# United States Court of Appeals **for the Federal Circuit**

______________________ AKAMAI TECHNOLOGIES, INC. , THE MASSACHUSETTS IN STITUTE OF TECHNOLOGY, Plaintiffs

- Appellants

v.

LIMELIGHT NETWORKS, INC., Defendant

- Cross

- Appellant

______________________

2009

- 1372, 2009

- 1380
, 2009

- 1416, 2009

- 1417

______________________ Appeals from the United States District Court for the District of Massachusetts in No s . 06

- CV

- 11585
, 06

- CV

11109 , Judge Rya W. Zobel.

______________________

Decided: August 13, 2015

______________________
S ETH P. W AXMAN , Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, argued for plaintiffs

appellants. Also represented by T HOMAS G. S AUNDERS , T HOMAS G. S PRANKLING ; M ARK C. F LEMING , E RIC F. F LETCHER , L AUREN B. F LETCHER , B ROOK H OPKINS , Boston, MA; D AVID H. J UDSON , Law Office s of David H. Judson, Dallas, T X; D ONALD R. D UNNER , E LIZABETH D. F ERRILL , Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, Washingt on, DC; J ENNIFER S. S WAN , Palo Alt o, CA; R OBERT S. F RANK , J R ., G. M ARK E DGARTON , C ARLOSAKAMAI TECHNOLOGIES , INC

. v. LIMELIGHT NETWORKS , INC

. 2

P EREZ -A LBUERNE , Choate , Hall & Stewart, LLP, Boston, M A.

A

ARON M. P ANNER , Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C., Washington, DC , a rgued for defendant

- cross

- appellant. Also represented by J OHN C HRISTOPH ER R OZENDAAL , M ICHAEL E. J OFFRE ; M ICHAEL W. D E V RIES , A LLISON W. B UCHNER , Kirkland & Ellis LLP , Los Angeles, CA; Y OUNG J IN P ARK , New York, NY; D ION D. M ESSER , Limelight Networks, Inc.

, Tempe, AZ

.

J EFFREY I.D. L EWIS , Fried, Frank, Harris, Shriver & Jacobson LLP, New York, NY, for amicus curiae Amer ican Intellectual Property Law Association. Also repr esented by K RISTIN M. W HIDBY , Washington, DC ; L ISA K. J ORGENSON , American Intellectual Property Law Associ ation, Arlington, VA.

S COTT A.M. C HAMBERS , Porzio, Bromberg & Newman, P.C. , Washington, DC , for amicus curiae Biotechnology Industry Organization. Also represented by C AROLINE C OOK M AXWELL ; H ANS JORG S AUER , Biotechnology Indu stry Organization, Washi ng ton, D C.

C HARLES R. M ACEDO , Amster Rothstein & Ebenstein LLP, New York, NY, for amicus curiae Broadband iTV, Inc. Also represented by J ESSICA C APASSO

.

P AUL H. B ERGHOFF , McDonnell, Boehnen, Hulbert & Berghoff , LLP, Chicago, IL, for amicus curiae Intellectual Property Owners Association. Also represented by P HILIP S. J OHNSON , Johnson & Johnson, New Brunswick, NJ; K EVIN H. R HODES , 3M Innovative Properties Co. , St. Paul, MN; H ERBERT C. W AMSLEY , Intellectual Prop erty Own ers Association, Washington, D C.

C ARTER G. P HILLIPS , S idley Austin LLP, Washington, DC , for amicus curiae Pharmaceutical Research andAKAMAI TECHNOLOGIES , INC

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Manufacturers of America. Also represented by J EFFREY P. K USHAN , R YAN C. M ORRIS ; D AVID E. K ORN , Pharmace utical R esearch and Manufacturers of America, Washin gton, DC ; D AVID R. M ARSH , L ISA A. A DELSON , Arno ld & Porter, LLP, Washington, DC ; R OBERT P. T AYLOR , M ONTY A GARWAL , San Francisco, CA

.

D EMETRIUS T ENNELL L OCKETT , Townsend & Locke tt, LLC, Atlanta, GA, for amici cur iae Nokia T echnologies Oy and Nokia USA Inc.

D ONALD R. W ARE , Foley Hoag LLP, Boston, MA, for

am icus curiae The Coalition for 21st Century Medicine. Also represented by M ARCO J. Q UINA , S ARAH S. B URG

.

______________________
Before P ROST , Chief Judge

, N EWMAN , L OURIE , L INN , D YK , M OORE , O’M ALLEY , R EYNA , W ALLACH , and H UGHES , Circuit Judges

. *

P ER C URIAM

. This case was returned to us by the United States S upreme Court, noting “the possibility that [we] erred by too narrowly circumscribing the scope of § 271(a)” and su ggesting that we “will have the opportunity to revisit the § 271(a) question .

