IP News from the Supreme Court – December 2013

IP News from the Supreme Court – December 2013

When the US Supreme Court elects to weigh in on matters of intellectual property, the legal landscape awaits their every word with bated breath.  Two matters of the kind are currently before the Supreme Court: divided patent infringement liability and patentability of software.  The adventure is just beginning.

            Divided Patent Infringement Liability:

The Supreme Court may soon hear arguments in the case of Limelight Networks, Inc. v. Akamai Technologies, Inc.  The case deals with issues pertinent to patent infringement.  Patent holders have a right to sue others infringing (i.e. making, selling, or using) a patented invention.  But what happens when none of the parties directly infringes a patent?  For instance, if a patent claims an invention “A+B,” and one party does “A” while another party does “B,” but neither party does the full “A+B,” what sort of infringement occurs?  Who is liable, if anyone?

In Limelight v. Akamai, Supreme Court will look to whether it ought to answer these questions.  The case involves infringement of the “joint” or “divided” variety – where at least two entities collaborate to practice each step of a method claim.  The parties in this case include Akamai, a licensee of MIT’s patents, and Limelight, a direct competitor of Akamai’s.  Akamai is the patent holder on an invention directed to an improved method of delivering content of a web page.

Akamai asserts that Limelight performed nearly all of the steps of its invention while the customers of Limelight performed the remaining steps.  Akamai further asserts that Limelight directs its customers to perform said remaining steps.  The U.S. District Court of the District of Massachusetts found that Limelight sufficiently directed its customers to perform the remaining steps and, as a result, ruled that Limelight directly infringed Akamai’s patent.

However, the Federal Circuit, in another case, held that a single party must perform every step of a claimed method in order to justify a finding of direct infringement.  The Federal Circuit applied this reasoning to the present case and found that Limelight did not directly infringe Akamai’s patent.  However, it remanded to the District Court – that is, instructed the District Court to reconsider the question of whether Limelight ought to be liable for inducing infringement of the Akamai patent.

So… what happens now?  Both Limelight and Akamai petitioned the Supreme Court for answers.  Limelight questions whether a party can be liable for inducing patent infringement even though not one party has committed direct infringement.  Akamai questions whether a finding of infringement by a single entity is necessary in order to determine whether induced infringement has occurred.  We look forward to learning more from the Supreme Court on this case.  How do you think they should rule?

Patentability of Software:

The Supreme Court will weigh in on the issue of software patenting when it decides Alice Corporation Pty. Ltd. v. CLS Bank International, et al.  The case involves a computer-implemented invention.  A majority of justices on the Federal Circuit bench struck down Alice Corporation’s claims to software.  However, a few justices included poignant opinions of partial dissent and full dissent, questioning the majority’s rejection of software patent eligibility, leaving many patent practitioners to wonder whether a final resolution on the topic of software patent eligibility would ever arise.  The Supreme Court will aim to clarify its stance on whether inventors can earn patents on processes of the sort.  The most commonly-used test for determining whether a process is patentable is the “machine-or-transformation” test – that is, evaluating whether a process is either tied to a machine or transforms an article into a different state or thing.

In 2010, the Supreme Court issued an opinion on appeal in the case of In re Bilski.  The Court ruled that courts ought not to rely upon the “machine-or-transformation” test as the sole test for process patent eligibility.  Will the Supreme Court furnish an additional test this time?  Fortunately, the Supreme Court recognized the importance of the hotly-contested issue, granted a writ of certiorari in the Alice v. CLS case and will most likely offer some much-needed clarity.  Until the Court delivers its opinion, one can expect the debate to rage on throughout the patent system.  Fasten your seat belts.

(Neeraj Joshi)

 

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