are the single entity rule of the akamai panel and the related cases creates a huge and i submit unfair loophole in the law but more significantly i submit if one supported by the case law is contrary to the reasoning supporting the rule and at least three of the cases reach the obvious as conclusion and those three cases cite two others which reach the opposite conclusion is inconsistent with the statutes two seventy one a everybody focuses on that statute the words are very simple whoever uses any patented invention of left out a few words in between whoever includes both singular and plural under one u s c one if you look at the dictionary it says person or persons and if you look at section one hundred one it says whoever invents and we all know that you can have plural invention inventors on a patent section one hundred two a person shall be entitled to a patent we all know that you have plural persons entitled to one patent i might focuses on the word used in whoever uses but that tells you what infringes it doesn't tell you who clearly demonstrated that they were trying to get at curing the prior case law not embracing it your honor all of that testimony and that legislation was directed to contributory infringement which was in the in the language of the reports the senate reports confused and and difficult to follow it was designed to clear up that area of the law and i'm not talking today about contributory infringement i'm talking about direct infringement and the arrow case and the word jenkins in case those say that the act was not intended to change the law a direct infringement  disagree with that your honor the peerless case which we cited the seven circuit nine hundred thirty seven case clearly had multiple actors it didn't have a single actor the how a burton versus handle loyal case in one circuit nine hundred thirty eight what i'm relying on is the supreme court in word jenkinson an arrow said that there was no intent to change the law at the pre nine hundred fifty two law of direct infringement whatever it was and so whether they knew about what the law was is not what i'm relying on so you don't have to satisfy the usual standards for congressional ratification of judicial decisions i cannot satisfy the not that i know of your honor so there's your argument i was in would be there's no there's no evidence either way in terms of congress's ratification that they were necessarily undocking that's exactly right mr duncan i move you want to sort of the merits of your situation where the defendant simply instructs another to perform off step and performs nonsense on or you're only talking about the circumstance in which the person is also performing at least one which if one person performs one percent of the steps one step out of a hundred and another performs ninety nine steps that person would still be liable in the one that does the one step yes your honor we have the three parts test and observe art is knowingly combining the method steps you need to know you don't need to know these are patterns you don't need to know that in fact but you need to know that your libel for infringement under that it doesn't make any difference whether you are performing a step in the prior art because as we've heard many times from decisions of this chord cat inventions are made up of  steps put together so it's the combination that we're talking about if you know of one step and it is in the end you know it's being combined with ninety nine other steps when you know what those ninety nine other steps are although under our proposal that's exactly right but if someone is not performing any steps they would have no liability right even if they are directing the performance of those stats unless they meet the quite stringent of global right so the difference between the serial percent in the one percent is pretty steep grass your honor if there are no steps then we're talking about indirect infringements and that is not covered by my proposals so the performance is one step on a one hundred versus performance with no steps is determines whether or not there's liability that's exactly right but we have gone out of our way to make it clear that we are not trying one test is direction or control not and control or control the second test is concert of action the third test is knowingly combining steps with another so there are three separate tests and  each case there has to be knowledge of what is happening in the first case directional control all you have that what's what somebody else might call a classic case i don't know limiting it to direction or control and furthermore further limiting the directional control test to an agency or contract criteria i think i understand the gist of your first two tests i'm having trouble getting a handle on the third knowingly is that significantly different from the concerted action canst and if so what does it cover the concer concerted action is a collaboration by agreement with direct or indirect agreement between parties the third test that we're talking about is illustrated by the peerless case where you have a manufacturer of road equipment including the gear and that year had a convex service and had to be flattened and so the manufacturer of the  of that year assumed that the users would actually in practice flattened the service so in that case you had no concern there was no concert because there was no agreement between the parties there was no collaboration between the parties it was just a matter of fact you're selling a product knowing that in use the last step of the process would be performed so in that case the manufacturer would be liable but the user would not be liable because the user had no idea that it was doing anything connected with a process multiple steps so if you find i work at a part store as a miscellaneous electronic parts a radio shack let's say and you come in and you say i want to buy a part off the shelf it's a standard quark and what i'm going to do is put it together with a lot of  other devices now let's let's translate this into a process let's say a new voice device but if if