Limelight Networks, Inc. v. Akamai Technologies, Inc.

(Slip Opinion)              OCTOBER TERM, 2013                                       1

                                       Syllabus

         NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
       being done in connection with this case, at the time the opinion is issued.
       The syllabus constitutes no part of the opinion of the Court but has been
       prepared by the Reporter of Decisions for the convenience of the reader.
       See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.


SUPREME COURT OF THE UNITED STATES

                                       Syllabus

          LIMELIGHT NETWORKS, INC. v. AKAMAI 

               TECHNOLOGIES, INC., ET AL. 


CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
                THE FEDERAL CIRCUIT

       No. 12–786.      Argued April 30, 2014—Decided June 2, 2014
Akamai Technologies, Inc., a respondent here, is the exclusive licensee
 of a patent that claims a method of delivering electronic data using a
 content delivery network (CDN). Petitioner, Limelight Networks,
 Inc., also operates a CDN and carries out several of the steps claimed
 in the patent, but its customers, rather than Limelight itself, perform
 a step of the patent known as “tagging.” Under Federal Circuit case
 law, liability for direct infringement under 35 U. S. C. §271(a) re-
 quires performance of all steps of a method patent to be attributable
 to a single party. This position was most recently refined in Mu-
 niauction, Inc. v. Thomson Corp., 532 F. 3d 1318. The District Court
 concluded that Limelight could not have directly infringed the patent
 at issue because performance of the tagging step could not be at-
 tributed to it. The en banc Federal Circuit reversed, holding that a
 defendant who performed some steps of a method patent and encour-
 aged others to perform the rest could be liable for inducement of in-
 fringement even if no one was liable for direct infringement. The en
 banc court concluded that the evidence could support liability for
 Limelight on an inducement theory and remanded for further pro-
 ceedings.
Held: A defendant is not liable for inducing infringement under §271(b)
 when no one has directly infringed under §271(a) or any other statu-
 tory provision. Pp. 4–11.
    (a) Liability for inducement must be predicated on direct infringe-
 ment. Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U. S.
 336, 341. Assuming that Muniauction’s holding is correct, respond-
 ents’ method has not been infringed because the performance of all of
 its steps is not attributable to any one person. Since direct infringe-
2              LIMELIGHT NETWORKS, INC. v. AKAMAI
                      TECHNOLOGIES, INC.

                            Syllabus


    ment has not occurred, there can be no inducement of infringement
    under §271(b). The Federal Circuit’s contrary view would deprive
    §271(b) of ascertainable standards and require the courts to develop
    two parallel bodies of infringement law. This Court’s reading of
    §271(b) is reinforced by §271(f)(1), which illustrates that Congress
    knows how to impose inducement liability predicated on non-
    infringing conduct when it wishes to do so. The notion that conduct
    which would be infringing in altered circumstances can form the ba-
    sis for contributory infringement has been rejected, see Deepsouth
    Packing Co. v. Laitram Corp., 406 U. S. 518, 526–527, and there is no
    reason to apply a different rule for inducement. Pp. 4–7.
       (b) Respondents claim that principles from tort law and criminal
    aiding and abetting doctrine, as well as patent law principles in ex-
    istence before the 1952 Patent Act, support the Federal Circuit’s
    reading of the statute, but their arguments are unpersuasive.
    Though a would-be infringer could evade liability by dividing perfor-
    mance of a method patent’s steps with another whose conduct cannot
    be attributed to the defendant, this is merely a result of the Federal
    Circuit’s interpretation of §271(a), and a desire to avoid this conse-
    quence does not justify fundamentally altering the rules of induce-
    ment liability clearly required by the Patent Act’s text and structure.
    Pp. 8–10.
       (c) Because the question presented here is clearly focused on
    §271(b) and presupposes that Limelight has not committed direct in-
    fringement under §271(a), the Court declines to address whether the
    Federal Circuit’s decision in Muniauction is correct. P. 10.
692 F. 3d 1301, reversed and remanded.

    ALITO, J., delivered the opinion for a unanimous Court.
                        Cite as: 572 U. S. ____ (2014)                              1

                             Opinion of the Court

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SUPREME COURT OF THE UNITED STATES
                                   _________________

                                   No. 12–786
                                   _________________


    LIMELIGHT NETWORKS, INC., PETITIONER v.

