Lead Opinion
Opinion for the court filed by Circuit Judge LINN.
Dissenting opinion filed by Circuit Judge MOORE.
This appeal returns to us following remand from the United States Supreme Court. See Limelight Networks, Inc. v. Akamai Techs., Inc., — U.S. -,
I. Background
A detailed description of the history of proceedings, the technology and the claims at issue in this case is set forth in the prior reported opinions of this court and the Supreme Court and will not be repeated except to the extent germane hereto. See Limelight,
II. Divided .InfRingement Under § 271(a)
In the court’s view, and for the reasons set forth in more detail, infra, direct infringement liability of a method claim under 35 U.S.C. § 271(a) exists when all of the steps of the claim are performed by or attributed to a single entity — as would be the case, for example, in a principal-agent relationship, in a contractual arrangement, or in a joint enterprise.
Direct infringement under § 271(a) requires a party to perform or use each and every step or element of a claimed method. Warner-Jenkinson Co. v. Hilton Davis Chem. Co.,
Akamai asserts that the Supreme Court’s Limelight decision “strongly implies that a change in direction on § 271(a) is warranted.” Br. for Akamai at 3, Akamai, No. 2009-1372 (Fed.Cir. Aug. 18, 2014) (“Akamai’s Letter Br.”). It claims that in lieu of overruling Muniauction, this panel can decline to extend it to the facts of this case. Id. According to Akamai, an accused infringer “directs or controls” a third party if the accused infringer goes beyond loosely providing instructions and specifically tells a third party the step or steps to perform. Id. at 9. In its en banc briefing, Akamai cites joint tortfeasor principles as support. See, e.g., Principal Br. for Pls. Appellants at 21, Akamai,
We begin by considering whether § 271(a) incorporates- joint tortfeasor liability, as Akamai and the dissent advocate. Unquestionably, it does not. As codified by Congress, § 271(a) includes only the principles of vicarious liability, as embodied in the single entity rule. Presented with numerous conflicting theories of joint liability that existed in the common law prior to 1952, Congress enacted specific rules for inducement and contributory liability in § 271(b) and (c), respectively. While the dissent believes this leaves a “gaping hole,” Dissent at 915-16, it is not our position to legislate or contravene Congress’ choice — right or wrong — by importing other theories of joint liability into § 271(a).
The alternative — stretching § 271(a) to include joint tortfeasor liability — is flawed. To make joint tortfeasor liability consistent with the well-established fact that direct infringement liability under § 271(a) is strict liability, Akamai and the dissent must abandon several core tenets of joint tortfeasor law. This position also leads to untenable results. For example, the dissent advocates holding a customer jointly and severally liable for patent infringement based on its performance of a single step of a claimed method, even when it has no knowledge of the patent.
In the analysis that follows we address, in turn, three subjects: the statutory scheme of § 271, the divided infringement case law, and the errors in importing joint tortfeasor liability into § 271(a).'
A. The Statutory Scheme of § 271
Patent infringement is not a creation of common law. It is a tort defined by statute. See Crown Die & Tool Co. v. Nye Tool & Mach. Works,
35 U.S.C. § 271(a) provides that:
Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.
Section 271(a) defines infringement. H.R.Rep. No. 82-1923, at 9 (1952) (“Section 271, paragraph (a), is a declaration of what constitutes infringement.” (emphasis added)). Subsections ■ (b) and (c), in turn, codify the doctrines of inducement and contributory infringement respectively.
The Supreme Court has observed that “the 1952 Act did include significant substantive changes, and ... § 271 was one of them.” Dawson Chem. Co. v. Rohm & Haas Co.,
Indeed, in this way, Congress carefully crafted subsections (b) and (c) to
Furthermore, Akamai’s broad theory of attribution — in which a defendant would be liable for “causing and intending an act or result,” Akamai’s Letter Br. at 4 (citations omitted) — would render § 271(b) redundant. Subsection (b) states: “Whoever actively induces infringement of a patent shall be liable as an infringer.” The Supreme Court in Global-Tech, quoting Webster’s, explained that to induce “means to lead on; to influence; to prevail, on; to move by persuasion or influence.” Global-Tech Appliances, Inc. v. SEB S.A.,
But if, as Akamai contends, there is liability under § 271(a) for “one causing and intending an act or result,” there is no need for a separate tort for induced infringement. This is crystallized by the language of the Restatement (Second) of Torts § 877(a) — cited by Akamai — which subjects a defendant to liability for tor-tious сonduct of another if the defendant “orders or induces the conduct” (emphasis added).
For essentially the same reasons, Aka-mai’s broad reading of § 271(a) would make § 271(c) redundant as well. Subsection (c), as originally enacted, stated:
(c) Whoever sells a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.
As with § 271(b), liability for § 271(c) requires knowledge or willful blindness of the patent, Global-Tech,
While Akamai at various points uses slightly different phrasing for when one party’s actions should be attributed to another, all of its proposed tests suffer the same failing: they make § 271(b) and (c) redundant. Akamai’s proposed interpretation thus contravenes the rule that “we construe statutes, where possible, so as to avoid rendering superfluous any parts thereof.” Astoria Fed. Sav. & Loan Ass’n v. Solimino,
The dissent is faced with the same problem. To manufacture a single case in which its expansive interpretation of § 271(a) would not render § 271(b) and (c) superfluous, the dissent imposes a requirement that each joint patent infringer must perform at least one step of the method, see Dissent at 922. However, this single step requirement necessitates a new and •untested definition of the word “uses.” It also conflicts with the common law of torts — the authority cited by the dissent for its broad interpretation of § 271(a). The common law of torts would hold liable an entity that, with sufficient intent, aided another in committing a tort, even if that entity did not commit any element of the tort itself.
