controlling party.”
Ibid. The court held that the defendant in Muniauction was not
liable for direct infringement because it did not exercise control
or direction over its customers’ performance of those steps of the
patent that the defendant itself did not perform. Id., at 1330.
In light of
Muniauction, Limelight moved for reconsideration of its earlier
motion for judgment as a matter of law, which the District Court
had denied. The District Court granted the motion, concluding that
Muniauction precluded a finding of direct infringement under
§271(a) because infringement of the ’703 patent required tagging
and Limelight does not control or direct its customers’ tagging. A
panel of the Federal Circuit affirmed, explaining that a defendant
that does not itself undertake all of a patent’s steps can be
liable for direct infringement only “when there is an agency
relationship between the parties who perform the method steps or
when one party is contractually obligated to the other to perform
the steps.” 629 F. 3d, at 1320. Since neither of these
conditions was met in the present case, the Federal Circuit panel
held that Limelight could not be held liable for direct
infringement.[
2] Ibid.
The Federal Circuit
granted en banc review and reversed. The en banc court found it
unnecessary to revisit its §271(a) direct infringement case law.
Instead, it concluded that the “evidence could support a judgment
in [respondents’] favor on a theory of induced infringement” under
§271(b). 692 F. 3d 1301, 1319 (2012) (per curiam). This was
true, the court explained, because §271(b) liability arises when a
defendant carries out some steps constituting a method patent and
encourages others to carry out the remaining steps—even if no one
would be liable as a direct infringer in such circumstances,
because those who performed the remaining steps did not act as
agents of, or under the direction or control of, the defendant. The
Court of Appeals did not dispute that “there can be no indirect
infringement without direct infringement,” id., at 1308, but it
explained that “[r]equiring proof that there has been direct
infringement . . . is not the same as requiring proof
that a single party would be liable as a direct infringer,” id., at
1308–1309 (emphasis deleted). Judge Newman and Judge Linn both
dissented (with the latter joined by Judges Dyk, Prost, and
O’Malley).
Limelight sought
certiorari, which we granted. 571 U. S. ___ (2014).
II
A
Neither the Federal
Circuit, see 692 F. 3d, at 1308, nor respondents, see Tr. of
Oral Arg. 44, dispute the proposition that liability for inducement
must be predicated on direct infringement. This is for good reason,
as our case law leaves no doubt that inducement liability may arise
“if, but only if, [there is] . . . direct infringement.”
Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U. S 336,
341 (1961) (emphasis deleted).[
3]
One might think that
this simple truth is enough to dispose of this appeal. But the
Federal Circuit reasoned that a defendant can be liable for
inducing infringement under §271(b) even if no one has committed
direct infringement within the terms of §271(a) (or any other
provision of the patent laws), because direct infringement can
exist independently of a violation of these statutory provisions.
See 692 F. 3d, at 1314.
The Federal Circuit’s
analysis fundamentally misunderstands what it means to infringe a
method patent. A method patent claims a number of steps; under this
Court’s case law, the patent is not infringed unless all the steps
are carried out. See, e.g., Aro, supra, at 344 (a “pat-ent covers
only the totality of the elements in the claim and . . .
no element, separately viewed, is within the grant”). This
principle follows ineluctably from what a patent is: the conferral
of rights in a particular claimed set of elements. “Each element
contained in a patent claim is deemed material to defining the
scope of the patented invention,” Warner-Jenkinson Co. v. Hilton
Davis Chemical Co., 520 U. S. 17, 29 (1997) , and a patentee’s
rights extend only to the claimed combination of elements, and no
further.
The Federal Circuit
held in Muniauction that a method’s steps have not all been
performed as claimed by the patent unless they are all attributable
to the same de-fendant, either because the defendant actually
performed those steps or because he directed or controlled others
who performed them. See 532 F. 3d, at 1329–1330. Assuming
without deciding that the Federal Circuit’s holding in Muniauction
is correct, there has simply been no infringement of the method in
which respondents have staked out an interest, because the
performance of all the patent’s steps is not attributable to any
one person. And, as both the Federal Circuit and respondents admit,
where there has been no direct infringement, there can be no
inducement of infringement under §271(b).
