Intellectual Property Law Knowledge Center

CAFC Steals the Limelight

May 14th, 2015

As the rest of the world was welcoming the United States and Japan to the Hague System for the International Registration of Industrial Designs, Judge Linn of the Federal Circuit “stole the limelight.” In yesterday’s decision in Akamai Technologies, Inc. v. Limelight Networks, Inc., Judge Linn (joined by Chief Judge Prost), over Judge Moore’s vigorous dissent, confirmed the existence of a new class of statutory subject matter – the entirely patentable, novel, non-obvious, useful, single-actor method claim, which is virtually worthless if it can be performed cooperatively by two or more parties who are not contractually bound to one another or who lack an agency relationship with one another. (Akamai Technologies, Inc. v. Limelight Networks, Inc., 2009-1372, 2009-1380, 2009-1416, 2009-1417, Fed. Cir. May 13, 2015.)

In finding that Limelight was not liable for infringement of Akamai’s patent because it did not itself perform all steps of the claimed method and did not exert sufficient control over its customers, Judge Linn opined that this issue can mostly be avoided by carefully crafting method claims which do not require multiple actors to complete the method steps. Unfortunately for most patentees, this is very unfortunate, and it’s simply wrong.

Consider this hypothetical: Company Alpha invents a new process for making Product Z. Product Z is not new. However, the new process uses less than half the energy as known processes, and thus provides substantial economic and environmental benefit. Alpha obtains a patent with the following novel and unobvious claim:

Claim 1. A method comprising:
providing X;
modifying X by doing something to it such that X’ results;
modifying X’ by doing something else to it such that X” results; and
combining X” with Y under certain conditions such that Z results.

Let’s also assume that X″ is a stable, isolatable product. Let’s further assume that the claimed steps are the absolute minimal necessary elements to provide patentability. Thus, while this hypothetical claim is clearly and carefully drafted to be performed by a single entity, the steps can be easily shared among two or more actors. In other words, the claim does not require multiple actors, but multiple actors could perform the method. Now, if Company Beta comes along and says to Company Delta, “Hey, we can sell you X″ for half of what anyone else charges,”  and Delta says, “great,” buys X″ from Beta, combines it with Y under certain conditions and starts selling Z on a competitive price level with Alpha … what recourse does Alpha have? According to Judge Linn and Chief Judge Prost – none. If neither Beta nor Delta controls the other, there is no direct infringement of the method.

This anomaly potentially may render thousands of method claims unenforceable in many circumstances. The en banc Federal Circuit, the Supreme Court, or even Congress must fix this. Otherwise, this rule will further encourage secrecy and frustrate the Constitutional directive and basis for patent protection of promoting the progress of the Useful Arts.

Nonetheless, unless and until one of these institutions corrects this problem, method claims will require extreme care and thought. While most patent practitioners already are well aware that drafting claims which require two or more actors to infringe is a non-starter, even claims which can be performed by a single actor, but which could be performed by multiple actors, must be carefully considered for any potential avenues to avoid this problem. Moreover, the conversation between inventor and patent attorney about the merits of trade secrets versus patents becomes even more essential.

Ultimately, this reinforces the notion that thoughtful, creative, high quality patent preparation and prosecution counsel is worth every penny.

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