District Court Grants Motion to Reconsider Summary Judgment Motion after Supreme Court's Decision in Limelight v. Akamai

August 20, 2014

In this patent infringement action, FedEx moved for reconsideration after the district court had denied its motion for summary judgment regarding the plaintiff's claim for inducing patent infringement. FedEx moved for reconsideration based on the Supreme Court's recent decision in Limelight Networks, Inc. v. Akamai Technologies, Inc., 134 S. Ct. 2111 (2014).

The district court first analyzed whether the motion to reconsider was procedurally proper. "Under Local Rule 7-18, a motion for reconsideration may be made on the following grounds only:

(a) a material difference in fact or law from that presented to the Court before such decision that in the exercise of reasonable diligence could not have been known to the party moving for reconsideration at the time of such decision, or (b) the emergence of new material facts or a change of law occurring after the time of such decision, or (c) a manifest showing of a failure to consider material facts presented to the Court before such decision. No motion for reconsideration shall in any manner repeat any oral or written argument made in support of or in opposition to the original motion."

The district court then concluded that reconsideration was appropriate. "As a threshold matter, this court finds that FedEx's motion satisfies Local Rule 7¬18(b). Therefore, the court will review the prior ruling in light of Limelight."

After determining that reconsideration was appropriate, the district court review the underlying record. "The underlying record on summary judgment is surprisingly short. FedEx's June 15, 2012 motion for summary judgment asked for a finding of inducement in one short paragraph:

Where there is no direct infringement, there can be no liability for indirect infringement
whether by inducement to infringe or by contributory infringement. See Dynacore Holdings Corp. v. U.S. Philips Corp. 363 F.3d 1263, 1272 (Fed.Cir. 2004). Accordingly, it follows from the above reasoning that FedEx cannot be liable for any form of indirect infringement of claim 18 of the '547 patent, claim 19 of the '551 patent, and claim 34 of the '120 patent. [SF 119-121, 159-160, 195-196]"

The opposition was brief as well with the plaintiff stating:

"FedEx argues that it cannot be held liable for indirect infringement on the sole basis that "there is no direct infringement" by anyone. (Motion at 15:12-17 (citing Dynacore Holdings Corp. v. U.S. Philips Corp., 363 F.3d 1263, 1272 (Fed. Cir. 2004); SF ¶¶ 119-121, 159-160, 195-196.) But the evidence shows a triable issue of fact that FedEx itself directly infringes the claims, as set forth above. FedEx fails to meet its burden to present the Court with undisputed evidence supporting summary judgment. Celotex, 477 U.S. at 323."

After the parties filed their briefs, the Federal Circuit issued the Akamai decision and based on that decision, the district court found:

"FedEx also seeks summary judgment of indirect infringement. FedEx says that where there is no direct infringement by a single party, there can be no indirect infringement. This was the law when the parties briefed this motion. However, the Federal Circuit decided Akamai Technologies, Inc. v. Limelight Networks, Inc., 692 F.3d 1301 (Fed. Cir. 2012) (en banc) soon after the parties finished briefing this motion. Akamai overruled earlier cases that "held that in order for a party to be liable for induced infringement, some other single entity must be liable for direct infringement." Id. at 1306. Since the law has changed, this Court DENIES FedEx's summary judgment as it relates to the issue of inducement."

The district court next analyzed the merits of FedEx's position in light of the Supreme Court's decision and found that summary judgment should be granted. In so doing, the district court rejected a new theory raised by the plaintiff. "Katz now says that its inducement theory is that 'FedEx induced its customers (callers) and corporate subsidiaries to directly infringe.' (Katz Opp'n. to Mot. to Reconsider at 1.) A review of the underlying summary judgment briefs reveals that Katz did not raise this argument previously. Rather, Katz advanced two other arguments: 1) that FedEx directly infringed itself (Katz's Opp'n. to Summ. J.); and 2) that Katz relied only upon the conduct of
FedEx, AT&T, and XO in combination (Katz's Statement of Genuine Issues). Since Katz, in the underlying brief, did not raise the possibility that FedEx induced customers, this Court will not consider the customer infringement theory now."

The district court also found that the new theory was not viable even if it was not new. "The first argument with respect to FedEx's own direct infringement does not support a finding of inducement. Rather, it relates only to charges of direct infringement, which remain in this case. The second argument concerns multiple parties and is no longer viable after Limelight Networks, Inc. v. Akamai Technologies, Inc., 134 S. Ct. 2111 (2014). In Limelight, the Supreme Court held that a defendant cannot be liable for inducing infringement under § 271(b) when there is no predicate act of direct infringement. Id. at 2115. Here, there is no such accusation in the underlying record."

Accordingly, the district court granted the motion for summary judgment in light of the Limelight decision.

In re: Katz Interactive Call Processing Patent Litigation, Case No. MDL 2:07-ML-1816-B-RGK (C.D. Cal. Aug. 6, 2014)

The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.