       AKAMAI TECHNOLOGIES, INC., ET AL. 

 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 

           APPEALS FOR THE FEDERAL CIRCUIT

                                 [June 2, 2014]


  JUSTICE ALITO delivered the opinion of the Court.
  This case presents the question whether a defendant
may be liable for inducing infringement of a patent under
35 U. S. C. §271(b) when no one has directly infringed the
patent under §271(a) or any other statutory provision.
The statutory text and structure and our prior case law
require that we answer this question in the negative. We
accordingly reverse the Federal Circuit, which reached the
opposite conclusion.
                               I

                               A

   Respondent the Massachusetts Institute of Technology
is the assignee of U. S. Patent No. 6,108,703 (’703 patent),
which claims a method of delivering electronic data using
a “content delivery network,” or “CDN.” Respondent
Akamai Technologies, Inc., is the exclusive licensee.
Akamai maintains many servers distributed in various
locations. Proprietors of Web sites, known as “content
providers,” contract with Akamai to deliver their Web
sites’ content to individual Internet users. The ’703 patent
provides for the designation of certain components of a
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                    TECHNOLOGIES, INC.

                     Opinion of the Court 


content provider’s Web site (often large files, such as video
or music files) to be stored on Akamai’s servers and ac-
cessed from those servers by Internet users. The process
of designating components to be stored on Akamai’s serv-
ers is known as “tagging.” By “aggregat[ing] the data
demands of multiple content providers with differing peak
usage patterns and serv[ing] that content from multiple
servers in multiple locations,” 614 F. Supp. 2d 90, 96
(Mass. 2009), as well as by delivering content from servers
located in the same geographic area as the users who are
attempting to access it, Akamai is able to increase the
speed with which Internet users access the content of its
customers’ Web sites.
  Petitioner Limelight Networks, Inc., also operates a
CDN and carries out several of the steps claimed in the
’703 patent. But instead of tagging those components of its
customers’ Web sites that it intends to store on its servers
(a step included in the ’703 patent), Limelight requires its
customers to do their own tagging.1 Respondents claim
that Limelight “provides instructions and offers technical
assistance” to its customers regarding how to tag, 629
F. 3d 1311, 1321 (CA Fed. 2010), but the record is undis-
puted that Limelight does not tag the components to be
stored on its servers.
                           B
  In 2006, respondents sued Limelight in the United
States District Court for the District of Massachusetts,
claiming patent infringement. The case was tried to a
jury, which found that Limelight had committed infringe-
ment and awarded more than $40 million in damages.
  Respondents’ victory was short-lived, however. After
——————
    1 In
      its brief, Limelight disputes whether its customers actually “tag”
within the meaning of the patent. Brief for Petitioner 7, n. 4. We
assume arguendo that Limelight’s customers do in fact “tag” within the
patent’s meaning.
                 Cite as: 572 U. S. ____ (2014)           3

                     Opinion of the Court

the jury returned its verdict, the Federal Circuit decided
Muniauction, Inc. v. Thomson Corp., 532 F. 3d 1318
(2008). In that case the Court of Appeals rejected a claim
that the defendant’s method, involving bidding on finan-
cial instruments using a computer system, directly in-
fringed the plaintiff ’s patent. The defendant performed
some of the steps of the patented method, and its custom-
ers, to whom the defendant gave access to its system along
with instructions on the use of the system, performed the
remaining steps. The court started from “the proposition
that direct infringement requires a single party to perform
every step of a claimed method.” Id., at 1329. This re-
quirement is satisfied even though the steps are actually
undertaken by multiple parties, the court explained, if a
single defendant “exercises ‘control or direction’ over the
entire process such that every step is attributable to the
controlling party.” Ibid. The court held that the defend-
ant in Muniauction was not liable for direct infringement
because it did not exercise control or direction over its
customers’ performance of those steps of the patent that
the defendant itself did not perform. Id., at 1330.
   In light of Muniauction, Limelight moved for reconsid-
eration of its earlier motion for judgment as a matter of
law, which the District Court had denied. The District
Court granted the motion, concluding that Muniauction
precluded a finding of direct infringement under §271(a)
because infringement of the ’703 patent required tagging
and Limelight does not control or direct its customers’
tagging. A panel of the Federal Circuit affirmed, explain-
ing that a defendant that does not itself undertake all of a
patent’s steps can be liable for direct infringement only
“when there is an agency relationship between the parties
who perform the method steps or when one party is con-
tractually obligated to the other to perform the steps.” 629
F. 3d, at 1320. Since neither of these conditions was met
in the present case, the Federal Circuit panel held that
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                    TECHNOLOGIES, INC.