B. Divided Infringement Case Law
Under the language of § 271(a), this court’s “divided infringement” case
Applying traditional principles of vicarious liability to direct infringement under § 271(a) protects patentees from a situation where a party attempts to “avoid infringement ... simply by contracting out steps of a patented process to another entity.... It would be unfair indеed for the mastermind in such situations to escape liability.” BMC,
The dissent asserts that a handful of pre-1952 cases conflict with the single entity rule. But all of these cases do not involve method claims, see York & Md. Line R.R. Co. v. Winans,
The contributory infringement cases are, by their terms, not discussing direct infringement. The dissent acknowledges this, see Dissent at 925 (“some of the[sе] pre-1952 principles and cases ... are more akin to what we today consider to be indirect infringement than direct infringement under § 271(a)”), but suggests that the 1952 Act changed the contours of direct infringement, categorizing certain behaviors that formerly were described as contributory infringement as direct infringement. This is wrong. The enactment of § 271(a) “left intact the entire body of case law on direct infringement.” Warner-Jenkinson,
Turning to the scope of vicarious liability, the vicarious liability test includes, for example, principal-agent relationships, contractual arrangements, and joint enterprises. In a principal-agent relationship, the actions of the agent are attributed to the principal. Similarly, when a contract mandates the performance of all steps of a claimed method, each party to the contract is responsible for the method steps for which it bargained. However, this type of contractual arrangement will typically not be present in an arms-length seller-customer relationship.
Finally, in a joint enterprise, the acts of each participant are, by definition, imputed to every member.
All members of a joint venture may be jointly and severally liable to third persons for wrongful acts committed in furtherance of the joint enterprise or venture. Thus, the negligence of one participant in the enterprise or venture, while acting within the scope of agency created by the enterprise, may be imputed to another participant so as to render the latter liable for the injuries sustained by third persons as a result of the negligence.
48A C.J.S. Joint Ventures § 62 (footnotes omitted); see also Restatement (Second) of Torts § 491 (1965) (“Any one of several persons engaged in a joint enterprise, such as to make each member of the group responsible for physical harm to other per
(1) an agreement, express or implied, among the members of the group; (2) a common purpose to be carried out by the group; (3) a community of pecuniary interest in that purpose, among the members; and (4) an equal right, to a voice in the direction of the enterprise, which gives an equal right of control.
Restatement (Second) of Torts § 491, cmt' c.; see also 57B Am.Jur.2d Negligence § 1138 (2015).
C. Errors in Importing Joint Tortfea-sor Liability into § 271(a)
The majority and dissent agree that liability exists under traditional principles of vicarious liability, such as where a mastermind directs or controls another to perform all steps of a claimed method. But the dissent’s rule is far broader — Akamai and the dissent insist that they can thrust common law joint tortfeasor liability into § 271(a). The dissent would extend liability to “inelude[ ] parties who act in concert to collectively perform the claimed process pursuant to a common plan, design, or purpose.” Dissent at 923. The error of this approach is that it attempts to fit a square peg in a round hole: joint tortfea-sor law and § 271 are fundamentally incompatible. To import joint tortfeasor law into § 271(a), Akamai and the dissent depart frоm three indispensable common law limits on joint tortfeasor liability.
First, the Restatement is clear that joint tortfeasor liability “includes only situations in which the defendant has been personally guilty of tortious conduct.” Restatement (Second) of Torts § 875, cmt. a (1979). Yet personal guilt of direct infringement of a method claim under § 271(a) requires performance by the accused of all steps recited in the claim. The Restatement (Second) of Torts § 876, cmt. c (1979) explains that “[o]ne who innocently, rightfully and carefully does an act that has the effect of furthering the tortious conduct or cooperating in the tortious design of another is not for that reason subject to liability.” Thus, contrary to Akamai’s and the dissent’s positions, actors whose innocent actions coordinate to cause harm generally are not subject to liability at common law.
Second, the dissent purports to adopt the Restatement’s rule of action in concert. But, according to the Restatement, “[p]arties are acting in concert when they act in accordance with an agreement to cooperate in a particular line of conduct or to accomplish a particular result.” Restatement (Second) of Torts § 876, cmt. a. This definition stresses that there must be mutual agreement between the parties. Thus, the Restatement describes “acting in concert” as a form of “mutual agency.” Id. This is consistent with the early patent law treatises that limited joint infringement to parties “acting in complicity with others,” 3 William C. Robinson, The Law of Patents for Useful Inventions § 946 (1890), or parties “cooperatfing]” in infringement, Albert H. Walker, Textbook of the Patent Laws of the United States of America § 406 (4th ed.1904). There is no mutual agency or cooperation when parties act independently for their own benefit, such as in arms-length seller-customer relationships.
