Where eagles dare

In addition to being a renowned statesman and one of the Founding Fathers of our country, Benjamin Franklin was also a scientist and inventor, being credited with inventing bifocals, the lightening rod, the flexible urinary catheter, and swim fins, among many other discoveries. Although he was not overfond of the Bald Eagle (he considered it a “Bird of bad moral Character”), one thing Franklin did not do was propose that the turkey be our national bird. He only felt the turkey to be a “much more respectable Bird, and . . . a Bird of Courage.”034

Method inducement requires all steps

On June 2, 2014, in Limelight Networks, Inc. v. Akamai Technologies, Inc., et al., No. 12-768 (2014), the U.S. Supreme Court held that liability for inducement of infringement of a patented method must be predicated on direct infringement. Akamai maintains a global network of content delivery servers that invisibly redirects users of their customer’s Web sites to content cached on Akamai’s servers. Limelight is a competitor whom Akamai sued for direct infringement of U.S. Patent No. 6,108,703 (‘703) for a “Global Hosting System” under 35 U.S.C. § 271(a) and for inducement of infringement under 35 U.S.C. § 271(b). The method claims in the ‘703 patent recite tagging content in a customer’s Web site and serving the tagged content from caching servers. Limelight, however, requires their customers to do their own tagging.

The jury found direct infringement and awarded Akamai $41.5M in damages. Upon motion for reconsideration, the district court granted Limelight’s previously-denied JMOL in light of the Federal Circuit’s holding in Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (C.A.F.C. 2008). In Muniauction, the Federal Circuit held that a defendant that does not perform all claimed steps is only liable for direct infringement when either an agency relationship or a contractual obligation exists with a third party who performs the claimed steps. A panel of the Federal Circuit initially affirmed the district court’s granting of the JMOL that Muniauction precluded a finding of direct infringement, but upon rehearing en banc, the Federal Circuit reversed and found that liability for induced infringement can arise when a defendant carries out some steps of a claimed method and “encourages” others to carry out the remaining steps.

A unanimous Supreme Court sharply rejected the en banc Federal Circuit’s holding, stating that “inducement liability may arise ‘if, but only if, [there is] . . . direct infringement.’” Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336, 341 (1961), accompanied by the terse observation that, “[o]ne might think that this simple truth is enough to dispose of this appeal.” They went on to blankly explain that, “[a] method patent claims a number of steps; . . . The patent is not infringed unless all of the steps are carried out. . . .There has simply been no infringement of the method in which respondents have staked out an interest, because the performance of all the patent’s steps is not attributable to any one person.” (emphasis added).

A wonderful blend of juicy fruits

055-150x300On June 12, 2014, in POM Wonderful LLC. v. Coca-Cola Co., the U.S. Supreme Court held that a company may bring suit under the Lanham Act for unfair competition arising from false or misleading product descriptions, even though the Federal Food, Drug, and Cosmetic Act (FDCA) gives the Food & Drug Administration exclusive enforcement authority over misbranding of food and drink. Pom Wonderful LLC (“POM”) is a California business that grows pomegranates and distributes pomegranate juices, including a pomegranate-blueberry juice blend. POM sued The Coca-Cola Company (“Coca-Cola”) for unfair competition based on Coca-Cola’s sales of a pomegranate-blueberry juice blend through their Minute Maid subsidiary. While POM’s pomegranate-blueberry juice blend contained 85% pomegranate juice and 15% blueberry juice, Coca-Cola’s juice blend contained just 0.3 percent pomegranate juice, 0.2 percent blueberry juice, 0.1 percent raspberry juice, and 99.4 percent apple juice and was less expensive to produce and sell. (The pomegranate-blueberry component “amounts to a teaspoon in a half gallon.”) The Court applied established statutory interpretation rules to the Lanham Act and FDCA to find the acts to be complimentary, not preclusive. Although both acts concern food and beverage labeling, the Lanham Act protects commercial interests against unfair competition, while the FDCA protects public health and safety. As a result, competitors are free to bring Lanham Act claims for food and beverage labels that are also subject to regulation under the FDCA.