Broad Standard of Infringement for Method Claims Upheld in Lilly v. Teva

By: David Forman

Patented methods often include steps that can be performed by more than one party.  Until recently, if more than one party performed at least one of the method steps (divided infringement), it precluded establishing infringement, since the well-established rule has been that for direct infringement under 35 U.S.C. § 271(a), all steps of the patented method had to be performed by the same party.  This rule also blocked inducement of infringement under 35 U.S.C. § 271(b), since if a party induced others to perform the patented method, but some steps of that method were performed by more than one entity, then there could be no inducement of infringement because direct infringement by those performing the method steps could not be established.

The law is developing to accommodate divided infringement of method patents.  In Akamai Techs., Inc. v. Limelight Networks, Inc., 797 F.3d 1020 (Fed. Cir. 2015) (“Akamai”), the Federal Circuit (with guidance from the Supreme Court[1]) held, under the facts of that case, that there was direct infringement “when an alleged infringer [1] conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and [2] establishes the manner or timing of that performance.”  Id. at 1023.  In Akamai the patented method of delivering content on the internet included steps performed by customers of the allegedly infringing service provider (Limelight).  The Federal Circuit focused on evidence that (1) the alleged infringer conditioned the customer’s participation and receipt of a benefit on the customer performing steps of the patented method (i.e. if Limelight’s customers wanted to use Limelight’s product, they were required to perform the method steps) and (2) established the manner and timing of the customer’s performance (i.e., customers could avail themselves of the service only when they performed the method steps).  Thus, even though customers performed some steps of the method, under the facts of the Akamai case, direct infringement under 35 U.S.C. § 271(a) could nevertheless be attributed to the service provider.  Id. at 1023-25.

How would this apply to entirely different technologies?  The next divided infringement case to reach the Federal Circuit was Eli Lilly and Company v. Teva Parenteral Medicines et al., No. 15-2067 (Fed. Cir. Jan. 12, 2017) (“Lilly”), in which the patent was a method for treating cancer with Eli Lilly’s powerful drug, Alimta® (pemetrexed).  Eli Lilly scientists had discovered that there could be serious toxic side effects unless vitamin B12 was taken by the patient for several days before Alimta was administered.  The other method steps were performed by physicians, but the patients took vitamin B12 on their own for a specified number of days.  Thus, physicians would infringe the patented method only if taking vitamin B12 by patients could be attributed to the physicians.  Defendants such as Teva, who wanted to sell pemetrexed with the same instructions for use as Alimta, would induce infringement by physicians only if all steps of the method of treatment, including taking vitamin B12, could be attributed to the physicians.

After trial the district court found that physicians (1) conditioned the patients’ actions and receipt of the benefit (i.e., treatment with Alimta with reduced toxicity) on performing a step of the patented method (taking the vitamin B12), and (2) established the manner and timing of when patients performed the step of taking the vitamin.  Therefore, the district court found, and Lilly argued at the Federal Circuit, that the two factors from Akamai established that taking the vitamin by the patients was under the direction and control of physicians.  The defendants agreed that these two factors were required, but argued that these required factors were not satisfied.

The biotechnology industry was concerned that divided infringement scenarios could arise in biotechnology that should be infringement, but that would not exactly fit the two specific factors from Akamai.  Therefore, Osha Liang worked with the Biotechnology Innovation Organization to submit an amicus brief urging that the Court should not rule that the two-prong test of Akamai is the sole hallmark of divided infringement.[2]

Deciding in favor of Lilly, the Federal Circuit held that “[t]he two-prong test that we set forth in Akamai V is applicable to the facts of this case and resolves the existence of underlying direct infringement.”  Lilly, Fed Cir. No. 15-2067, slip op. at 15 (Fed. Cir. Jan. 12, 2017).  Because physicians using Teva’s pemetrexed would infringe, Teva was found to have induced that infringement.  However, the Court clearly left the door open for other kinds of divided infringement:  “In addition to this two-prong test, we observed [in Akamai] that, ‘[i]n the future, other factual scenarios may arise which warrant attributing others’ performance of method steps to a single actor. Going forward, principles of attribution are to be considered in the context of the particular facts presented.’”  Id. at 9.  “We leave to another day what other scenarios also satisfy the ‘direction or control’ requirement.”  Id. at 15.  Therefore, biotechnology companies will have plenty of latitude in future cases to argue that other scenarios in which more than one party performs steps of a patented method constitute direct or induced infringement.

[1] Limelight Networks, Inc. v. Akamai Techs., Inc., 134 S. Ct. 2111 (2014)

[2] Read the brief here: Eli Lilli v Teva_BIO Amicus Brief (English only)