you explain the process you're going to follow the first step of which is in the first episode is the obtaining of the of the part from the rays from radio shack which the radio shack the guy provides the part and the radio shack employee knows that when it is tak component of contributory infringement so that aside if there is a possible infringing knew where the salesman is told it's going to be used to produce but it's an off the shelf product with other uses which i did was they were learned there was a mine that was my it was just an off the shelf park but it was going to be used the salesman was told for this and permissible as it turns out purpose your honor this is not it to seventy system that is sold the way you're performing on it it doesn't focus on on performing steps by the contributory infringer it involves selling operators that ultimately will be used for all the steps what we're talking about is a process claim under two seventy one a and we're talking about two different people for forming part of all the steps going you know forms part of it the other one forms part of it there's got to be knowledge that white is being performed is part of a complete series of steps the culmination of which would in fact be the steps in the claim that they do not need to know there's a patent they do not need selling the components of an apparatus to another party that will take those components and put it into an overall device that's covered by  that he has fermented clients you have the n t p case which is restricted to our greatest claims you had the same kilian case which distinguishes between method claims and operators claims the court has drawn a line between those two joint direct infringement liability and the reasoning all all of this has been in the context of the facts of the case to be directed to a method plan what are the implications if we adopt this rule for apparatus claims where somebody is filling up a component that someone else is going to use in a combination that's covered by why wouldn't the same rule apply and result in some song billets your honor i think not and the reason i think not is the court has whatever reason and put it in a separate category whole and it has no substantial one infringing use is not a stable then you would be alive on the two seventy one c so there are in the fact situation you posited it would be covered by two seventy one and then guilty and that in the putting together happens in the united states not a product is deep south guilty then direct infringement by doing  different than a process the reason is that that has started late operators claim to have just been treated differently and method claims i'm not trying to rewrite the statute and i'm trying to ask the court to interpret the statute and not been the case in the aberrated situations the two seventy one c two seventy one being held to apply and i am i'm dealing with the law as i find it today and if i were covers single or plural actors and i think that that be the case while we're talking about vicarious liability here and  just this statute doesn't make any distinction in terms of two seventy one a between apparatus claims and that the claims of the cases are different only in the sense of the tree different types of infringement based on use based on manufacturer based on sale is a different fact patterns that result in different types of analyses but in terms of  i responded to judge dyke the logic in my view is the same in the method situation or in the operative situation so and i agree there's nothing in two seventy one a that distinguishes between methods and operated as if this court i think the case law and the commentators and the history of the patent act are such that when you have a method claim you should be able to combine the absence of two different actors under the circumstances described directional control concerted action or knowledge of the acts being performed and if this court wants to extend that to operate as i would be delighted and i don't think there's anything preventing you from doing so i'm just telling his starkly the court seems to have adopted a different rule for operators and products and what have you then has from essence i see no difference in the logic this is not our role as a court to be expanding the scope of coverage if that's what is required that's for congress your honor i don't c wasn't that what two seventy one b n to seventy one c were intended to address yes but the the supreme court has to seventy one b and c was the subject much discussion including statements from judge religion designed to clarify the law of contributory infringement for women in confusion that has been created  pretty much explained without reference pacifically to the in process or and what posture makes clear is that you're distinguishing here between the  between somebody who's acting and somebody who is acting innocently so in my hypotheticals if you have two people and one knows that that something that is being done combined with something else will will result your third period inferences about the individual actors and innocent your honor i think i think it really relates to all three theories and the reason it relates to all three theories is that if you have a knack which  alone is the example they give is polluting the stream if you have somebody adding something to a stream which alone doesn't do anything but in combination with something that somebody else adds to the stream you can have a fact in that situation and all they're trying to do in the come and see that you read is distinguish between an act which becomes tortious either alone or because it's combined with somebody else involve elements of direction of control in those being questions of fact but it could be but i've always i've always considered concerted action to be a cooperative effort between multiple parties where his direction and control all may not involve any cooperation it may not be greater than just you made a troll somebody do something without there being an agreement so is overlap so i may give instructions to somebody on how