Limelight Networks, Inc. v. Akamai Technologies, Inc.
The Court ruled that a company cannot be held liable for encouraging patent infringement if no one actually committed direct infringement in the first place.
Because a lower-court rule required all steps of a patented method to be legally attributable to one party, and the customers' actions here could not be pinned on the company, there was no underlying infringement for the company to have induced.
“Limelight cannot be liable for inducing infringement that never came to pass.”
The Court's core reasoning that inducement liability cannot exist without underlying direct infringement.
How it got here: A jury found infringement, but the trial court reversed itself based on a later Federal Circuit ruling; an en banc Federal Circuit then revived the claim on an inducement theory, and Limelight asked the Supreme Court to review that decision.
The Case in Depth
What happened
Akamai Technologies holds an exclusive license to a patent for delivering website content more quickly using a network of servers, a process that includes a step called "tagging." Limelight Networks runs a similar service but has its customers do the tagging themselves rather than doing it in-house. Akamai sued Limelight for patent infringement after a jury awarded over $40 million in damages.
The question before the Court
If a company and its customers together carry out all the steps of a patented process, but no single one of them performs every step, can the company still be sued for encouraging patent infringement?
Why it matters
Businesses that split tasks with their customers or partners — for example, requiring customers to complete one small step of a larger service — may avoid liability for patent infringement even if the combined result matches a patented process. This affects internet, technology, and service companies whose products depend on customer participation to complete a patented method.
What changes now
The case returns to the Federal Circuit, which may now reconsider whether its own rule for direct infringement — that all steps of a method patent must be attributable to a single actor — was correctly decided in the first place. Until or unless that rule changes, companies structuring multi-party processes similarly to Limelight's may continue to avoid both direct and induced infringement liability.
What this does not decide
The Court explicitly did not decide whether the Federal Circuit's underlying rule for direct infringement — that all steps of a method patent must be attributable to one party — is itself correct. That question remains open for the Federal Circuit to address on remand.
How the Court got there
The legal reasoning, step by step
- The Court started from the settled principle that a party can only be liable for inducing patent infringement if someone actually committed direct infringement of the patent — inducement liability cannot exist in a vacuum.
- Under the Federal Circuit's own rule for direct infringement (from a prior case called Muniauction, which the Court assumed without deciding was correct), a method patent is only directly infringed when every one of its steps can legally be attributed to a single actor, either because that actor performed the steps itself or controlled the party who did.
- Applying that rule here, the customers' tagging could not be attributed to Limelight because Limelight did not direct or control how customers performed that step, so no direct infringement of the patent had occurred at all.
- Because there was no direct infringement to begin with, the Court held there could be no inducement of infringement either — encouraging conduct that itself is not infringing cannot create liability under the inducement provision.
- The Court noted that a related provision, which explicitly allows liability for encouraging conduct that would only be infringing under different circumstances, shows Congress knows how to create that kind of liability when it wants to — and it did not do so for ordinary inducement claims.
- The Court declined to reconsider whether the Federal Circuit's underlying attribution rule for direct infringement was correct, since the question it had agreed to decide assumed that rule was valid and left that issue for the Federal Circuit to revisit on remand.
Doctrinal impact
Cases affected by this decision
Reaffirms Aro Mfg. Co. v. Convertible Top Replacement Co. (365 U. S. 336)
Relied on for the rule that inducement liability requires an actual underlying direct infringement.
Reaffirms Deepsouth Packing Co. v. Laitram Corp. (406 U. S. 518)
Used to reject the idea that conduct only infringing under different circumstances can support liability.
Distinguishes Muniauction, Inc. v. Thomson Corp. (532 F. 3d 1318)
Assumed correct without deciding, and left open for the Federal Circuit to reconsider on remand.