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Broadening the Law of Inducement in Patent Infringement Cases

In recent en banc Federal Circuit decisions (Akamai Tech. v. Limelight Networks; Mckesson Tech. v. Epic Systems), the court appeared to make minor changes to the previous law for inducement in patent infringement cases. In particular, the court rejects the prior rule that inducement requires a party to prove that a single actor directly infringed a patent. Instead, the underlying direct infringement (in method patent claims) may still lead to inducement as long as all of the steps of the method were actually performed. Basically, parties no longer have to prove that all the steps were committed by one entity.

Under 35 U.S.C § 271(b), “[w]hoever actively induces infringement of a patent shall be liable as an infringer.” Prior to these cases, the Federal Circuit had repeated emphasized that inducement requires 1) knowledge and 2) actual direct infringement. This case was different because the accused infringer allegedly knowingly encouraged several different parties to perform different steps of a patented method. Now, the new rule requires 1) knowledge, 2) induced performance of the steps of the methods, and 3) actual performance of those steps. As a corollary, the accused infringer will be liable if it induces performance of some steps while performing the rest of the steps himself.

As many commentators have noted, this decision is narrow but closes a loophole in patent infringement, especially for companies that knowingly take advantage of a patented invention in order to avoid paying licensing fees. The opinion was limited to the allegations of inducement and the court did not address issues related to joint direct patent infringement.

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