The dissent, meanwhile, would extend liability even to arms-length agreements, so long as one party “know[s] of th[e] [other] рarty’s actions.” Dissent at 928-29. This position contravenes both patent law and tort law. The Supreme Court in Globalr-Tech held that “a direct infringer’s knowledge or intent is irrelevant,” 131
Third, the Restatement describes yet another requirement for concerted action: knowledge of harm. The common law sources cited in Akamai’s briefs acknowledge that, for joint liability, a defendant needs knowledge of damage done or harm caused. See Akamai’s Letter Br. at 5 (quoting Prosser, § 47, which requires knowing that the conduct will “cause damage”); Br. for Resp’ts at 26, Akamai,
This is consistent with the description in Prosser & Keeton requiring “a common plan or design to commit a tortious act,” Prosser & Keeton on Torts § 46. To apply a “knowledge of the harm” principle to § 271(a), however, would require knowledge of the patent, knowledge of the steps recited in the claims, and knowledge of the risk of infringement presented by performance of those steps. Adopting such a requirement for liability under § 271(a) would be contrary to centuries of settled Supreme Court precedent that “a direct infringer’s knowledge or intent is irrelevant.” Global-Tech,
The dissent’s reasoning for eliminating these three common law limits, on joint tortfeasor liability is that “not all joint tortfeasor scenarios are permissible under the language of § 271(a).” Dissent at 929. But this simple response is wholly insufficient — it does not explain why patent law should allow for more expansive joint tort-feasor liability than other areas of law. The common law has carefully crafted
The dissent’s rule also leads to several extraordinary results. For example, a customer who performs a single step of a patented method by merely using a product as intended would be jointly and severally hable for direct infringement under § 271(a). See Dissent at 920 (“ ‘whoever ... uses’ a process for the purposes of infringement covers multiple parties who act in concert”). It is nothing short of remarkable that while Congress and state legislators express their concern about the vulnerability of innocent. customers to charges of patent infringement, Akamai and the dissent labor to create an unprecedented interpretation of existing law to make customers significantly mоre vulnerable to such charges. This is especially troubling given that the customer can be liable even without knowing of the patent. Moreover, the dissent’s “knowledge of the others’ actions” requirement is an illusory protection for customers and other unsuspecting parties. Institution of a patent infringement lawsuit informs accused in-fringers of third parties’ actions, so, at most, requiring knowledge of the others’ actions limits the patentee’s recovery to post-suit damages.
The drastic expansion of predatory customer suits is not a theoretical concern. Several amici, the White House, and other commentators identify numerous instances where patentees have sent demand letters to or sued dozens, hundreds, or, in some cases, even thousands of unsophisticated downstream users.
Finally, the dissent’s position leads to another perverse result: the addition of a claim limitation can actually serve to make more parties liable for infringement. Consider a hypothetical in which independent claim 1 recites a “repli-
III. The Facts of this Case
Akamai argues that the facts here are different from those in Muniauction, because Limelight provides more specific instructions and because it has a contract with its customers. Akamai’s Letter Br. at 8-9; see also Corrected Br. of PlsAppellants at 44, Akamai,
In this case, there is nothing to indicate that Limelight’s customers are performing any of the claimed method steps as agents for Limelight, or in any other way vicariously on behalf of Limelight. To the contrary, Limelight’s customers direct and control their own use of Limelight’s content delivery network (“CDN”). Limelight’s customers serve their own web pages, and decide what content, if any, they would like delivered by Limelight’s CDN. Customers sometimes even have Limelight’s CDN and competing CDNs simultaneously deliver the same content. As such, customers — not Limelight — direct and control which CDN delivers each and every object of their content. Limelight’s customers do not become Limelight’s agents simply because Limelight provides its customers a written manual explaining how to operate Limelight’s product.
Moreover, Limelight’s CDN is a service similar to Thomson’s on-line auction system in Muniauction, and Limelight’s relationship with its customers is similar to Thomson’s relationship with the bidders. In both cases, customers are provided instructions on use of the service and are required to perform some steps of the claimed method to take advantage of that service. In Muniauction, the customers performed the step of bidding. Here, the customers determine what website content should be delivered by Limelight’s CDN and then, allegedly, perform the step of “tagging” that content. Limelight’s customers also perform the step of “serving” their own web pages. As the district court found, there is “no material difference between Limelight’s interaction with its cus
Akamai also argues that the relationship between Limelight and its customers compels a finding of infringement because Limelight “contracts out to content providers the claim steps that it alone does not perform.” Akamai’s Op. Br. at 40. This assertion stems from Limelight’s standard form contract that, according to Akamai, “obligates content providers to perform the claim steps of tagging the embedded objects and serving the tagged page so that requests for the embedded objects resolve to Limelight’s network instead of the content provider’s.” Id. For this argument, Akamai relies on the statement in BMC that “[a] party cannot avoid infringement ... simply by contracting out steps of a patented process to another entity,”
Akamai’s reliance on this statement is misplaced. As discussed above, Limelight’s customers decide what content, if any, they choose to have delivered by Limelight’s CDN and only then perform the “tagging” and “serving” steps. The form contract does not obligate Limelight’s customers to perform any of the method steps. It merely explains that customers will have to perform the steps if they decide to take advantage of Limelight’s service. Because the customers were acting for their own benefit, Limelight is not vicariously liable for the customers’ actions. See BMC,
In the present case, the asserted claims were drafted so as to require the activities of both Limelight and its customers for a finding of infringement. Thus, Akamai put itself in a position of having to show that the allegedly infringing activities of Limelight’s customers were attributable to Limelight. Akamai did not meet this burden because it did not show that Limelight’s customers were acting as agents of or otherwise contractually obligated to Limelight or that they were acting in a joint enterprise when performing the tagging and serving steps. Accordingly, we affirm the district court’s grant of Limelight’s motion for JMOL of non-infringement under § 271(a).
IV. Conclusion
For the foregoing reasons, this court affirms the district court’s grant of Limelight’s motion for JMOL of non-infringement of the '703 patent.
