Divided Infringement–No Longer a Hurdle

Prior to the Akamai/Centillion decisions, to enforce a patent against a certain party, you needed to prove that that party performed all of the steps of the process or made/used/sold, etc. all of the elements of the system.

From a monetization perspective, if you came across a patent that required two parties (where there is no contractual obligation between the parties) to practice all the elements of a given claim, then common practice would be to pass on the patent.

But with Akamai and Centillion, such patents now have monetization potential.  Without getting too granular, if you have a first party that performs only some of the steps of a process or make/use/sell, etc. only some of the elements of the claim, and a second party performs the remaining steps or provides the remaining elements, then that first party (preferably the one with the deeper pockets) may be potentially liable for induced infringement.

Granted, induced infringement has its own hurdles, two of the major hurdles being (1) only being entitled to  damages after filing the lawsuit, as opposed to being entitled to the typical six years of past damages; and (2) proving an intent to induce infringement prior to filing suit.

Re (2) above, depending on the jurisdiction, there are certain filing strategies to overcome the intent requirement (e.g., allege inducement at least as of the filing date of the patent, sending a letter and filing a week later).  Re (1) above, you should ensure a given patent with an induced-infringement monetization strategy has sufficient life after you file the lawsuit to accure damages.

Notwithstanding the above hurdles, these two cases increase the pool of monetizaable patents.  Remember to keep induced-infringement monetization strategy in your arsenal.

Below are quotes and links to each of the cases below.


“To be clear, we hold that all the steps of a claimed method must be performed in order to find induced infringement, but that it is not necessary to prove that all the steps were committed by a single entity.”

Akamai Tech v. Limelight Networks http://www.cafc.uscourts.gov/images/stories/opinions-orders/09-1372-1380-1416-141710-1291.pdf, pg. 10

“A party who knowingly induces others to engage in acts that collectively practice the steps of the patented method—and those others perform those acts—has had precisely the same impact on the patentee as a party who induces the same infringement by a single direct infringer; there is no reason, either in the text of the statute or in the policy underlying it, to treat the two inducers differently. In particular, there is no reason to hold that the second inducer is liable for infringement but the first is not.

“Likewise, a party who performs some of the steps itself and induces another to perform the remaining steps that constitute infringement has precisely the same impact on the patentee as a party who induces a single person to carry out all of the steps. It would be a bizarre result to hold someone liable for inducing another to perform all of the steps of a method claim but to hold harmless one who goes further by actually performing some of the steps himself. The party who actually participates in performing the infringing method is, if anything, more culpable than one who does not perform any steps.”

Akamai Tech v. Limelight Networks http://www.cafc.uscourts.gov/images/stories/opinions-orders/09-1372-1380-1416-141710-1291.pdf, pgs. 16-17

“We hold that the on-demand operation is a “use” of the system as a matter of law. The customer puts the system as a whole into service, i.e., controls the system and obtains benefit from it. The customer controls the system by creating a query and transmitting it to Qwest’s back-end. The customer controls the system on a one request/one response basis. This query causes the backend processing to act for its intended purpose to run a query and return a result. The user may then download the result and perform additional processing as required by the claim. If the user did not make the request, then the back-end processing would not be put into service. By causing the system as a whole to perform this processing and obtaining the benefit of the result, the customer has “used” the system under § 271(a). It makes no difference that the back-end processing is physically possessed by Qwest. The customer is a single “user” of the system and because there is a single user, there is no need for the vicarious liability analysis from BMC or Cross Medical.”

Centillion Data v. Quest Comm http://www.cafc.uscourts.gov/images/stories/opinions-orders/10-1110%20-1131.pdf, pg. 10


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