The Federal Circuit’s
contrary view would deprive §271(b) of ascertainable standards. If
a defendant can be held liable under §271(b) for inducing conduct
that does not constitute infringement, then how can a court assess
when a patent holder’s rights have been invaded? What if a
defendant pays another to perform just one step of a 12-step
process, and no one performs the other steps, but that one step can
be viewed as the most important step in the process? In that case
the defendant has not encouraged infringement, but no principled
reason prevents him from being held liable for inducement under the
Federal Circuit’s reasoning, which permits inducement liability
when fewer than all of a method’s steps have been performed within
the meaning of the patent. The decision below would require the
courts to develop two parallel bodies of infringement law: one for
liability for direct infringement, and one for liability for
inducement.
Section 271(f)(1)
reinforces our reading of §271(b). That subsection imposes
liability on a party who “supplies or causes to be supplied in or
from the United States all or a substantial portion of the
components of a patented invention . . . in such manner
as to actively induce the combination of such components outside of
the United States in a manner that would infringe the patent if
such combination occurred within the United States” (emphasis
added). As this provision illustrates, when Congress wishes to
impose liability for inducing activity that does not itself
constitute direct infringement, it knows precisely how to do so.
The courts should not create liability for inducement of
non-infringing conduct where Congress has elected not to extend
that concept.
The Federal Circuit
seems to have adopted the view that Limelight induced infringement
on the theory that the steps that Limelight and its customers
perform would infringe the ’703 patent if all the steps were
performed by the same person. But we have already rejected the
notion that conduct which would be infringing in altered
circumstances can form the basis for contributory infringement, and
we see no reason to apply a different rule for inducement. In
Deepsouth Packing Co. v. Laitram Corp., 406 U. S. 518 (1972) ,
a manufacturer produced components of a patented machine and then
exported those components overseas to be assembled by its foreign
customers.[
4] (The assembly by
the foreign customers did not violate U. S. patent laws.) In
both Deepsouth and this case, the conduct that the defendant
induced or contributed to would have been infringing if committed
in altered circumstances: in Deepsouth if the machines had been
assembled in the United States, see id., at 526, and in this case
if performance of all of the claimed steps had been attributable to
the same person. In Deepsouth, we rejected the possibility of
contributory infringement because the machines had not been
assembled in the United States, and direct infringement had
consequently never occurred. See id., at 526–527. Similarly, in
this case, performance of all the claimed steps cannot be
attributed to a single person, so direct infringement never
occurred. Limelight cannot be liable for inducing infringement that
never came to pass.
B
Respondents’
arguments in support of the Federal Circuit’s reading of the
statute are unpersuasive. First, respondents note that tort law
imposes liability on a defendant who harms another through a third
party, even if that third party would not himself be liable, and
respondents contend that, given the background tort principles
against which the Patent Act of 1952 was enacted, it should not
matter that no one is liable for direct infringement in this case.
But the reason Limelight could not have induced infringement under
§271(b) is not that no third party is liable for direct
infringement; the problem, instead, is that no direct infringement
was committed. Muniauction (which, again, we assume to be correct)
instructs that a method patent is not directly infringed—and the
patentee’s interest is thus not violated—unless a single actor can
be held responsible for the performance of all steps of the patent.
Because Limelight did not undertake all steps of the ’703 patent
and cannot otherwise be held responsible for all those steps,
respondents’ rights have not been violated. Unsurprisingly,
respondents point us to no tort case in which liability was imposed
because a defendant caused an innocent third party to undertake
action that did not violate the plaintiff’s legal rights.