Limelight argues as an alternative ground for affirmance that Akamai presented no substantial evidence that Limelight or its customers actually performed the tagging limitation as properly construed. Because we find that the district court properly granted JMOL of nonin-fringement on the ground stated, we need not and do not address this argument. Likewise, we do not reach Limelight’s conditional cross-appeal of the damages award alleging that Akamai failed to present economic proof of a causal link between Limelight’s infringement аnd any Akamai lost sales.
We also confirm our previously reinstated affirmance of the district court’s judgment of noninfringement of the '413 and '645 patents.
AFFIRMED
Notes
. Because this case does not implicate joint enterprise liability, this case is not the appropriate vehicle to adopt joint enterprise liability-
. Akamai and the dissent argue that the word "whoever” in § 271(a) ("whoever ... uses ... any patented invention”) undermines the single entity rule because it is plural. See 1 U.S.C. § 1 ("In determining the meaning of any Act of Congress, unless the context indicates otherwise — words importing the singular include and apply to several persons, parties, or things.... ” (emphasis added)). The court agrees that "whoever” is plural, but Akamai and the dissent’s argument fails for two reasons. First, the statute simply states the obvious: more than one entity can be independently liable for direct patent infringement if each entity practices every element of the claim. Second, the statutory context, with § 271(b) and (c) extending liability in limited circumstances to actors who do not independently infringe, establishes that § 271(a) excludes joint liability.
The dissent’s interpretation of "whoever” as “any person or persons” is also too sweeping for its purposes. The plain meaning of § 271(a), as the dissent would have it, contains no requirement that the parties "act in concert pursuant to a common plan or design,” Dissent at 925, and the dissent introduces it with no statutory basis. The dissent’s analogy to joint inventors, see id. at 920, 922-23, 923, only underscores this problem. That joint inventors must have some connection derives from the word “jointly” found in § 116 — see, e.g., Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc.,
. Jackson related to a claim for infringement of claims 1, 4, and 5 of U.S. Patent No. 263,412 (the "'412 patent”), claims 1 and 2 of U.S. Patent No. 269,863 (the "863 patent”), and claims 2 and 3 of U.S. Patent No. 302,338 (the ‘"338 patent”).
. Though Wallace does not explicitly use the term, it is a recognized example of cоntributory infringement. See Dawson, 448 U.S. at
. Br. of Amicus Curiae Elec. Frontier Found, in Supp. of Def. at 6-8, Akamai,
. See, e.g., Br. of Amici Curiae Newegg and L.L. Bean in Supp. of Pet’r at 18-22, Limelight,
. EFF Br. at 5; Br. of Amicus Curiae The Financial Services Roundtable in Supp. of Limelight Networks, Inc. and Affirmance at 27, Akamai,
Dissenting Opinion
dissenting.
Today the majority holds that the actions of multiple parties can only result in direct infringement of a method claim in
Without the innovative technology protected by the patent-in-suit, the Internet as we know it would. not exist. In the mid-1990s, the Internet was exploding. Ever increasing numbers of users were sharing increasingly bandwidth-heavy information, oftеn at great distances. From text to photos to music and videos, users were placing exponentially greater pressure on the infrastructure of the Internet. Congestion and interruptions in service were standard.
Mirroring, where an entire website is replicated on multiple servers in multiple locations, was a known solution to some of these problems. However, mirroring came with problems of its own. Mirroring was not scalable, and content providers had less control over mirrored data stored on servers in distant locations. Because of the overhead required to synchronize mirrored websites at multiple locations, mirroring was inefficient for websites with dynamic information.
Dr. Tom Leighton, a professor of theoretical- mathematics at MIT, and Danny Lewin, his research assistant, solved these problems. They developed a scalable network of mirrored, geographically distributed servers for delivering content (content delivery network or CDN). To direct requests for this content, they developed a domain name system that could intelligently select a suitable CDN server from which the user could obtain the requested content. And they developed a method by which content providers could “tag” content to be delivered by the CDN, rather than their own servers. Using their invention, a content provider like ESPN could serve the text of its website (with news articles updated in real time) from its own servers and tag static, bandwidth-heavy content (such as photos and videos accompanying a news article) to be served by the CDN, reducing the burden on ESPN’s server. Dr. Leighton and Mr. Lewin’s invention promised efficient, scalable delivery of tagged content while maintaining a content provider’s flexibility and control over other content.
To protect their innovation, Dr. Leigh-ton and Mr. Lewin patented their invention. They then founded Akamai, the exclusive licenseе of the patent-in-suit, U.S. Patent No. 6,108,703. Akamai was an immediate success, and its dramatically improved method of delivering content was compared to “great historical shifts — discoveries of better, faster ways- — like the invention of Arabic numerals, or the development of seafaring.” Paul Spinrad, The
In response to Akamai’s success, competitors began copying Akamai’s methods of distributing content. Limelight, founded a few years after Akamai, is one such competitor. A jury found that Limelight, in collaboration with its content provider customers, practices every step of the methods disclosed in four claims of the '708 patent. For example, of the four steps of claim 34 of the '703 patent, Limelight performs every step save one: the “tagging” step. This step is performed by Limelight’s customers, who tag the content to be hosted and delivered by Limelight’s CDN. Limelight instructs its customers how to tag, and employees are on call if its customers require additional assistance. Moreover, Limelight requires all of its customers to sign a standard contract. The contract delineates the steps that must be performed by these customers if they -use the Limelight service — steps that include tagging content. When Limelight’s content delivery customer chooses to use Limelight’s CDN to deliver web content to Internet users, it must tag content. It has no choice: if it wishes to use the product, it must tag content. Limelight itself then performs all of the other steps of Akamai’s patent claims. Thus, every time Limelight’s service is used, all the claim steps of Akamai’s patent are performed as part of the Limelight CDN service.
