In Nautilus, Supreme Court Relaxes Standard for Finding Patents Invalid for Indefiniteness

by Goodwin
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On June 2, 2014, the U.S. Supreme Court decided Nautilus, Inc. v. Biosig Instruments, Inc., holding that patent claims must inform a person of skill in the art of the scope of the invention with reasonable certainty. The decision rejects the Federal Circuit’s “insolubly ambiguous” test for indefiniteness and may make it easier for defendants to invalidate patents.

The Context

Biosig Instruments has a patent on a heart-rate monitor for use during exercise. The purpose of the invention is to better detect electrical signals from the heart (ECG signals) by distinguishing them from electrical signals generated by other muscles (EMG signals). Among the requirements of the claims are “live” and “common” electrodes “in spaced relationship with each other.”

After licensing negotiations failed, Biosig first sued Nautilus for infringement in 2004. In response, Nautilus twice sought reexamination of the patent by the U.S. Patent Office. The initial suit was dismissed during the reexamination process; after the Patent Office confirmed the validity of the patent, the suit was re-filed in 2010.

The district court granted summary judgment of invalidity to Nautilus, finding that the term “spaced relationship” was indefinite. Biosig appealed to the U.S. Court of Appeals for the Federal Circuit, which reversed the finding of indefiniteness. The panel majority held that the claim language, patent specification and prosecution history provided “inherent parameters” that allowed a person of skill in the art to understand the boundaries of the “spaced relationship” between the electrodes. A concurring opinion also found the term definite based upon a more limited analysis.

The Supreme Court accepted review of the Federal Circuit’s decision.

What the Supreme Court Said

  • Patent claims must inform a person of skill in the art about the scope of the invention “with reasonable certainty” to satisfy the definiteness requirement of 35 U.S.C. § 112.
  • Patent claims are viewed in light of the specification and prosecution history when determining whether they meet the definiteness requirement.

What the Supreme Court Did Not Say

  • The Court expressed no opinion on whether factual determinations underlying the ultimate determination of definiteness trigger the “clear and convincing” evidence standard.
  • The Court acknowledged, but expressed no opinion on, the Federal Circuit’s de novo review of definiteness determinations as a legal issue.
  • The Court expressed no opinion on whether any deference is due to the U.S. Patent Office’s resolution of any disputed issue of fact.

What You Need to Consider

The Supreme Court’s decision in Nautilus may make it easier for defendants to show that a patent is invalid for indefiniteness by rejecting the Federal Circuit’s statements that claims are only indefinite when they are “insolubly ambiguous” or not “amenable to construction.” The practical impact of how much easier it may be to invalidate claims for indefiniteness, however, will require further elaboration in lower courts.

Although the Supreme Court rejected the specific language of “insolubly ambiguous” or “not amenable to construction,” the Court recognized that other statements by the Federal Circuit about the standard for indefiniteness came closer to the standard announced by the Supreme Court. Thus, to the extent the Federal Circuit may have already been applying a lower standard for indefiniteness than suggested by the literal language of “insolubly ambiguous,” the Nautilus decision may result in a change in the language used in the case law without a change in the number of patents being found indefinite. On the other hand, district courts that may have been dissuaded by the “insolubly ambiguous” language may be more willing to find patents indefinite under the more relaxed standard articulated by the Supreme Court.

Defendants considering challenging a patent as indefinite should strongly consider the use of expert testimony. Not only does the standard announced by the Supreme Court explicitly refer to the understanding of those skilled in the art, but the opinion also noted that patents are not addressed to the public or lawyers, but to “those skilled in the relevant art.” It repeated the Court’s prior observation in Markman that claim construction “may turn on evaluations of expert testimony.” Patent owners may seek to avoid claims of indefiniteness by arguing that terms would be understood by those of skill in the art, and defendants must be ready to counter such arguments. Defining the “relevant art,” an issue which previously came up mostly in the context of obviousness arguments, also may now be important to the definiteness issue.

The impact Nautilus may also be affected by the Supreme Court’s ruling in Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc. next year. In that case, the Supreme Court will address the level of review the Federal Circuit should apply to factual determinations made by a district court in support of a claim construction ruling. If the Supreme Court rules that more deference should be given to those factual determinations, that same deference would logically apply to factual determinations underlying a finding of indefiniteness.

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this informational piece (including any attachments) is not intended or written to be used, and may not be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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