Patent Law Continues to Unite an Otherwise Divided Supreme Court
For all the Beltway rumblings about how divided the Supreme Court has become, one area of law appears to unite both ends of the Court's political spectrum--patent law. Earlier this year, the High Court issued a pair of unanimous decisions on fee awards in patent cases (Octane Fitness v. Icon Health and Highmark v. Allcare Health Management). And, just this week, the Court issued another pair of unanimous decisions in the area of patent law.
In the first of these decisions, Limelight Networks, Inc. v. Akamai Technologies, Inc., the Supreme Court unanimously ruled that there can be no "induced" infringement of a method patent if no single person is liable for "direct" infringement. In other words, at least one person must practice all steps of a method patent for anyone else to face liability for "inducing" infringement. Limelight practiced all steps of a method patent save one. Its customers practiced the final step on their own, albeit with instructions from Limelight. The Supreme Court held that "inducement liability may arise if, but only if, there is . . . direct infringement." And, "there has simply been no infringement of the method . . . because the performance of all the patent's steps is not attributable to any one person." Limelight was off the hook.
Does this mean that a company can freely infringe its competitor's patents by hiring a separate company to perform one or more steps in a method patent? Of course not--if all steps are attributable to an agent, the company controlling that agent can still be liable for direct infringement. In Limelight's case, it was not controlling its customers and they were not its agents. Had Limelight hired another company to conduct the final step of the patent for its customers, that company might constitute Limelight's agent, so all steps would be attributed to a single entity. Under those facts, Limelight could have been liable for direct infringement.
In the second patent opinion issued this week, Nautilus, Inc. v. Biosig Instruments, Inc., the Supreme Court unanimously set a new standard to judge whether a patent is "invalid for indefiniteness." Under the Patent Act, a patent must include "one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as [the] invention." In other words, if a patent claim is too ambiguous or indefinite, the claim is invalid. The Federal Circuit established a rule that a claim passes this test if it is "amenable to construction" and not "insolubly ambiguous." The Supreme Court rejected this rule, finding that it results in too much uncertainty for those who might be accused of infringement. Instead, the new standard established by the Court is "that a patent is invalid for indefiniteness if its claims. . . fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention." Admittedly, this definition does not require that patent claims be perfectly unambiguous. But, it provides more certainty than the Federal Circuit's test.
Can anyone read the Supreme Court's tea leaves from these opinions to decipher a new direction of patent law? Probably not. All we can draw from these decisions is that the Supreme Court appears to be speaking on patent law with one voice. In both cases, the Court has also given greater force to common defenses to patent infringement suits. While it is impossible to conclude that the Justices have a "defense friendly" view of patent cases in general, the Court's activity in this area may continue to strengthen the defenses of those fighting claims of infringement.
Spotts Fain publications are provided as an educational service and are not meant to be and should not be construed as legal advice. Readers with particular needs on specific issues should retain the services of competent counsel.