When Dr. Leighton and Mr. Lewin patented their invention, they expected our legal system to protect their intellectual property. For all of history, a company that did what Limelight had done would be liable for patent infringement. Limelight performed all but one step of a patented method, and Limelight directed its customers to perform that final step. Both Limelight and its customers obtained the economic benefits of performing all of the steps of the claimed patent — namely, faster, more efficient delivery of tagged content coupled with control and flexibility over untagged content. To say Limelight has not committed the tort of patent infringement is inconsistent with the common law, the plain language of the Patent Act, and centuries of patent law that preceded BMC and Muniauction.
I. The Creation of the Single Entity Rule and the Direction or Control Test
The majority’s ruling today rests on its application of one rule — the single entity rule — and its interpretation of another— the direction or control test. Before explaining why the majority’s view of these rules are inconsistent with the statute, it is helpful to briefly explain the manner by which they came into being.
BMC treated the single entity rule as if it were a first principle, proclaiming that “[ijnfringement requires, as it always has, a showing that a defendant has practiced each and every element of the claimed invention.” BMC Res., Inc. v. Paymentech, L.P.,
With scant analysis, the single entity rule was born. To the extent there was any confusion about the use of the term “a defendant” in BMC, the court’s Muniauction decision made clear that “direct infringement requires a single party to perform every step of a claimed method.” Muniauction, Inc. v. Thomson Corp.,
Neither of these cases supports the claim that the single entity rule is some longstanding, well-accepted principle. A host of amici and commentators agree that BMC arid Muniauction’s pronouncement of the single entity rule changed the law, vitiated broad сlasses of patents, and created a gaping loophole in infringement liability. Brief of Amicus Curiae Boston Patent Law Association at 1, Akamai,
That many patentees crafted their patent claims in a manner that is incapable of being infringed belies the proposition that there was a long-standing single entity requirement for direct infringement. I do not agree with the majority that this patent, and the thousands of other patents across many different industries, drafted in a manner which contemplated joint infringement liability, are “poorly-drafted.” Maj. at 909. Instead, we have changed the rules on these folks. Clarity is not a virtue we can claim in this particular scenario.
II. Joint Infringement Liability Under § 271(a)
Section 271 defines the requirements for infringement. This case is first, last, and entirely about statutory construction. Section 271(a) provides that: “whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.” 35 U.S.C. § 271(a). All agree that infringement of a process claim requires each claimed step to be performed — that is how the process is “use[dj.” Nothing about joint infringe
“Whoеver,” as used in § 271(a), encompasses multiple entities. Dictionaries define “whoever” in the plural as “[w]hatever person or persons.” Principal Brief for Plaintiff-Appellant Akamai on Rehearing En Banc at 15, Akamai,
The word “whoever” appears in other sections of the Patent Act, and in each ease the word “whoever” expressly includes the collective actions of multiple persons. Identical terms are presumed to have the same meaning within a statute, even if the terms appear in different sections. Sullivan v. Stroop,
The majority gives little consideration to the text of the statute, relegating its discussion of “whoever” to a footnote. It does not consider principles of statutory construction or attempt to reconcile its construction with the other uses of “whoever” in the same statute. The majority posits that the fact that whoever is plural means only that more than one entity can be liable for patent infringement. This construction assigns no weight to the plural form because the same would be true if the singular were used. For example, if the statute read “one who uses” a patented invention, all would agree that two people performing each step of the patented process would each be liable for infringement. No one would claim that once the first
The plain language and contextual analysis compel the conclusion that “whoever” within the context of § 271(a) includes joint infringers — multiple entities acting in concert pursuant to a common plan or purpose (joint tortfeasors). Moreover, the presumption against ineffectiveness supports construing “whoever” to include joint infringement. If “language is susceptible of two constructions, one of which will carry out and the other defeat its manifest object, the statute should receive the former construction.” Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 63 (2012) (quoting Citizens Bank of Bryan v. First State Bank,
For example, consider the following scenario. Party A intentionally induces party B to perform each and every step of a method claim. Unquestionably, party B is a direct infringer under § 271(a) and party A is an inducer under § 271(b). Switching the facts only slightly, assume that party A performs the first step in the claimed method and then, with the same knowledge and intent, induces party B to perform the remaining steps. Under the majority’s rule, neither party is liable, even though the harm to the patentee remains the same. Party A is not even liable as an inducer because, under the single entity rule, no direct infringement has occurred. Limelight,
The majority claims that this gaping hole in liability, which the majority never defends, and which all agree makes no sense, was “Congress’ deliberate choice.” According to the majority, “Congress carefully crafted subsections (b) and (c)” and intentionally “removed joint-actor patent infringement liability.” Maj. at 905-06. The majority recognizes that “[a]t the
The majority never explains why Congress would intentionally do away with joint infringement liability and create what is universally recognized as a gaping hole in liability. No party or amici defends as logical the rule which the majority says Congress intentionally adopted: that when one induces another to perform the steps of a patented method both parties are liable; however, when one performs some of the steps and induces another to perform the remaining steps, nobody is liable. The harm to the patentee is identical in either case — the entire method has been performed — and the joint tortfeasors have received the economic benefit of that patented method.
