On June 2, 2014, the United States Supreme Court released two more unanimous opinions impacting fundamental patent law principles, continuing the recent trend of patent law reform at the High Court.1 The Supreme Court has now unanimously overruled each of the five patent-related decisions by the United States Court of Appeals for the Federal Circuit that it has reviewed this term.2 Many believe this trend merely reflects public focus on patent litigation by non-practicing entities ("the trolls"). Others speculate that the Supreme Court is motivated to address long-standing uncertainties in patent litigation resulting from intra-circuit splits within the Federal Circuit. Regardless of the motivation, recent decisions by the Supreme Court signal a transition period in patent law that compels increased vigilance by practitioners.
No Inducement Without Direct Infringement
In the closely watched Limelight case, the Supreme Court reversed the Federal Circuit and unanimously held that a defendant is not liable for inducing infringement of a patented method unless a single actor performs all of the steps of the method.3 Concisely stated, "there has simply been no infringement" of a method claim "when all the claimed steps cannot be attributed to a single person." In such a case "no direct infringement [is] committed," and a defendant "cannot be liable for inducing infringement that never came to pass." The Court explained that liability for inducing infringement requires a showing of direct infringement, and direct infringement cannot stand unless a single party is responsible for the infringing activity.
The Court recognized that under its interpretation "a would-be infringer [may] evade liability by dividing performance of a method patent's steps with another [party]," but found the example unpersuasive in light of the Patent Act's plain language regarding direct infringement. Further, according to the Supreme Court, the Federal Circuit's holding would necessitate a "free-floating" standard for determining whether multiple parties' activities conflate to a single entity's. As an alternative, the Supreme Court noted that, on remand, the Federal Circuit has the opportunity to revisit the statutory definition of direct infringement.
UPDATE: On August 13, 2015, the Federal Circuit expanded the test for direct infringement of method claims by multiple actors. For analysis of that decision, please see our Alert entitled Federal Circuit Broadens Range of Liability Under Joint Patent Infringement Theories
New Test for Patent Claim Definiteness
The Nautilus case involved the proper standard for judging whether a patent claim is statutorily "definite" under 35 U.S.C. § 112, Para. 2, i.e., whether the claim particularly points out and distinctly claims the subject matter which the applicant regards as the invention. Again in a unanimous decision, the Supreme Court found that "a patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention."
In so holding the Court overturned numerous Federal Circuit decisions which measured indefiniteness according to whether claims were "insolubly ambiguous" or "amenable to construction." According to the Supreme Court, this Federal Circuit standard "invoked a standard more amorphous than the statutory definiteness requirement allows," and did not provide a "test [that] is at least 'probative of the essential inquiry.'" The Federal Circuit’s judgment was vacated, and the case remanded.
At least two other significant patent related cases remain pending before the High Court this term. At minimum, current patent strategies, opinions and defenses must be continuously updated and reviewed as the Supreme Court’s reform continues. We will be looking out for further decisions and providing additional information as it arises.
1 Limelight Networks, Inc. v. Akamai Tech., Inc., Case No. 12-786, 572 U.S. ___ (Jun. 2, 2014) (Slip Op.); Nautilus, Inc. v. Biosig Instrs., Inc., Case No. 13-369, 572 U.S. ___ (Jun. 2, 2014) (Slip Op.).
2 In our April 30, 2014 Alert, we discussed the Supreme Court's unanimous decisions regarding attorneys' fees in patent litigation.
3 We discussed the Federal Circuit's now-overturned Limelight decision in greater detail in our September 5, 2012 Alert.