Supreme Court considering whether it’s a good idea to open up a new feeding ground for patent trolls

by Steve Blum • , , , , ,

Looks like one of those divided infringements. Let’s eat it.

The U.S. Supreme Court finished its current session this week with a flurry of action, momentous and otherwise. Lost in the fireworks generated by rulings on gay rights, racial preferences and voting rules though, was its decision to take a look at an intellectual property case that, depending on where it eventually goes, could create a vast new opportunity for patent trolls and trial lawyers to line their pockets.

The case in question is Akamai Technologies Inc. v. Limelight Networks, Inc.. In it, a federal appeals court ruled that Akamai could sue Limelight, a competing content delivery network, for infringing its patents, even though Limelight didn’t completely duplicate Akamai’s protected methods. What Limelight did was use some, but not all, of the same technical steps as Akamai, which would otherwise be allowed, and then told its customers what they needed to do to complete the process. The appeals court said, in effect, it was the same as Limelight duplicating the entire method itself.

Suppose an inventor developed a system for doing something using steps A-B-C-D. Taken individually, each step is common knowledge and can be freely used by anyone. But the inventor was the first to string all four together in that order for a particular purpose. The process that uses those steps in that order, in that way can be patented. A competitor can come along and use, say, steps A-B-C-E if it wants, but can’t use A-B-C-D without permission.

In essence, Limelight used steps A-B-C and then told its customers that they had to do step D themselves if they wanted to achieve the same result as Akamai’s CDN process. Until the lower court ruling, that was legal.

A long list of major technology companies, including Google, Oracle, HTC, Cisco, Red Hat and SAP, as well as lobbyists for the mobile phone industry, urged the supreme court to review and, they hope, overturn that decision…

High technology companies…provide products and services that can be used in an almost infinite combination of ways by other companies and consumers. While the market’s evolution toward specialized, complementary provision of components by numerous, separate suppliers has resulted in substantial gains for consumers (e.g., smartphones that provide mobile telephony, Internet browsing, geographic services, and access to hundreds of thousands of applications at the tap of a finger), it makes technology companies particularly vulnerable to divided infringement claims.

A “divided infringement claim” would allow a patent troll to find one company doing steps A-B and another doing C-D, and sue the hell out of both of them.

The supreme court hasn’t completely decided to review the case. Instead, it bucked it over to the solicitor general, one of the top attorneys in the justice department, for his opinion. We’ll hear more about it during the supreme court’s next session, which starts in October.