The majority’s primary criticism of interpreting “whoever” in § 271(a) to include joint infringers is that doing so would render §§ 271(b) and (c) superfluous. This is simply wrong. Sections 271(b) and (c) would still apply in situations where § 271(a) would not. AIPLA Amicus Brief at 17-20. Consider the same scenario discussed previously — where one- party induces another to perform all steps of a claimed method. That party has undisput-edly infringed under § 271(b). It is not, however, liable for direct infringement under § 271(a) because it has not performed any step of the claimed method. Section 271(a), by its own terms, does not apply to an entity that does not perform any step of a patented method, because that party would not be one of the person or persons who jointly “uses” the method within the meaning of the statute.
The plain language of § 271(a) and the accompanying sections of the Patent Act make clear that “whoever ... uses” a process includes joint infringers just as “whoever invents” includes joint inventоrs. And despite the majority’s pronouncement, this standard is not limited to parties acting as part of a principal-agent relationship, a contractual arrangement, or a joint enterprise. The statutory language, the common law, and our case law are not so limiting. Joint infringement encompasses an infringer who performs some claim steps and directs or controls another to perform the remainder of the claimed process and it includes parties who act in concert to collectively perform the claimed process pursuant to a common plan, design, or purpose. Liability for such multi-actor joint infringement was present and widely recognized in the common law prior to the 1952 Patent Act, and continues to be present in § 271(a).
The majority suggests that its construction is correct despite the fact that it renders the use of “whoever” in the Patent Act internally inconsistent and without considering, or even admitting, that it creates a gaping hole in liability that had not previously existed in the common law. Instead, the majority claims that this was purposeful and intentional by Congress because, in 1952, Congress sought to do away with all commonly recognized forms of joint infringement except that codified in §§ 271(b) and (c). Section 271(a)’s use of “whoever” expressly includes joint infringement as §§ 101,161, and 171’s use of “whoever” includes joint invention. The plain language of the statute indicates that Congress chose to divide joint tortfeasor acts giving rise to liability among the three sections (a), (b), and (c). This construction gives meaning to all the words in the statute, interprets the word “whoever” consistently, and reflects Congress’ codification of the state of liability for infringement prior to the creation of the 1952 Patent Act.
III. The Common Law Supports § 271(a) Joint Infringement Liability
The Supreme Court observed in Aro Manufacturing Co. v. Convertible Top Replacement Co.,
Several of the pre-1952 eases cited by the parties recognize joint infringement liability. In York & Maryland Line Railroad Co. v. Winans, the Supreme Court held that a company that owned the rails on which a different company operated infringing cars for both companies’ profits was liable for infringement because it was “a principal, cooperating with another corporation, in the infliction of a wrong, and is directly responsible for the resulting damage.”
Two other pre-1952 cases from the Seventh Circuit confirm the understanding that the concerted actions of two different parties can result in direct infringement of a method claim. In Peerless Equipment Co. v. W.H. Miner, Inc., the defendant manufacturer performed all but the last step of the claimed method, which was performed by the defendant’s customer.
Certainly, some of the pre-1952 principles and cases cited above are more akin to what we today consider to be indirect infringement rather than direct infringement under § 271(a). But they all gave rise to liability and the 1952 Patent Act codified all of them. In §§ 271(b) and (c), it codified certain grounds for induced and contributory infringement. And in § 271(a), by using the plural term “whoever,” it codified the common law rule that two parties who act in concert pursuant to a common plan or design to perform a claimed method are liable for joint infringement.
Interpreting § 271(a) to allow for infringement by the concerted action of multiple parties is consistent with general common law principles of tort liability. The common law imposed joint liability when two or more parties acted in concert — alternatively referred to as concerted action or acting with another in pursuit of a common plan, design, or purpose— even without an agency relationship or contractual obligation. “One is subject to liability if he ... does a tortious act in concert with [an]other pursuant to a common design with him.” Restatement (Second) of Torts § 876(a); see also 1 Edwin
And while the post>-1952 precedent is not-a model of clarity on the circumstances in which concerted action or joint infringement creates liability under § 271(a), courts frequently recognized liability under § 271(a) in joint tortfeasor scenarios, not limited to vicarious liability. See, e.g., On Demand Mach. Corp. v. Ingram Indus., Inc.,
IV. Applying the Statutory Interpretation to this Case
Limelight is liable under § 271(a) for its actions and the actions of its customers in infringing the '703 patent. First, Limelight is liable under the direction or control test, because Limelight has performed a number of steps of the patented methods, and it has directed its customers to perform the remaining steps. Limelight is not an innocent party who performed a single step. It is the mastermind of the infringement in this case. It performed all but one of the claim steps and it instructed, in fact it required, its customers to perform the other claim step before they could use Limelight’s content delivery system. Such a person, personally responsible for the performance of every claim step, has always been deemed an infringer under the law. In these circumstances, Limelight “uses” the patented method. Every time Limelight’s customers act, pursuant to its instruction to use its content delivery system, infringement is occurring. All of Akamai’s invention is used, all the claimed method steps are performed, and all the economic benefit of Akamai’s innovation is stolen. And Limelight is the one who profits from this infringement. Limelight is using Akamai’s patented invention and is responsible for the performance of every patented step.