                     Opinion of the Court 


Limelight could not be held liable for direct infringement.2
Ibid.
   The Federal Circuit granted en banc review and re-
versed. The en banc court found it unnecessary to revisit
its §271(a) direct infringement case law. Instead, it con-
cluded that the “evidence could support a judgment in
[respondents’] favor on a theory of induced infringement”
under §271(b). 692 F. 3d 1301, 1319 (2012) (per curiam).
This was true, the court explained, because §271(b) liabil-
ity arises when a defendant carries out some steps consti-
tuting a method patent and encourages others to carry out
the remaining steps—even if no one would be liable as a
direct infringer in such circumstances, because those who
performed the remaining steps did not act as agents of, or
under the direction or control of, the defendant. The
Court of Appeals did not dispute that “there can be no
indirect infringement without direct infringement,” id., at
1308, but it explained that “[r]equiring proof that there
has been direct infringement . . . is not the same as requir-
ing proof that a single party would be liable as a direct
infringer,” id., at 1308–1309 (emphasis deleted). Judge
Newman and Judge Linn both dissented (with the latter
joined by Judges Dyk, Prost, and O’Malley).
   Limelight sought certiorari, which we granted. 571
U. S. ___ (2014).
                             II

                             A

   Neither the Federal Circuit, see 692 F. 3d, at 1308, nor
respondents, see Tr. of Oral Arg. 44, dispute the proposi-
tion that liability for inducement must be predicated on
——————
  2 The panel noted that Limelight’s contracts instruct its customers to

tag the components they wish to be stored on Limelight’s CDN, but
concluded that, because these contracts did not give Limelight control
over its customers, the customers’ tagging could not be attributed to
Limelight. See 629 F. 3d, at 1321.
                    Cite as: 572 U. S. ____ (2014)                  5

                        Opinion of the Court

direct infringement. This is for good reason, as our case
law leaves no doubt that inducement liability may arise
“if, but only if, [there is] . . . direct infringement.” Aro Mfg.
Co. v. Convertible Top Replacement Co., 365 U. S 336, 341
(1961) (emphasis deleted).3
   One might think that this simple truth is enough to
dispose of this appeal. But the Federal Circuit reasoned
that a defendant can be liable for inducing infringement
under §271(b) even if no one has committed direct in-
fringement within the terms of §271(a) (or any other pro-
vision of the patent laws), because direct infringement can
exist independently of a violation of these statutory provi-
sions. See 692 F. 3d, at 1314.
   The Federal Circuit’s analysis fundamentally misunder-
stands what it means to infringe a method patent. A
method patent claims a number of steps; under this
Court’s case law, the patent is not infringed unless all the
steps are carried out. See, e.g., Aro, supra, at 344 (a “pat-
ent covers only the totality of the elements in the claim
and . . . no element, separately viewed, is within the
grant”). This principle follows ineluctably from what a
patent is: the conferral of rights in a particular claimed set
of elements. “Each element contained in a patent claim is
deemed material to defining the scope of the patented
invention,” Warner-Jenkinson Co. v. Hilton Davis Chemi-
cal Co., 520 U. S. 17, 29 (1997), and a patentee’s rights
extend only to the claimed combination of elements, and
no further.
   The Federal Circuit held in Muniauction that a meth-
od’s steps have not all been performed as claimed by the
patent unless they are all attributable to the same de-
——————
  3 Aro addressed contributory infringement under §271(c), rather than

inducement of infringement under §271(b), but we see no basis to
distinguish for these purposes between the two, which after all spring
from common stock. See Global-Tech Appliances, Inc. v. SEB S. A., 563
U. S. ___, ___ (2011) (slip op., at 8).
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                  TECHNOLOGIES, INC.

