Court Opinion

ID: 2827019
Source: CourtListenerOpinion
Date Created: 2015-08-13 16:01:35.037105+00
Date Added: 2024-06-11T10:20:33.509808
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
                ______________________

        AKAMAI TECHNOLOGIES, INC.,
      THE MASSACHUSETTS INSTITUTE 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 Nos. 06-CV-11585, 06-CV-
11109, Judge Rya W. Zobel.
                ______________________

               Decided: August 13, 2015
                ______________________

   SETH P. WAXMAN, Wilmer Cutler Pickering Hale and
Dorr LLP, Washington, DC, argued for plaintiffs-
appellants. Also represented by THOMAS G. SAUNDERS,
THOMAS G. SPRANKLING; MARK C. FLEMING, ERIC F.
FLETCHER, LAUREN B. FLETCHER, BROOK HOPKINS, Boston,
MA; DAVID H. JUDSON, Law Offices of David H. Judson,
Dallas, TX; DONALD R. DUNNER, ELIZABETH D. FERRILL,
Finnegan, Henderson, Farabow, Garrett & Dunner, LLP,
Washington, DC; JENNIFER S. SWAN, Palo Alto, CA;
ROBERT S. FRANK, JR., G. MARK EDGARTON, CARLOS
2   AKAMAI TECHNOLOGIES, INC.   v. LIMELIGHT NETWORKS, INC.

PEREZ-ALBUERNE, Choate, Hall & Stewart, LLP, Boston,
MA.

    AARON M. PANNER, Kellogg, Huber, Hansen, Todd,
Evans & Figel, P.L.L.C., Washington, DC, argued for
defendant-cross-appellant. Also represented by JOHN
CHRISTOPHER ROZENDAAL, MICHAEL E. JOFFRE; MICHAEL
W. DE VRIES, ALLISON W. BUCHNER, Kirkland & Ellis
LLP, Los Angeles, CA; YOUNG JIN PARK, New York, NY;
DION D. MESSER, Limelight Networks, Inc., Tempe, AZ.

    JEFFREY I.D. LEWIS, Fried, Frank, Harris, Shriver &
Jacobson LLP, New York, NY, for amicus curiae Ameri-
can Intellectual Property Law Association. Also repre-
sented by KRISTIN M. WHIDBY, Washington, DC; LISA K.
JORGENSON, American Intellectual Property Law Associa-
tion, Arlington, VA.

    SCOTT A.M. CHAMBERS, Porzio, Bromberg & Newman,
P.C., Washington, DC, for amicus curiae Biotechnology
Industry Organization. Also represented by CAROLINE
COOK MAXWELL; HANSJORG SAUER, Biotechnology Indus-
try Organization, Washington, DC.

    CHARLES R. MACEDO, Amster Rothstein & Ebenstein
LLP, New York, NY, for amicus curiae Broadband iTV,
Inc. Also represented by JESSICA CAPASSO.

    PAUL H. BERGHOFF, McDonnell, Boehnen, Hulbert &
Berghoff, LLP, Chicago, IL, for amicus curiae Intellectual
Property Owners Association. Also represented by PHILIP
S. JOHNSON, Johnson & Johnson, New Brunswick, NJ;
KEVIN H. RHODES, 3M Innovative Properties Co., St. Paul,
MN; HERBERT C. WAMSLEY, Intellectual Property Owners
Association, Washington, DC.

   CARTER G. PHILLIPS, Sidley Austin LLP, Washington,
DC, for amicus curiae Pharmaceutical Research and
AKAMAI TECHNOLOGIES, INC.   v. LIMELIGHT NETWORKS, INC.   3

Manufacturers of America. Also represented by JEFFREY
P. KUSHAN, RYAN C. MORRIS; DAVID E. KORN, Pharmaceu-
tical Research and Manufacturers of America, Washing-
ton, DC; DAVID R. MARSH, LISA A. ADELSON, Arnold &
Porter, LLP, Washington, DC; ROBERT P. TAYLOR, MONTY
AGARWAL, San Francisco, CA.

