1. This concerns an electronics method claim where the alleged infringer Limelight performed many of the steps of a method claim, but its customers performed the step of ‘tagging’. Thus no one party performed all the steps of the method claim, and therefore there was no direct infringement.
2. The en banc Federal Circuit found Limelight to be liable for ‘inducing’ infringement, and that this could happen even where no single party had infringed directly.
3. The Supreme Court disagreed with the Federal Circuit and held that direct infringement must occur by ‘one person’ in order for inducing of infringement to be possible.
4. Without commenting on whether it was correct the Supreme Court referred to the Federal Circuit decision Muniauction which held that a method cannot be said to have been performed for infringement purpose unless each step is performed by the same party.
5. The Supreme Court could not agree with the Federal Circuit in the present case because it would not lead to ‘ascertainable standards’ for infringement, and two bodies of infringement law would need to be developed for the different types of infringement.
6. The Supreme Court also felt that when Congress wishes to define inducing infringement more broadly it can do so, for example in Section 271(f)(1) which gives a detailed definition of inducing infringement. Thus the Courts should not create a liability of inducing infringement where Congress has not elected to do.
7. The Supreme Court also referred to Deepsouth Packing v Laitram where it was held that contributory infringement could not occur where direct infringement had not occurred in the US.
8. The Supreme Court recognised that its view meant that infringement could be escaped by dividing the steps of a method between different parties. However this is not enough to justify the Federal Circuit’s decision which creates its own ‘serious and problematic consequences’ of an infringement test which is ‘untethered’ to the statutory text and difficult to apply consistently.
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