Limelight could also be held liable as a joint infringer, acting in concert with the customers pursuant to a common purpose, design, or plan. Limelight and its content provider customers share a common purpose, design, or plаn: to provide website information to Internet users. Limelight knowingly works together with its customers to achieve that result, jointly performing all the steps of the patented method and receiving exactly the economic benefit secured by the patent. Limelight’s service improves content delivery to Internet users, offering its customers faster, more efficient delivery of tagged content coupled with control and flexibility over untagged
Limelight requires all of its customers who wish to use its service to sign a standard contract delineating the actions that customers must perform to use the Limelight service — actions that include steps of ■ the patented method. The fact that Limelight did not tell its customers what website content to tag is irrelevant to infringement of the claims at issue, which do not discriminate among tagged content. It is true that the contract does not compel the customer to use Limelight’s service. But if the customer does choose to use Limelight’s service to deliver content, it must perform some of the claimed method steps, and thus acts in concert with Limelight. The fact that a customer may choose not to act in concert with Limelight does not insulate Limelight from liability when that customer actually chooses to do so.
The Constitution and 35 U.S.C. § 154 grant patentees the right to exclude others from using the patented invention in the United States. Akamai was undoubtedly harmed — its entire patented process was used by others for commercial gain all in the United States. This harm is identical whether Limelight performed all the steps or collaborated with its customers to divide them up. Limelight benefitted from the infringing use by selling its services, which provided exactly the faster, more efficient content delivery system invented by Aka-mai. Limelight knowingly performed each step except the tagging step, and it knew that its customers would perform that tagging step. Its content delivery system would not work unless the customer performed the tagging step.' In fact, the contract it had with its customers required them to perform that tagging step if they used the Limelight service. Every step of the patented method was performed and Limelight and its content provider customer achieved exactly the economic benefit conferred by the patent without having to pay a royalty for its use. Under common law joint tortfeasor principles, Limelight’s conduct traditionally gave rise to liability. Under common law patent principles, this conduct traditionally gave rise to liability. For centuries, up until our recent decisions, Limelight would have been liable for patent infringement. And the majority makes no argument that Limelight should not be held liable.
V. Responding to the Majority
The majority’s creation of a narrow patent-specific universe of joint infringement liability construes the Patent Act in ways that are both internally inconsistent and inconsistent with general tort principles.
The majority cites a number of treatises for the proposition that mere knowledge of another’s tortious activity is not enough to give rise to liability. I agree. Joint tort-feasor liability requires concerted action pursuant to a common plan, purpose, or design. Joint tortfeasors are both acting to create a single indivisible harm. I agree with the majority that just knowing that someone else is acting (when you yourself do nothing) does not subject you to liability.
And importantly, I am not importing a knowledge requirement into § 271(a) that would be incompatible with the strict liability nature of the tort of infringement. There is no knowledge of the patent requirement under § 271(a) and neither my standard nor the majority’s imports one. Both standards, however, do require knowledge to attribute the acts of one party to another. The majority’s joint enterprise standard requires knowledge, in fact, an agreement between the parties and right of mutual control. Likewise, the joint tortfeasor standard requires knowledge. Neither requires knowledge of the patent or knowledge of the harm that will be caused. Rather, both adopt the common sense principle that a party cannot be held liable for the actions of another without knowing of that party’s actions and some form of agreement or direction or control. Here there is no dispute that Limelight itself acted (performed all but one of the method steps) and knew precisely the actions its customers would take and, in fact, it instructed them as to how to take those actions. This undoubtedly comports with any knowledge requirement under joint tortfeasor law that would attribute to Limelight those acts taken by its customers.
The majority criticizes the dissent for not incorporating into § 271(a) all joint tortfeasor scenarios. The answer is clear: not all joint tortfeasor scenarios are permissible under the language of § 271(a), and of course, the statute’s language controls. For example, it is true that at common law the action of encouraging another to commit a tort (traditional notions of inducement) makes you a joint tortfeasor. And because such inducement is directly and undisputedly covered by § 271(b), this common law joint tortfeasor does not escape liability under § 271. However, that particular joint tortfeasor scenario does not likewise create liability under § 271(a) because the language of § 271(a) precludes it. Section 271(a) in relevant part says “whoever ... uses ... any patented invention.” To be liable as a joint tortfeasor under § 271(a), all the elements or steps of the claim must be performed, and each accused joint tortfeasor must perform at least one of the steps pursuant to some common purpose, design or plan. If you perform none of the steps, you. aie not jointly using the patented invention, and thus are not a joint tortfeasor covered by § 271(a).
Akamai, the patentee, is harmed identically whether Limelight performed all of the method steps or whether Limelight performed three and had its customer perform the fourth. Under the majority’s reading of the statute, the patentee has no redress for the harm if two people act together to perform the patented method but does have redress if that identical method is performed by a single entity. It is difficult for me to conceive of how that guarantees the patentee’s right of exclusivity or compensates the patentee when that right of exclusivity is clearly violated. The majority claims that the dissent would extend liability to independent arms-length actors who just happen to collectively perform the claimed steps. Not so. Concert
I have not “blithely tossed [common law principles of joint tortfeasor] aside.” Maj. at 912-13. The majority has created a straw man and in folly beat it down. But joint tortfeasor concerted action, according to a common plan, purpose, or design, is not that straw man. My interpretation of the Patent Act embraces the common law tort principles. There was liability for ■ what Limelight did here prior to the 1952 Patent Act, and the Patent Act continues to give rise to liability for such infringement in § 271(a). I do not agree with the majority that Congress intentionally sought to do away with such liability, and the plain language of the statute does not comport with such claims.
The majority’s complaints about predatory customer suits are a smokescreen. Maj. at 913. The only accused infringer in this case is Limelight. We do not, and need not, decide whether Limelight’s customers should be liable, as none of those customers have been sued by Akamai.
