Through innovation or a “flash of creative genius,” an inventor creates something new and useful that is not obvious from existing inventions. Imagine that this inventor—or her employer in many cases—decides to invest money and time in researching and developing the new invention. Eventually, after she determines that the invention will work, she invests even more money to file a patent application with the US Patent and Trademark Office (PTO). After a series of negotiations with a PTO patent examiner, which can take years, the examiner grants the inventor a patent on her invention. Just when she is primed to reap the fruits of her labor, a competitor swoops in, uses her invention, and begins profiting from it without permission. In response, the inventor turns to patent law, which she believes gives her the right to preclude others from using her invention. Yet, much to her dismay, she has no recourse against this competitor because the competitor is not acting alone. Under existing law, when multiple entities jointly make, use, or sell every element of a patented invention as a group—but no single entity does so alone—none of the entities has infringed the patent.
This loophole has been termed “joint patent infringement” or “divided patent infringement.” Joint infringers have been able to circumvent the federal patent statute because courts have held that a single entity must individually make, use, or sell each and every element of a patented invention to infringe a patent.
In Limelight Networks, Inc v Akamai Technologies, Inc, the US Supreme Court grappled with the issue of joint patent infringement. Akamai Technologies sued its competitor, Limelight Networks, for infringing its patent covering a method for delivering Web content. The patented method included (1) designating or “tagging” content—such as music or video files—and (2) storing that content on servers accessed by Internet users. Limelight performed some of Akamai’s patented method steps but relied on other parties to complete the remaining step. Specifically, Limelight stored the content providers’ content on a server but instructed its customers to designate the content themselves. By dividing the patented steps among multiple parties, Limelight shielded itself from patent infringement liability. This left the patent owner with no remedy under federal patent law, even though the joint conduct harmed the owner to the same degree as infringement by a single entity would have.
This result presents a conundrum. On the one hand, the law explicitly rules out holding joint infringers liable for patent infringement if no individual actor makes, uses, or sells every element of a patented invention. On the other hand, strong policy considerations recommend the opposite outcome—joint infringers should not be able to avoid liability simply by working as a group. In fact, even the Supreme Court has acknowledged that its interpretation of the patent statute “permit[s] a would-be infringer to evade liability by dividing performance of a method patent’s steps with another whom the defendant neither directs nor controls.” Although the Court characterized that result as an “anomaly,” it ultimately declined to resolve the issue. Yet there is a solution to the joint-infringement conundrum not yet considered by any court or commentator: joint patent misappropriation.