. . .” Limelight Networks, Inc. v. Ak amai Techs., Inc. , 134 S. Ct. 2111, 2119, 2120 (2014) . We hereby avail ourselves of that opportunity.
Sitting e n banc , we unanimously set forth the law of divided infringement under 35 U.S.C. § 271(a)

. We co nclude that, in this case, substantial evidence supports the jury’s finding that Limelight Networks, Inc. (“Limelight”)

* Circuit Judges Taranto, Chen, and Stoll did not participate.AKAMAI TECHNOLOGIES , INC

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dir ectly infringes U.S. Patent 6,10 8,703 (the “’70 3 patent”) under § 271(a). We therefore reverse the district court’s grant of judgment of noninfringement as a matter of law.

I. D IVIDED I NFRINGEMENT Direct infringement under § 271(a) occurs where all steps of a claimed method are performed by or attribut able to a single entity. See BMC Res., Inc. v. Paymentech, L.P. , 498 F.3d 1373, 1379

– 81 (Fed. Cir. 2007). Where more than one actor is invol ved in practicing the steps, a court must determine whether the acts of one are a ttributable to the other such that a single entity is respo nsible for the infringement. We will hold an entity responsible for others’ performance of method steps in two sets of circumstances: (1) where that entity directs or controls others’ performance, and (2) where the actors form a joint enterprise. 1

To determine if a single entity directs or controls the acts of another, we continue to consider general principles of vicarious liability. 2 See BMC , 498 F.3d at 1379

. In the

1 To the extent that our decision in Golden Hour Data Systems, Inc. v. emsCharts, Inc. , 614 F.3d 1367 (Fed. Cir. 2010) is inconsistent with this conclusion, that aspect of Golden Hour is overruled.

2 We note that previous cases’ use of the term “v icarious liability” is a misnomer. Restatement (Third) of Torts: Apportionment of Liability § 13 (2000). In the context of joint patent infringement, an alleged infringer is not liable for a third party’s commission of infring ement

— rather, an alleged infringer is responsible for method steps performed by a third party. Accordingly, we recognize that vicarious liability is not a perfect analog. Nevertheless, as both vicarious liability and joint patent infringement discern when the activities of one entity areAKAMAI TECHNOLOGIES , INC

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past, we have held that an actor is liable for infringement under § 271(a) if it acts through an agent (applying trad itional agency principles) or contracts with another to perform one or more steps of a claimed method. See BMC

, 498 F.3d at 1380

– 81. We conclude, on the facts of this case, that liabil ity under § 271(a) can also be found when an alleged infringer conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance. Cf. Metro -Gol dwyn

- Mayer Studios Inc. v. Grokster, Ltd. , 545 U.S. 913, 930 (2005) ( stating that an actor “infringes vicariously by profiting from direct infringement” if that actor has the right and ability to stop or limit the infringement). In those i nstances
, the th ird party’s actions are attributed to the alleged infringer such that the alleged infringer becomes the single actor chargeable with direct infringement. Whether a single actor directed or controlled the acts of one or more third parties is a question of fact, reviewable on appeal for substantial evidence , when tried to a jury

. Alternatively, w here two or more actors form a joint enterprise, all can be charged with the acts of the other, rendering each liable for the steps performed by the othe r as if each is a single actor. See Restatement (Second) of Torts § 491 cmt. b (“The law

. . . considers that each is the agent or servant of the others, and that the act of any one within the scope of the enterprise is to be charged vicar iously against the rest.”)

. A joint enterprise r equires proof of four elements:
(1) an agreement, express or implied, among the members of the group;

attributable to another, we derive our direction or control standard from vicarious lia bility law. See BMC , 498 F.3d at 1379.AKAMAI TECHNOLOGIES , INC

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(2) a common purpose to be carried out by the
group; (3) a community of pecuniary interest in that purpose, among the members; and (4) an equal right to a voice in the direction of the enterprise, which gives an equal right of co ntrol.

Id. § 491 cmt. c . As with direction or control, whether actors entered into a joint enterprise is a question of fact, reviewable on appeal for subst antial evidence. Id

. (“Whether these elements exist is frequently a question for the jury, under proper direction from the court.”).

We believe th ese approach es to be most consistent with the text of § 271(a), the statutory context in which it appears, th e legislative purpose behind the Patent Act, and our past case law. Section 271(a) is not limited solely to principal

- agent relationships, contractual arrang ements, and joint enterprise

, as the vacated panel decision held. 3 Rather, to determine direct in fringement, we consider whether all method steps can be attribu ted to a single entity.

II. A PPLICATION TO THE F ACTS OF T HIS C ASE Today we outline the governing legal framework for direct infringement and address the facts presented by this case. In the f uture, other factual scenarios may arise which warrant attributing others’ performance of method steps to a single actor. Going forward, principles of a ttribution are to be considered in the context of the parti cular facts presented

.