to use a particular article and yet not be having concerted action with that person but with my giving instructions detailed instructions here's what you question was well if if instructions are provided doesn't that constitute direction control and it does not and this court in the mc and then again in the option and panel opinion in this case understood that there's a very sharp distinction between the attribution of conduct under principles like serious liability and joint tort fees or liability where there is wrongful conduct by act or by multiple actors that may meet a liability for both of them and share d responsibility for the resulting harm and so if you look at the way that congress codified the infringement tort in section two seventy one there's a very sharp distinction between direct liability under two seventy one which requires the performance of all of the elements of the patent and in which liability is direct it doesn't depend on knowledge it doesn't even depend on knowledge that the conduct is being performed what it depends on is simply the  use of the invention of this case the use of the method by performing all of the staff and section two seventy one b and c which have actually an extraordinary standard for intent they require not merely knowledge of the patent not merely knowledge of the conduct but knowledge that the conduct that's contemplated is infringing and intentionality to to defeat the patent holders rights and so to import into to section two seventy one and the possibility of liability at a lower standard where mere knowledge and mere inducement of conduct by another would be a basis for liability would undermine what is a very fundamental distinction under section two seventy one and the supreme court has made clear in cases like central bank of denver mayor versus holly and the janice case last term that where congress established a cause of action that's based on the conduct of this of the defendant itself or himself or herself that where congress has done that it is not appropriate to use principles of joint tort liability to expand the liability that congress has recognized again congress has provided for joint tortfeasor liability in some circumstances about joint tortfeasor liability what they are talking about are situations of contributory infringement not directly frenchmen and direct infringement has been understood for a very very long time to mean the use of the invention in the case of a method claim the performance of every step of the method and there are cases that are cited in our brief and some of the amicus briefs that go back to the nineteenth century that make it clear that if one does not perform is that it should be necessarily direction and control it should be something called instruction if you understand that to be a clear mind or instruction being highly factual and that would have could vary from case to case depending on the relationship the parties the industry itself and so forth what do you see and i think that's exactly right your honor and i think that there is the and building on that point there's this basic distinction between the attribution of conduct the imputation of conduct under principles of agency law or where someone has procured a particular performance where the principal can be held liable as if he had or she had performed that conduct him or herself and situations in which there is wrongful conduct wrongful procurement of some conduct or wrongful participation in a tort scheme which again is completely outside of what section two seventy one a has been understood to be directed at and and for that reason the line that this court has clearly drawn and i  would submit that it was clear and d m c it certainly is clear that it was also clear in many option and i think the panel decision in this case got it quite right that there is a bil deeply into the structure of of the law a distinction between the imputation of conduct under principles of agency effectively and broader joint tort feasor concepts where the the basis for liability is paul is the wrongful joint conduct this case and it's important to emphasize this case is slowly about direct infringement this case in this case the mine claimed that there was a literal direct infringement of their method claim but it is undisputed that limelight does not carry out one of the steps of that your honor really two points the it is it is true that limelight presumably holds that if its customers would engage in the action says this constitutes tagging and that that would result in the use of the service but it didn't have any ability to control that the customer was under no legal obligation of the panel correctly found was under no legal obligation to limelight critical distinction is between imputation of the customer's comma and a standard that would require some sort of man's wrath kind of wrongful in tact and so in the case of in the direction o to his benefit plus one likes better well they're they're acting on their own for their own discretion for their reasons of their own they're under no obligation and it's precisely for that reason that the method is different and  the the question here was if the maryland which is is there a literal direct infringement under two seventy one that when it is conceded that limelight does not carry out one of the save us fifty percent of cost of making hybrid engines but we don't want to pay that i can sing c so what we're going to do we would call an ac delco and we're going to say we want you to those hybrid engines and we ok and ford then that's the almost completed engines or the battery send they do the last step themselves no liability or is there a way of getting at that problem and saying no now they need transaction very well counseled ford does not say we direct you to produce this in this way they simply said just sell us an engine an incomplete  although inform there was no direction there was pretty clear direction given and if you handed a copy of the patent and gave the wink and the nod that and paid for that performance that debt then put it in inducement is that what you  