Supreme Court Reverses Federal Circuit on Two Key Patent Issues

by McNees Wallace & Nurick LLC

On June 2, 2014, the Supreme Court decided two closely-watched patent cases, unanimously reversing the U.S. Court of Appeals for the Federal Circuit and making it easier to defend some claims of patent infringement.


Limelight Networks v. Akamai Technologies dealt with the issue of induced infringement.  Inducement is a type of indirect infringement that allows a claim against a party who, although not itself infringing, actively encourages someone else to infringe a patent.  In the process patent at issue, which related to tagging online content, Limelight was accused of performing some, but not all, of the steps of the claimed invention.  The remaining steps were performed by its customers.


Under current law, direct infringement only occurs if one party performs every step of a patented process or, if not, the steps are performed by another under its direction or control.  The direction or control standard is a high one, generally requiring an agency or contractual relationship.  Here, because Limelight did not direct or control the actions of its customers, there was no direct infringement.


At issue was whether Limelight's encouragement of its customers to perform the remaining steps made it liable for inducing infringement.  The Federal Circuit said yes, arguing liability should not be avoided entirely by allowing someone else to perform those steps, even if that wasn't enough for a finding of direct infringement.


Reversing the Federal Circuit, the Supreme Court stated that inducement must be predicated on direct infringement.  Absent that underlying direct infringement, there can be no induced infringement either, even if that results in the party that omitted the last steps having permitted someone else to complete them instead.  Thus, at least for the foreseeable future, it should be easier to defend claims of infringement in process patents that require different independent parties to separately perform those steps, as the lack of direct infringement also precludes liability for inducement.


In the second case, Nautilus v. Biosig Instruments, the Court dealt with the issue of clarity in patent claim terms, finding the Federal Circuit's current standard was too amorphous in determining whether a patent is invalid as indefinite. 


One requirement of a patent is that its claims must be sufficiently definite, i.e., clear enough to permit others to understand what the patentee is trying to protect.  Here, Biosig owned a patent to exercise equipment having a grip bar permitting accurate heart-rate monitoring of the user while exercising by holding the bar with both hands.  The patent required, among other things, that two electrodes were "in spaced relationship with each other".  The Federal Circuit found this phrase was permissible under its standard for clarity, in which claim language is generally acceptable unless the phrase is indecipherable, a standard referred to as "insolubly ambiguous."


The Supreme Court noted the inherent limitations of language.  At the same time, the Court asserted a patent must be sufficiently precise to afford clear notice of what is claimed, in order to inform the public of what is still permitted.  It found, however, the Federal Circuit's standard was so broad as to encourage patentees to be vague rather than precise; malleability puts competitors at the disadvantage of not knowing what they can or can't do without risk of litigation.  The Supreme Court instead held the inquiry should focus on what the inventor intended to protect with its patent, starting with the concepts that 1) definiteness is to be evaluated from the perspective of someone skilled in the art at the time the application was filed and 2) in assessing definiteness, claims are to be read in light of the patent's specification and prosecution history, but without reading limitations from the specification into the claims. 


While the full effect won't be known for some time, Nautilus should make it easier to raise invalidity arguments when asserted patents fail to provide a clear delineation of their scope.



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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