Monday, June 9, 2014

Patent Infringement: The single actor for direct infringement rule is going away

     Last week, the U.S. Supreme Court reversed the Court of Appeals for the Federal Circuit in Limelight Networks, Inc. v. Akamai Technologies, Inc. et al., 572 U.S. ___ (2014) (slip opinion, June 2, 2014).  In that case, the Supreme Court rebuked the Court of Appeals for allegedly expanding liability for inducing infringement of a patent claim when no one has directly infringed the patent claim.  The Supreme Court reiterated its position that there can be liability for inducing infringement unless someone directly infringed a patent claim.

     This case will likely herald the change of another Federal Circuit precedent.  In its conclusion, the Supreme Court suggested that, on remand, the Federal Circuit will have the opportunity to revisit the §271(a) question – whether there was direct infringement.  By making this suggestion, the Supreme Court hinted the Federal Circuit should examine the contours of direct infringement, in particular, the Federal Circuit's precedent that direct infringement occurs only when there is a single actor who directly or vicariously committed all the acts necessary to infringe a patent claim.  BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373, 1381 (Fed. Cir. 2007). It was this same precedent that Judge Newman's had criticized in her dissent.

     Given the Supreme Court's suggestion, I believe the Court of Appeals will overturn the BMC single actor rule on remand, and in doing so, strengthen the rights of patent owners.

- HP

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