so clearly directed notwithstanding the some of the formal language around it that that might be a question of fact but let me get to your assume that perhaps the facts are the less extreme and the question if the if the problem  to fusion the problem is intentionality the it does not live under two seventy one and if there is not a literal direct infringement that is not a problem that needs that should be dealt with under two seventy one and in their li  contract out two steps and you have the legal ability to require the your independent contractor acting probably in that circumstance at least for purposes of what you contracted with them to do as hypothetical there is a contracting out where the actor whose conduct is being imputed is under a legal obligation that direction or control standards come again comes out of agency law comes out of a circumstance in which the principal situations where you could have a factual you would have a factual issue as to whether in fact there was direction or control of a prince you know whether the principle hired the agent to do something in a particular way even though there was form and a contract that didn't necessarily dictate that i think that what i was what i was also trying to get at with a less extreme situation and and to suggest that in a circumstance where there is you seem to just run that's what i'm trying to focus on so under section two seventy one and the basis for liability is the use of the invention and so the person of the defendant use the invention and so if the defendant has not carried out every step of the method the defendant has not used the in question and so the distinction that is that i think is is fundamental and is between a circumstance in which the conduct invention but that's not the circumstance here you think of them think between two of them they have performed all the steps of the invention that they made between the two of them have performed all the steps but neither of them have had to use the liability if there is a defendant who is carrying out all of the steps of the masses then that would be use of a member they did not know it's one of the answers to judge wright and perhaps one may be wrong about this that this is a matter that that's why we pay patent prosecutors so much and this is something that could be avoided in the drafting i mean that's why when people sit there and draft their claims they can anticipate the instances where even assuming that i know you agreed that there might by cisco and others that points out that this is something that has been understood among the prosecution community for many years that it is critical to make sure that that one drafts the claims from the point of view of would agree that that your standard would encompass a joint enterprise yes or no i think in a circumstance where there is where there is in fact a joint enterprise that is where there's a mutual right of control in for example in a partnership or a joint venture tha the law has understood the joint venture for example to be mutual agents and so that that could be a circumstance where there would be liability here would you know again i know that i think it's important to recognize functionally  parties where one is trying to shoot one's conduct to to the other and so in a circumstance where there was in fact a joint joint venture or partnership or some other informal joint enterprise and i think this is actually addressed well in the in the facebook bri appear well i you know i obviously take issue with the idea that there's a gap in the law i mean the the the point is that and i think that judge prose made reference to it my drafted it's so there's nothing about the way the patent was drafted that doesn't encompass certain conduct but it doesn't describe what limelight does fly my does it a different way than the customer does the tagging and so bryson used where someone contracts out certain steps it's been clear in the law for a long time that one cannot avoid liability by contracting out or by hiring an agent to conduct something but that again it reflects the principle  really very powerful remedy that to seventy one day provides direct infringement is an extraordinarily powerful remedy for the patent holder because it doesn't depend on knowledge of the patent doesn't depend on on anything but performance of the steps but at the same time that's why it's necessary to insist on the performance of all of the steps and judge judge rich in this testimony you know said it much better than i can in terms of saying you know once you're not talking about maybe the entire process performs all of it except putting the last float of the making that final last connection which is required by the methods that sell these out to open market forward by a whole bunch of them puzzled attached patents not infringed because i did the last step and they did all the others there's no other purpose or use for this invention nothing else to be done you know i know you say it doesn't matter since the strict liability that telkom you about the patent and they did this intentionally to avoid infringement and your say too bad no harm no foul and including this harm patsy's harm but you're saying congress just didn't need to cover this kind of conduct under connection is made before that point in time it doesn't work so i'm not sure there may be there are ways for prosecutors who are far more clever than i to draft around this but it seems like that is pushing the problem off somewhere else with opposed to telling me why it doesn't fall under to seventy one a well the reason it doesn't fall into seventy one and and you're right but that it doesn't work in our view and the reason is that to seventy well i i don't love the term single entity rule because i think it's not quite accurate your honor that is to say that it's not this court's position it has not been the position of the panels that have adopted the rule but that you know that issue here that the single entity has to perform tom has to be has to be liable that is that there could be you know there's liability for the conduct of an