Federal Circuit, En Banc, Loosens Rules For Proving Infringement by Multiple Parties: Overturning Prior Panel Precedent, Court Holds That Inducement Liability for Method Patent Claims May Be Predicated on Conduct by Multiple Parties Who Collectively Perform the Method Steps, Without a Showing of “Direction or Control” by One Party

Sullivan & Cromwell LLP - September 4, 2012

In the combined appeal in Akamai Techs., Inc. v. Limelight Networks, Inc. and McKesson Techs., Inc. v. Epic Sys. Corp. (Fed. Cir. August 31, 2012), a 6-5 en banc majority of the United States Court of Appeals for the Federal Circuit held that proving infringement by inducement of a method patent no longer would require proof that a single entity directly infringed that patent.  The court held that a defendant may be liable for inducing infringement where the defendant has induced other parties to perform the steps of the claimed method, even if no single party has performed all of those steps.  In reaching that conclusion, the court overruled a prior panel decision, in BMC Resources Inc. v. Paymentech, L.P., 498 F.3d 1373, 1379 (Fed. Cir. 2007), which held that liability for inducing infringement required, as a predicate, a finding of direct infringement by a single entity.