                   Opinion of the Court 


fendant, either because the defendant actually performed
those steps or because he directed or controlled others who
performed them. See 532 F. 3d, at 1329–1330. Assuming
without deciding that the Federal Circuit’s holding in
Muniauction is correct, there has simply been no in-
fringement of the method in which respondents have
staked out an interest, because the performance of all the
patent’s steps is not attributable to any one person. And,
as both the Federal Circuit and respondents admit, where
there has been no direct infringement, there can be no
inducement of infringement under §271(b).
   The Federal Circuit’s contrary view would deprive
§271(b) of ascertainable standards. If a defendant can be
held liable under §271(b) for inducing conduct that does
not constitute infringement, then how can a court assess
when a patent holder’s rights have been invaded? What if
a defendant pays another to perform just one step of a 12-
step process, and no one performs the other steps, but that
one step can be viewed as the most important step in the
process? In that case the defendant has not encouraged
infringement, but no principled reason prevents him from
being held liable for inducement under the Federal Cir-
cuit’s reasoning, which permits inducement liability when
fewer than all of a method’s steps have been performed
within the meaning of the patent. The decision below
would require the courts to develop two parallel bodies of
infringement law: one for liability for direct infringement,
and one for liability for inducement.
   Section 271(f)(1) reinforces our reading of §271(b). That
subsection imposes liability on a party who “supplies or
causes to be supplied in or from the United States all or a
substantial portion of the components of a patented inven-
tion . . . in such manner as to actively induce the combina-
tion of such components outside of the United States in a
manner that would infringe the patent if such combination
occurred within the United States” (emphasis added). As
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                       Opinion of the Court

this provision illustrates, when Congress wishes to impose
liability for inducing activity that does not itself constitute
direct infringement, it knows precisely how to do so. The
courts should not create liability for inducement of non-
infringing conduct where Congress has elected not to
extend that concept.
   The Federal Circuit seems to have adopted the view that
Limelight induced infringement on the theory that the
steps that Limelight and its customers perform would
infringe the ’703 patent if all the steps were performed by
the same person. But we have already rejected the notion
that conduct which would be infringing in altered circum-
stances can form the basis for contributory infringement,
and we see no reason to apply a different rule for induce-
ment. In Deepsouth Packing Co. v. Laitram Corp., 406
U. S. 518 (1972), a manufacturer produced components of
a patented machine and then exported those components
overseas to be assembled by its foreign customers.4 (The
assembly by the foreign customers did not violate U. S.
patent laws.) In both Deepsouth and this case, the conduct
that the defendant induced or contributed to would have
been infringing if committed in altered circumstances: in
Deepsouth if the machines had been assembled in the
United States, see id., at 526, and in this case if perfor-
mance of all of the claimed steps had been attributable to
the same person. In Deepsouth, we rejected the possibility
of contributory infringement because the machines had
not been assembled in the United States, and direct in-
fringement had consequently never occurred. See id., at
526–527. Similarly, in this case, performance of all the
claimed steps cannot be attributed to a single person, so
direct infringement never occurred. Limelight cannot be
liable for inducing infringement that never came to pass.
——————
 4 Section 271(f) now prohibits the exporter’s conduct at issue in

Deepsouth.
8          LIMELIGHT NETWORKS, INC. v. AKAMAI
                  TECHNOLOGIES, INC.

                   Opinion of the Court 


                              B
  Respondents’ arguments in support of the Federal Cir-
cuit’s reading of the statute are unpersuasive. First,
respondents note that tort law imposes liability on a de-
fendant who harms another through a third party, even if
that third party would not himself be liable, and respond-
ents contend that, given the background tort principles
against which the Patent Act of 1952 was enacted, it
should not matter that no one is liable for direct infringe-
ment in this case. But the reason Limelight could not
have induced infringement under §271(b) is not that no
third party is liable for direct infringement; the problem,
instead, is that no direct infringement was committed.
Muniauction (which, again, we assume to be correct)
instructs that a method patent is not directly infringed—
and the patentee’s interest is thus not violated—unless a
single actor can be held responsible for the performance of
all steps of the patent. Because Limelight did not under-
take all steps of the ’703 patent and cannot otherwise be
held responsible for all those steps, respondents’ rights
have not been violated. Unsurprisingly, respondents point
us to no tort case in which liability was imposed because a
defendant caused an innocent third party to undertake
action that did not violate the plaintiff ’s legal rights.
  In a related argument, respondents contend that, at
tort, liability sometimes attaches where two or more de-
fendants inflict injury, even if each defendant’s conduct,
standing alone, would not be actionable. See W. Keeton,
D. Dobbs, R. Keeton, & D. Owen, Prosser and Keeton on
Torts §52, p. 354 (5th ed. 1984) (multiple defendants who
each add negligible impurities to stream liable if aggre-
gate impurities cause harm). But the rationale for impos-
ing liability in these circumstances is that the defendants
collectively invaded the plaintiff ’s protected interests. See
ibid. By contrast, under the Muniauction rule, respond-
ents’ interests in the ’713 patent have not been invaded.
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                     Opinion of the Court