3 To the extent our prior cases formed the predicate for the vacated panel decision, those decisions are also overruled.AKAMAI TECHNOLOGIES , INC

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The facts of this cas e need not be repeated in detail once again, but the followin g constitutes the basic facts

. In 2006, Akamai Technologies, Inc. (“Akamai”) filed a patent infringement action against Limelight alleging infringement of several patents, including the ’703 pat ent, which claims methods for delivering content over the Internet. The case proceeded to trial, at which the parties agreed that Limelight’s customers

— not Limelight

— perform the “tagging” and “serving” steps in the claimed method s. For example, as for cl aim 34 of the ’703 patent, Limelight perform s every step save the “tagging” step, in which Limelight’s customers tag the content to be hosted and delivered by Limelight’s content delivery network. After the close of evidence, the district judge instructed the jury that Limelight is responsible for its customers’ performance of the tagging and serving method steps if Limelight direct s or control s its customers’ activities. The jury found that Limelight infringed claims 19, 20, 21, and 34 of the ’703 patent . Following post

- trial motions, the district court first denied Limelight’s motion for judgment of noninfringement as a matter of law, ruling that Ak amai ha d presented substantial evidence that Limelight directed or controlled its customers. After we dec ided Muniauction, Inc. v. Thomson Corp.

, 532 F.3d 1318 (Fed

. Cir. 2008) , the district court granted Limelight’s motion for r econsideration

, holding as a matter of law t hat there could be no liability

. We reverse and reinstate the jury verdict . The jury heard substantial evidence from which it could find that Limelight directs or controls its customers’ performance of each remaining method step, such that all steps of the method are attributable to Limelight. Specifically, Ak amai presented su bstantial evidence demonstrating that Limelight conditions its customers’ use of its content delivery network upon its customers’ performance of the tagging and serving steps, and that Limelight establishes the manner or timing of its customers’ performanc e. WeAKAMAI TECHNOLOGIES , INC

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review the evidence supporting “conditioning use of the content delivery network” and “establishing the manner or timing of performance” in turn.
First, the jury heard evidence that Limelight requires all of its customers to sign a standard contract

. The contract delineates the steps customers must perform if they use the Limelight service . Th e se steps include tagging and serving content. As to tagging, Limelight’s form contract provides: “Customer shall be responsible for identifying via the then current [Limelight] process all [URLs] of the Customer Content to enable such Customer Content to be delivered by the [Lime light network] .” J.A. 17807. In addition, the contract requires that Limelight’s customers “provide [Limelight] with all cooperati on and information reasonably necessary for [Limelight] to implement the [Content Delivery Service].” Id . As for the serving step, the form contract states that Limelight is not responsible for failures in its content delivery network caused by its custo mers’ failure to serve content. See id

. If a customer’s server is down, Limelight’s content deli very network need not perform. Thus, if Limelight’s cu stomers wish to use Limelight’s product, they must tag and serve content. Accordingly, substantial evi dence indicates that Limelight conditions customers’ use of its content delivery network upon its customers’ performance of the tagging and serving method steps. Substantial evidence also supports finding that Lim elight established the manner or timing of its customers’ performance. Upon completing a deal with Limelight, Limelight sends its customer a welcome letter instructing the customer how to use Limelight’s service. In partic ular, the welcome letter tells the customer that a Technical Account Manage r employed by Limelight will lead the implementation of Limelight’s services. J.A. 17790. The welcome letter also contains a hostname assigned by Limelight that the customer “integrate[s] in to [its] webpages.” J.A. 17237; 17790. This integration proces sAKAMAI TECHNOLOGIES , INC

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includes the tagging step. Moreover, Limelight provides step

- by

- step instructions to its customers telling them how to integrate Limelight’s hostname into its webpages if the customer wants to act as the origin for content. J.A. 17220. If Limelight’s customers do not follow these pr ecise steps, Limelight’s service will not be available . J.A. 587 at 121:22

– 122:22. Limelight’s Installation Guidelines give Limelight customers further information on tagging content. J.A. 17791. Lastly, the jury heard e vidence that Limelight’s engineers continuously engage with custo mers’ activities. Initially, Limelight’s engineers assist with installation and perform quality assurance testing. J.A. 17790. The engineers remain available if the customer experiences an y problems. J.A. 17235. In sum, Lim elight’s customers do not merely take Limelight’s guidance and act independently on their own. Rather, Limelight establishes the manner and timing of its customers’ performance so that customers can only avail themselves of the service upon their performance of the method steps

. We conclude that the facts Akamai presented at trial constitute substantial evidence from which a jury could find that Limelight directed or controlled its customers’ performance of each remaining method step. As such, substantial evidence supports the jury’s verdict that all steps of the claimed methods were performed by or a ttributable to Limelight. Therefore, Limelight is liable for direct infringement.

III. C ONCLUSION
At tria l, Akamai presented substantial evidence from which a jury could find that Limelight direc tly infringed the ’703 patent. Therefore, we reverse the district court’s grant of judgment of noninfringement as a matter of law. Because issues in the original ap peal and cross

- appeal remain, we return the case to the panel for resolution of all residual issues consistent with this opinion.