The majority’s concern that joint tortfeasor liability will cause a “drastic expansion of predatory customer suits” is unwarranted. Maj. at 913. The majority’s dramatic rhetoric is meant to appeal to the frenzy over “trolls.” Concerns about customer suits stem from the fact that patentees might choose to sue less sophisticated customers who lack the resources or incentive to defend against the patent suit, while the manufacturers, who generally have a greater interest and ability to defend against the suit, cannot participate in the lawsuit. See, e.g., Microsoft Corp. v. DataTern, Inc.,
These concerns do not exist in the joint tortfeasor context because if a customer were ever sued, the manufacturer can be joined voluntarily (or even involuntarily). Where it is the combined actions of the customer and manufacturer pursuant to a common plan that give rise to liability, if the customer is sued, the manufacturer can join and defend against the suit.
Finally, to do either what the majority proposes or what I propose requires en banc action, as it is admittedly at odds with binding precedent. Despite mentioning the joint enterprise standard twelve times in the opinion and concluding that the collaborative actions of Limelight and its customers do not give rise to joint enterprise liability,
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Congress codified existing common law joint tortfeasor principles in §§ 271(a), (b), and (c). Section 271(a) covers direct infringement, which occurs when all the steps of the method are performed either by a single entity or multiple entities acting in concert or collaboration, jointly, or under direction or control. This does not extend to arms-length actors who unwittingly perform a single step — there must be concerted action to achieve a common goal. The plain language of § 271(a), and in particular Congress’ decision to make liable “whoever ... uses ... any patented invention,” expressly includes joint tortfea-sor concerted action. To conclude otherwise renders the statute’s use of the word “whoever” internally inconsistent. There is no question that §§ 101, 161, and 171, which state “whoever invents,” includes the concerted action of multiple inventors each playing a part in the conception of the patented invention. Likewise “whoever uses” includes the concerted action of
. Even amici who suggest that § 271(a) does not include joint infringement admit that such a result was likely never intended by Congress. See, e.g., Brief of Amicus Curiae United States at 14, Limelight,
. It is an unassailable truism that an entity who does not perform any method steps is not using the method, not individually and not jointly. The majority also claims that this unremarkable definition of “use” would be at odds with common law tort principles because it would exclude inducers who encourage another's use without themselves performing steps. But isn't this exactly what Congress did cover in § 271(b)? I am not sure how Congress' choice to divide joint tort-feasor acts giving rise to liability among the three sections (a), (b), and (c) is "untenable.” Maj. at 905.
. Joint infringement is not a "relatively new problem.” US Amicus Brief at 31; see also id. at 14 ("[T]he current provisions of Section 271 do not deal adequately with the relatively new phenomenon in which multiple pаrties collectively practice the steps of a patented method.”). From the earliest patent treatises throughout the legislative history of the 1952 Patent Act and continuing to the thousands of current patents whose claims are drafted to cover joint infringement, the practice of multiple parties acting in concert to perform the steps of a patented method has been known and cognizable. See Walker, supra; Robinson, supra (both acknowledging that if "several persons cooperate in any infringement” they are all liable); Contributory Infringement: Hearings on H.R. 3866 Before Subcomm. No. 4 of the House Comm, on the Judiciary, 81st Cong. 3 (1949) (statement of G. Rich) ("[W]hen two people combine and infringe a patent in some way or other, they are joint tort feasors, and it so happens that patents are often infringed by people acting in concert, either specifically or by implication.”); Contributory Infringement in Patents: Hearings Before Subcomm. on Patents, Trademarks, and Copyrights of the H. Comm. on the Judiciary, 80th Cong. 5 (1948) (statement of G. Rich on behalf of the New York Patent Law Association) (arguing in favor of adoption of the 1952 Patent Act in order to establish liability where a patented method is performed by two or more persons acting in concert: "a new method of radio communication may involve a change in the transmitter and a corresponding change in the receiver. To describe such an invention in patent claims, it is necessary either to specify a new method which involves both transmitting and receiving, or a new combination of an element in the receiv-er and an element in the transmitter ... The recent decisions of the Supreme Court appear to make it impossible to enforce such patents in the usual case where a radio transmitter and a radio receiver are owned and operated by different persons.”). Joint infringement is not a new problem nor is it one that escaped Congress' attention in 1952.
. The majority discounts Jackson and other pre-1952 cases on the basis that they did not deal with method claims. The language of the patent statute draws no distinctions between method and machine claims to indicate that Congress intended joint tortfeasor concepts to be incorporated into infringement liability when machine claims are at issue, but not when method claims are at issue. These cases indicate that concerted action amounted to joint infringement and was actionable at the time.
. Interestingly, the majority’s joint enterprise standard is more akin to joint tortfeasor than agency. It is discussed as a form of "vicarious liability." However, like other forms of ■joint tortfeasor liability and unlike agency or contract obligation, it creates joint and several liability among the participants of the joint enterprise.
. While not deciding whether Limelight's customers could be liable, the Supreme Court . has stated that "[t]he right to use is a comprehensive term and embraces within its meaning the right to put into- service any given invention.” Bauer,
. And if a customer were found liable (such as Limelight's content provider customers), that customer would onlyhe jointly and severally liable for the single act of infringement that it performed in concert with Limelight. Only the manufacturer, Limelight, is liable for the harm caused by all of the uses of its software.
. It is troubling that the majority articulates a new standard for liability, joint enterprise, which is in conflict with our prior precedent and then decides this factual question on appeal, with no opportunity for briefing, argument, or record development by the parties. "Whether [the joint enterprise] elements exist is frequently a question of fact for the jury.” Restatement (Second) of Torts § 491, cmt. c.