Opinion ID: 2827019
Heading Depth: 1
Heading Rank: 1

Heading: divided infringement

Text: Direct infringement under § 271(a) occurs where all steps of a claimed method are performed by or attributable 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 involved in practicing the steps, a court must determine whether the acts of one are attributable to the other such that a single entity is responsible 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 “vi- carious 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 infringement—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 are AKAMAI TECHNOLOGIES, INC. v. LIMELIGHT NETWORKS, INC. 5 past, we have held that an actor is liable for infringement under § 271(a) if it acts through an agent (applying traditional 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 liability 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-Goldwyn-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 instances, the third 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, where 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 other 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 vicariously against the rest.”). A joint enterprise requires 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 liability law. See BMC, 498 F.3d at 1379. 6 AKAMAI TECHNOLOGIES, INC. v. LIMELIGHT NETWORKS, INC. (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 con- trol. 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 substantial evidence. Id. (“Whether these elements exist is frequently a question for the jury, under proper direction from the court.”). We believe these approaches to be most consistent with the text of § 271(a), the statutory context in which it appears, the legislative purpose behind the Patent Act, and our past case law. Section 271(a) is not limited solely to principal-agent relationships, contractual arrangements, and joint enterprise, as the vacated panel decision held. 3 Rather, to determine direct infringement, we consider whether all method steps can be attributed to a single entity.