   Second, respondents seek to analogize §271(b) to the
federal aiding and abetting statute, 18 U. S. C. §2, and
they argue that two parties who divide all the necessary
elements of a crime between them are both guilty under
§2. The analogy does not hold up. The aiding and abet-
ting statute must be read “against its common-law back-
ground,” Standefer v. United States, 447 U. S. 10, 19
(1980), and at common law two or more defendants, each
of whom committed an element of a crime, were liable as
principals. See, e.g., 1 J. Bishop, Commentaries on the
Criminal Law §649, p. 392 (7th ed. 1882). While we have
drawn on criminal law concepts in the past in interpreting
§271(b), see Global-Tech Appliances, Inc. v. SEB S. A., 563
U. S. ___, ___ (2011) (slip op., at 10–12), we think it un-
likely that Congress had this particular doctrine in mind
when it enacted the Patent Act of 1952, given the doc-
trine’s inconsistency with the Act’s cornerstone principle
that patentees have a right only to the set of elements
claimed in their patents and nothing further.
   Third, respondents contend that patent law principles
established before the enactment of the Patent Act demon-
strate that a defendant that performs some steps of a
patent with the purpose of having its customers perform
the remaining steps is liable for inducing infringement.
But here, too, the nature of the rights created by the Pat-
ent Act defeats the notion that Congress could have
intended to permit inducement liability where there is no
underlying direct infringement. According to respondents,
their understanding of the pre-1952 doctrine casts doubt
on the Muniauction rule for direct infringement under
§271(a), on the ground that that rule has the indirect
effect of preventing inducement liability where Congress
would have wanted it. But the possibility that the Federal
Circuit erred by too narrowly circumscribing the scope of
§271(a) is no reason for this Court to err a second time by
misconstruing §271(b) to impose liability for inducing
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                   Opinion of the Court 


infringement where no infringement has occurred.
   Finally, respondents, like the Federal Circuit, criticize
our interpretation of §271(b) as permitting a would-be
infringer to evade liability by dividing performance of a
method patent’s steps with another whom the defendant
neither directs nor controls. We acknowledge this concern.
Any such anomaly, however, would result from the Fed-
eral Circuit’s interpretation of §271(a) in Muniauction. A
desire to avoid Muniauction’s natural consequences does
not justify fundamentally altering the rules of inducement
liability that the text and structure of the Patent Act
clearly require—an alteration that would result in its own
serious and problematic consequences, namely, creating
for §271(b) purposes some free-floating concept of “in-
fringement” both untethered to the statutory text and
difficult for the lower courts to apply consistently.
                             III
  Respondents ask us to review the merits of the Federal
Circuit’s Muniauction rule for direct infringement under
§271(a). We decline to do so today.
  In the first place, the question presented is clearly
focused on §271(b), not §271(a). We granted certiorari on
the following question: “Whether the Federal Circuit erred
in holding that a defendant may be held liable for inducing
patent infringement under 35 U. S. C. §271(b) even though
no one has committed direct infringement under §271(a).”
Pet. for Cert. i. The question presupposes that Limelight
has not committed direct infringement under §271(a).
And since the question on which we granted certiorari did
not involve §271(a), petitioner did not address that im-
portant issue in its opening brief. Our decision on the
§271(b) question necessitates a remand to the Federal
Circuit, and on remand, the Federal Circuit will have the
opportunity to revisit the §271(a) question if it so chooses.
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                     Opinion of the Court

                            IV
 The judgment below is reversed, and the case is re-
manded for further proceedings consistent with this opinion.

                                                  It is so ordered.