Move over, Congress: The Supreme Court may be this year’s game-changer on patent reform

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In a normal year, the U.S. Supreme Court does not normally grant certiorari to patent law cases. In a good year, the Supreme Court may grant certiorari to a single case impacting patent law. In 2014, the nation’s highest court will hear at least five cases that will impact so-called patent troll litigation. Because such decisions tend to have an immediate, and often profound, effect on patent litigation, there is every reason to believe that these five cases may very well impact patent troll litigation far more than any proposed patent reform legislation currently pending in Congress.

So what are the issues in these cases and how could they impact patent troll litigation?

Nautilus, Inc. v. Biosig Instruments, Inc., No. 13-369

Issue

This case deals with the concept of patent indefiniteness. Patent claims are required to be written so that they particularly point out and distinctly claim the subject matter of the invention. Because these claims inform the public of the bounds of the protected invention, the patent law requires that the defined scope of the claims be sufficiently definite to inform the public. Patent law thus finds patent claims to be indefinite only when they are “not amenable to construction” or “ insolubly ambiguous.”

In this case, Nautilus successfully argued that Biosig’s patent claims were invalid because of indefiniteness because Biosig’s patent claims required there to be a “spaced relationship” between two parts but did not specify how much space was sufficient. The District Court agreed with Nautilus but the Federal Circuit reversed.

How would it impact patent troll litigation?

Many of the patent claims asserted by patent trolls include ambiguous or difficult-to-define patent claim terms. This is often a desirable characteristic of patent troll patents — it allows the troll to assert the patent as broadly as necessary to cover the allegedly infringing products at issue. Further guidance from the Supreme Court on what constitutes indefinite claim language could increase the description necessary to obtain a patent and provide additional ammunition for attacking vague patent troll patents.

Limelight Networks, Inc. v. Akamai Technologies, Inc., et al., No. 12-788

Issue

This case involves induced patent infringement and whether there must be a direct infringer before there can be inducement.

Under patent law, you can infringe a patent directly or indirectly. To directly infringe, you must perform each and every limitation in a patent claim. To indirectly infringe, you must either sell a product that can only be used to infringe a patent (contributory infringement) or you encourage others to infringe a patent (induced infringement). Additionally, until last year, you could not infringe a patent indirectly unless some single entity, somewhere, was performing all the required limitations of the claim.

But with this case, the Federal Circuit determined that the existence of a single direct infringer was unnecessary to prove induced infringement under certain circumstances. The Federal Circuit held that where the alleged inducing infringer (i) knew of the plaintiff’s patent, (ii) performed all but one of the steps of the method, (iii) encouraged its customers to perform the final step of the claimed method, and (iv) the customers performed the step, there was induced infringement (even though no single entity anywhere was performing each of the required steps).

How would it impact patent troll litigation?

Patent troll litigation often involves claims of infringement of software method patents. These patents include a series of steps performed by different processors or servers. Given the interconnectivity of the Internet and Internet users, it can be difficult to prove that any one entity is performing all of the required steps of a software method patent. Under this case, however, there is no longer a need to show that a single entity is performing all the steps. This greatly eases the burden of showing infringement of software method patents. If this case were to be reversed, however, it would make it much more difficult for patent trolls with software method patents to prove infringement.

Alice Corp. Pty. Ltd. v. CLS Bank International, et al., No. 13-298

Issue

In this case, the Supreme Court is asked to determine whether patent claims to computer-implemented inventions (including claims to systems and machines, processes, and items of manufacture) are directed to patent-eligible subject matter. In other words, the Supreme Court is being asked to set the boundaries for when a computer software patent is eligible for patent protection and when it is simply an unpatentable algorithm.

How would it impact patent troll litigation?

Computer software patents are the lifeblood of patent troll litigation. These patents use somewhat nebulous terms to encompass generic functionality in a way that can often be interpreted to cover widely disparate technologies. If the Supreme Court were to set a higher bar for obtaining a software patent, it would open up many existing software patents to invalidity challenges.

Octane Fitness, LLC v. Icon Health & Fitness, Inc., No. 12-1184 and Highmark Inc. v. Allcare Health Management Systems, Inc., No. 12-1163

Issue

The key issue with both of these cases is the award of attorneys’ fees in patent cases. The patent law allows courts to award attorneys’ fees to the prevailing party in “exceptional cases.” In practice, the Federal Circuit has generated a body of case law that sets an often exactingly high burden for accused infringers to meet in order to be awarded attorneys’ fees. The result is that patent holders can often make outrageous claims of infringement with dubious support for their positions and force defendants to hire counsel at great cost in order to fight such claims without genuine fear that the court will ever award the accused infringer attorneys’ fees.

How would it impact patent troll litigation?

If the Supreme Court were to lower the bar for awarding attorneys’ fees in patent cases, one would expect to see a sharp decrease in dubious patent law suits. Under such a revised standard, patent plaintiffs would face serious and expensive consequences for pursuing dubious patent infringement claims. Such a result would serve to temper the aggressiveness of some patent plaintiffs, provide a disincentive to bring spurious patent infringement claims, and conserve judicial and legal resources for those parties with serious claims of infringement.

 

Topics:  Nautilus Inc. v. Biosig Instruments, Patent Litigation, Patent Reform, Patent Trolls, Patents, SCOTUS

Published In: Civil Procedure Updates, Intellectual Property Updates, Science, Computers & Technology Updates

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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