In a related argument,
respondents contend that, at tort, liability sometimes attaches
where two or more defendants inflict injury, even if each
defendant’s conduct, standing alone, would not be actionable. See
W. Keeton, D. Dobbs, R. Keeton, & D. Owen, Prosser and Keeton
on Torts §52, p. 354 (5th ed. 1984) (multiple defendants who each
add negligible impurities to stream liable if aggregate impurities
cause harm). But the rationale for imposing liability in these
circumstances is that the defendants collectively invaded the
plaintiff’s protected interests. See ibid. By contrast, under the
Muniauction rule, respondents’ interests in the ’713 patent have
not been invaded.
Second, respondents
seek to analogize §271(b) to the federal aiding and abetting
statute, 18 U. S. C. §2, and they argue that two parties
who divide all the necessary elements of a crime between them are
both guilty under §2. The analogy does not hold up. The aiding and
abetting statute must be read “against its common-law background,”
Standefer v. United States, 447 U. S. 10, 19 (1980) , and at
common law two or more defendants, each of whom committed an
element of a crime, were liable as principals. See, e.g., 1 J.
Bishop, Commentaries on the Criminal Law §649, p. 392 (7th ed.
1882). While we have drawn on criminal law concepts in the past in
interpreting §271(b), see Global-Tech Appliances, Inc. v. SEB
S. A., 563 U. S. ___, ___ (2011) (slip op., at 10–12), we
think it unlikely that Congress had this particular doctrine in
mind when it enacted the Patent Act of 1952, given the doctrine’s
inconsistency with the Act’s cornerstone principle that patentees
have a right only to the set of elements claimed in their patents
and nothing further.
Third, respondents
contend that patent law principles established before the enactment
of the Patent Act demonstrate that a defendant that performs some
steps of a patent with the purpose of having its customers perform
the remaining steps is liable for inducing infringement. But here,
too, the nature of the rights created by the Pat-ent Act defeats
the notion that Congress could haveintended to permit inducement
liability where there is no underlying direct infringement.
According to respondents, their understanding of the pre-1952
doctrine casts doubt on the Muniauction rule for direct
infringement under §271(a), on the ground that that rule has the
indirect effect of preventing inducement liability where Congress
would have wanted it. But the possibility that the Federal Circuit
erred by too narrowly circumscribing the scope of §271(a) is no
reason for this Court to err a second time by misconstruing §271(b)
to impose liability for inducing infringement where no infringement
has occurred.
Finally, respondents,
like the Federal Circuit, criticize our interpretation of §271(b)
as permitting a would-be infringer to evade liability by dividing
performance of a method patent’s steps with another whom the
defendant neither directs nor controls. We acknowledge this
concern. Any such anomaly, however, would result from the Fed-eral
Circuit’s interpretation of §271(a) in Muniauction. A desire to
avoid Muniauction’s natural consequences does not justify
fundamentally altering the rules of inducement liability that the
text and structure of the Patent Act clearly require—an alteration
that would result in its own serious and problematic consequences,
namely, creating for §271(b) purposes some free-floating concept of
“infringement” both untethered to the statutory text and difficult
for the lower courts to apply consistently.
III
Respondents ask us to
review the merits of the Federal Circuit’s Muniauction rule for
direct infringement under §271(a). We decline to do so today.
In the first place, the
question presented is clearly focused on §271(b), not §271(a). We
granted certiorari on the following question: “Whether the Federal
Circuit erred in holding that a defendant may be held liable for
inducing patent infringement under 35 U. S. C. §271(b) even though
no one has committed direct infringement under §271(a).” Pet. for
Cert. i. The question presupposes that Limelight has not committed
direct infringement under §271(a). And since the question on which
we granted certiorari did not involve §271(a), petitioner did not
address that important issue in its opening brief. Our decision on
the §271(b) question necessitates a remand to the Federal Circuit,
and on remand, the Federal Circuit will have the opportunity to
revisit the §271(a) question if it so chooses.
IV
The judgment below is
reversed, and the case is remanded for further proceedings
consistent with this opinion.
It is so ordered.
