Friday, June 12, 2015

Jurisdictional Variation as to Whether Direct Infringement by a Single Actor is Required for Inducing Infringement

Warner-Lambert Company, LLC v Actavis Group Ptc & Ors [2015] EWCA Civ 556 (28 May 2015) aff’g [2015] EWHC 72 (Pat) (interlocutory injunction) rev’g [2015] EWHC 249 (Pat) (indirect infringement)
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Limelight Networks Inc v Akamai Technologies Inc, (USSC, 2014) rev’g 692 F.3d 1301 (Fed Cir 2012)(en banc)

In Akamai v Limelight the US Federal Circuit held that a party may be liable for inducing infringement of a method claim even if there was no direct infringement by any single actor, so long as all of the steps that constitute the infringement method were practiced. Consequently, an inducer would be liable if it practiced some of the steps and induced another to practice the rest. The USSC reversed, holding that inducement liability can only arise if there is direct infringement, and, on the authority of the Fed Cir Muniauction 532 F. 3d 1318 (2008) decision, direct infringement of a method claim requires that all the steps are performed by a single actor. Consequently, the USSC held that inducement liability only arises if all the steps of a method claim are performed by a single actor.

In contrast, in Warner-Lambert v Actavis the EWCA undertook a thorough review of the European case law, and noted that the courts of two EPC members states (Holland and Germany [106]) have concluded that indirect infringement can arise even “the absence of a downstream event which, as a whole, can be regarded as putting the invention into effect” [135]-[136]. That is, indirect infringement does not necessarily require direct infringement. The EWCA did not give its own opinion on this matter, as the issue on appeal was only whether a claim for indirect infringement should be struck. But the EWCA did point to this view of the Dutch and German courts as reason for allowing the claim for indirect infringement to go to trial [136], [140].

Both US and European case law have to be treated with case. Both the US and European statutes define infringement (s 60 of the UK Act, s 271 of the US Act), while the Canadian Act has no explicit definition. The split between the US and European approaches is nonetheless instructive because the relevant European provisions derive ultimately (though loosely) from the US statute (see Grimme [2010] EWCA Civ 1110 ¶ 92), so the split is not just due to fundamentally different statutory provisions.

I have no opinion as to how this difficult question is best resolved, but the European developments do indicate that it would be wrong for Canadian courts to simply follow the recent USSC decision in Limelight v Akamai. That is particularly so because the US debate over the proper approach to inducing infringement is closely tied up with the Muniauction test for direct infringement. The USSC relied on Muniauction "[a]ssuming without deciding" that it is correct, and implied that any difficulties its holding might cause were attributable to Muniauction's strict approach to direct infringement. This might have been taken as an invitation to the Fed Cir to revisit that decision, but that invitation was declined in Akamai v. Limelight (Fed. Cir. 2015), on remand, which essentially reaffirmed Muniauction. Moreover, as explained here, it appears that in reversing the Fed Cir, the USSC didn’t fully understand the Fed Cir’s reasoning. It will be interesting to see how the issue of inducing infringement is treated in the UK now that Warner-Lambert v Actavis will proceed to trial on this issue.

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