agent there's liability for contracting out but yes that is true i would i would agree with a single entity rule characterization to this extent that that under section two seventy when one a the question is whether the defendant has used the invention whether the defendant has carried out all situation where there is no remedy even under the simple straightforward case there is no one step out of a hundred who would separate of two and it seems to me that if we get to that  then we really are approaching these abuses in the herbals some of the images produced has pointed out in terms of loss of innovation incentive it a lot of the other consequence of an ineffect circumstance in which there is and this case there was a strict liability instructions and it's under section two seventy one a and it was the instruction that  relied on a trial was they don't even need to know about the patent they don't need to be aware of it they've absolutely no requirement of intentionality and that just reduces it's then could be to the damages if you're innocent concept of percent rating which it costs you as a participant in some form of joint infringement and whether in fact the patent is being practiced i  conducting themselves in a way that does not fall within the literal terms of the patent as written and as granted by the patent office and the drafter who has the ability to draft the patent to reach postulated that it did from within the literature but but it does i understand your honor that you're saying that all of the steps were performed but that if the method claim is written to encompass several steps and neither none of the parties are carrying out those steps either directly or vicariously through the conduct of one that can be imputed to that then no one has used that patent and one can easily imagine just how threatening a patent system would be in which the performance of multiple steps by parties with some association could lead to an infringement who assume one is correct would have to do violence and the rules are three says something early in the terms of a the idea of importing into that but not the notions of intentionality and state of mind would really be quite inconsistent with what has always been a very fundamental distinction between direct and direct intervention and other types of of infringement that are based on very elevated standards of knowledge and the ones wonders why there would be any need for someone to allege contributory or inducement especially inducement of infringement of a method claim if one could simply say well you know you're associated with that person and contributed to their having performed th steps and that's enough to hold you liable as a direct infringer and so i think that it's critical to maintaining what congress intended in terms of the division between direct and indirect and frenchmen to maintain th nobody objected to a direction in control the jury found there was infringement and there is substantial evidence i submit that there was at the very least direction and the direction comes for all the reasons i mentioned it was direction in the extreme and in this case there were they were told what to do they were given a task they were told how apply the tag they were given engineers to help them apply the tag and holy  side from what i feel is a contract which should apply for those who actually use it not for those who don't use it those who used it were bound by this contract to perform certain things but other than that are processed before you move on and if we should agree with everything that you just said what is it suggest that this court would hold and the particular question i have is are there other open issues that were presented on appeal that either weren't pressed by the panel needs to be or what because we didn't look jury verdicts i don't think there are any open issues as to the claims we're talking about on this appeal now as to i'd like to i'd like to address the the claim construction point that just talked about twice but the fact is it's not only because not only the gold in our case the peerless case the shiels case if you look at the claims in those cases they were designed to be acted on by one party and clever outsourcing wanted to steps no matter how you like those claims there could be a problem war over this invention the invention the akamai case and many other inventions are by their very nature joint inventions the whole concept is to have two people operate so that you give one party expanded capacity by permitting him to shift demand for the objects from his or her servers to somebody else's service  two if you're going to particularly point out distinctly claiming that invention you need to be able to claim a joint invention and it is it is totally an arbitrary thing i suggest to cut that off and prevent people from doing that  acknowledges that i think he's wrong on the single act rule he construes whoever it to mean that each party must individually infringe the commentators in the cases and support that but he's already bridged the cross the line he's already said that it's ok to have agency or contract if you look at the restatement of agency section two twelve they tell you that they talk about directions and they say it's not dependent on the law of agency so the c to agency and i think that once the line is crossed there's no logical reason to stop the line at the point at which he says it should be stopped he mentioned that the early the two cases are contributory infringement cases a so me as in my peerless if you look at peerless they may have used the word contributory infringement but that was not a contributory infringement case there were two actors they divided there was no direct infringement under his definition i i said then your honour's given the law as it existed before nine hundred fifty two given the commentators given the restatement given given the logic of the situation given the huge gaping hole that is created by this arbitrary rule i suggest that there is no reason to draw the line as you do but even if you do we can satisfy the direction of control