property law

Alli Pyrah, New York

SCOTUS WARY OF UNINTENDED CONSEQUENCES IN LIMELIGHT V

AKAMAI

The Supreme Court has to weigh up tough issues in Limelight Networks v Akamai

Technologies because ruling in favour of Akamai on the issue of induced infringement could

lead to a barrage of lawsuits

In oral argumentsin Limelight Networks v

Akamai Technologies on April 30, the Supreme

Court seemed hesitant to create a precedent that

one justice worried could lead to "vast numbers of

consumers" being sued for patent infringement.

The case concerns the issue of joint infringement -

whether two parties can be held liable for violating

a patent if they each perform different steps of it.

In this case, Akamai claims that Limelight induced

its customers to infringe. Although courts have

previously found that induced infringement has occurred when one party has control over other,

Limelight does not directly control its customers.

While the justices seemed sympathetic to Akamai's predicament, they expressed concerns that

ruling in its favour could create a precedent with unintended consequences. For example, so-called

patent trolls have recently begun targeting end-users. Individuals and small businesses tend to have

fewer resources to devote to expensive litigation, so they have more of an incentive to settle

irrespective of the merits of the case against them.

The case is on appeal from the Federal Circuit, which originally found in a panel hearing that

Limelight did not directly infringe the patent. When rehearing the case en banc in August 2012, the

Federal Circuit did not reconsider the issue of direct infringement but ruledthat Limelight was liable

for induced infringement.

Aaron Panner, arguing for Limelight, said that under Section 271(b), a defendant cannot be held

liable for induced infringement unless the defendant has deliberately brought about actionable

direct infringement under Section 271(a).

Panner said that if the law is to be changed in response to "supposed unfairness in a particular case",

that change should be made by Congress, not the courts.

But Chief Justice Roberts seemed sceptical. "Your position makes it pretty easy to get around patent

protection, doesn't it?" he asked Panner.

"All you've got to do is find one step in the process and essentially outsource it or make it attractive

for someone else to perform that particular step and you've essentially invalidated the patent."

The Supreme Court is not presently considering the issue of direct infringement. During the oral

arguments, some of the justices discussed the possibility of doing so next term.

"There was certainly recognition that simply affirming or reversing the Federal Circuit decision

might not really address the issue," said Wayne Porter, a senior shareholder of Banner & Witcoff.

"It's an issue that certainly needs some clarification regardless of which side of the issue you are on."

Ramifications for many industries

Michael Huget, a partner of Honigman Miller Schwatz & Cohn, said the internet has brought about

more opportunities for joint infringement. But he said it is also an issue that occurs in the

pharmaceutical, medical device and automotive industries.

08 May 2014 |

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