   DEMETRIUS TENNELL LOCKETT, Townsend & Lockett,
LLC, Atlanta, GA, for amici curiae Nokia Technologies Oy
and Nokia USA Inc.

    DONALD R. WARE, Foley Hoag LLP, Boston, MA, for
amicus curiae The Coalition for 21st Century Medicine.
Also represented by MARCO J. QUINA, SARAH S. BURG.
                 ______________________

Before PROST, Chief Judge, NEWMAN, LOURIE, LINN, DYK,
MOORE, O’MALLEY, REYNA, WALLACH, and HUGHES, Circuit
                       Judges. *
PER CURIAM.
    This case was returned to us by the United States Su-
preme Court, noting “the possibility that [we] erred by too
narrowly circumscribing the scope of § 271(a)” and sug-
gesting that we “will have the opportunity to revisit the
§ 271(a) question . . . .” Limelight Networks, Inc. v. Aka-
mai Techs., Inc., 134 S. Ct. 2111, 2119, 2120 (2014). We
hereby avail ourselves of that opportunity.
    Sitting en banc, we unanimously set forth the law of
divided infringement under 35 U.S.C. § 271(a). We con-
clude 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.
4       AKAMAI TECHNOLOGIES, INC.   v. LIMELIGHT NETWORKS, INC.

directly infringes U.S. Patent 6,108,703 (the “’703 patent”)
under § 271(a). We therefore reverse the district court’s
grant of judgment of noninfringement as a matter of law.
                  I. DIVIDED INFRINGEMENT
    Direct infringement under § 271(a) occurs where all
steps of a claimed method are performed by or attributa-
ble 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 at-
tributable to the other such that a single entity is respon-
sible 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 infringe-
ment—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 tradi-
tional 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 in-
stances, 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 vicari-
ously 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 arrange-
ments, 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.
          II. APPLICATION TO THE FACTS OF THIS CASE
    Today we outline the governing legal framework for
direct infringement and address the facts presented by
this case. In the future, other factual scenarios may arise
which warrant attributing others’ performance of method
steps to a single actor. Going forward, principles of at-
tribution are to be considered in the context of the partic-
ular 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.   v. LIMELIGHT NETWORKS, INC.   7

    The facts of this case need not be repeated in detail
once again, but the following 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 patent,
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
methods. For example, as for claim 34 of the ’703 patent,
Limelight performs 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 directs or controls 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 Aka-
mai had presented substantial evidence that Limelight
directed or controlled its customers. After we decided
Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed.
Cir. 2008), the district court granted Limelight’s motion
for reconsideration, holding as a matter of law that 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, Aka-
mai presented substantial 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’ performance. We
8   AKAMAI TECHNOLOGIES, INC.   v. LIMELIGHT NETWORKS, INC.

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. These 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 [Limelight network].” J.A.
17807. In addition, the contract requires that Limelight’s
customers “provide [Limelight] with all cooperation 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 customers’ failure to serve content. See id.
If a customer’s server is down, Limelight’s content deliv-
ery network need not perform. Thus, if Limelight’s cus-
tomers wish to use Limelight’s product, they must tag and
serve content. Accordingly, substantial evidence 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 Lime-
light 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 particu-
lar, the welcome letter tells the customer that a Technical
Account Manager 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] into [its]
webpages.” J.A. 17237; 17790. This integration process
AKAMAI TECHNOLOGIES, INC.   v. LIMELIGHT NETWORKS, INC.    9

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 pre-
cise 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 evidence that
Limelight’s engineers continuously engage with custom-
ers’ activities. Initially, Limelight’s engineers assist with
installation and perform quality assurance testing. J.A.
17790. The engineers remain available if the customer
experiences any problems. J.A. 17235. In sum, Lime-
light’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 at-
tributable to Limelight. Therefore, Limelight is liable for
direct infringement.
                     III. CONCLUSION
     At trial, Akamai presented substantial evidence from
which a jury could find that Limelight directly 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 appeal and cross-appeal
remain, we return the case to the panel for resolution of
all residual issues consistent with this opinion.