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SUPREME COURT OF THE UNITED STATES
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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.
