Supreme Court Sinks Nautilus, Reformulates the “Definiteness” Requirement for Patents

By Thomas Tuytschaevers. A member of our Patent Practice Group

 

In yet another rejection of prevailing norms for determining patent validity, the U.S. Supreme Court refined the standard by which courts assess the clarity of patent claims. Until now, a patent claim was deemed insufficiently clear, and therefore invalid for indefiniteness, only if a court found the claim language to be “insolubly ambiguous.”

In its June 2 decision in Nautilus, Inc. v. Biosig Instruments, Inc., the Court held that a patent is invalid for indefiniteness if its claims fail to define the scope of the invention with “reasonable certainty.” This lower standard will make patent claims easier to invalidate and portends a surge of indefiniteness defenses in patent litigation.

A patent is a property right that allows the owner to exclude others from using an invention and, “like any property right, its boundaries should be clear.” To that end, U.S. patent law requires that a patent include “claims particularly pointing out and distinctly claiming the subject matter” that the inventor regards as the invention. A claim that does not meet these criteria fails to meet the law’s “public-notice function” because it fails to define the scope of the patent owner’s right to exclude, and is therefore invalid for being indefinite.

However, the courts have recognized that written language is an imperfect tool. The limits of written language are sometimes evident in patent claims that, by definition, describe a new invention, something that has never previously been described. Fittingly, courts have acknowledged that absolute precision in patent claims is unattainable. The issue in Nautilus focused on “just how much imprecision [the law] tolerates.”

Biosig patented a monitor useful for measuring a person’s heart rate while exercising, for example, on a treadmill. Such measurements are challenging because it is difficult to distinguish the electrical signal produced by the heart (an “ECG” signal) from electrical signals produced by other hard-working muscles (“EMG” signals).

Biosig realized that a user’s heart signal appears differently at the user’s left hand than at the user’s right hand, while muscle signals appear the same way at both hands. Biosig capitalized on this discovery by developing a circuit that measures the heart and muscle signals at both hands using two pairs of electrodes – one pair for each of the user’s hands. The patented Biosig circuit subtracts one of the measurements from the other to cancel out the muscle signals and leaves only the heart signal. (More)

Supreme Court Rejects Inducement Liability Where There’s No Direct Infringer

By Kerry Timbers. Co-Chair of our Litigation Practice Group

 

The issue of “divided infringement” — where multiple parties “share” infringement by performing different steps of a method claim — has vexed the courts of late, with the Federal Circuit see-sawing between two very different interpretations of the patent law. The Supreme Court has recently entered the fray, unanimously delivering the blunt criticism that the Federal Circuit, which handles all patent infringement appeals, “fundamentally misunderstands what it means to infringe a method patent.”

The bottom line from the Supreme Court, in Limelight Networks v. Akamai Technologies, is that there is no infringement, direct or by inducement, unless one party performs every step of the method, either itself or through control of another, such as by contract.

The patent asserted in Limelight claims a method for delivering electronic data using a content delivery network (CDN). The patent calls for, among other things, certain components of a website, like music or video files, to be “tagged” for storage on certain servers within the CDN. This increases the speed of accessing files.

The alleged infringer, Limelight, operated a CDN and performed all but one step of the patented method. It left to its customers, however, the task of tagging the files they wanted placed on Limelight’s servers. The claimed method was performed in its entirety, but no one actor performed all the steps.

There is good precedent for rejecting the idea that Limelight could be charged with direct infringement. The Federal Circuit held in 2007 and 2008, in BMC Resources. v. Paymentech and Muniauction v. Thomason, that there is no direct infringer unless a single actor performs all the method steps himself, or all the steps are performed on his behalf by another who is controlled by the alleged infringer.

The question in Limelight was whether Limelight might be guilty of inducing infringement, even in the absence of a direct infringer, because it encouraged or instructed the customer to perform the missing step, thereby ensuring every method step would be performed, albeit not by a single actor. Both BMC Resources and Muniauction answered no — to have inducement, you must first have a direct infringer.

In 2011, as we reported when Akamai’s case against Limelight first came before the Federal Circuit, a three-judge panel of that court further tightened the standard, making clear that mere directions or instructions to another entity — absent a legal obligation of that entity to perform the steps — is insufficient to establish direct infringement, and without that, there could be no inducement. (More)

The Supreme Court Bans Aereo’s Service: An Odd Decision With an Odd Rationale

By Timothy Murphy. Co-chair of our Patent Practice Group

 

Last week the Supreme Court decided, in American Broadcasting Companies, Inc. v. Aereo, Inc., that Aereo was infringing the copyrights of the television broadcasters. This decision was not a surprise in light of the comments of the justices during the April oral argument, which I discussed in “How Will the Supreme Court Decide the Aereo Case?” The court voted 6-3 with Roberts, Kennedy, Ginsburg, Sotomayor and Kagan joining Breyer’s decision in favor of the broadcasters, and Thomas and Alito joining Scalia’s dissent.

Aereo used arrays of small antennas to pick up over-the-air television shows and make them available to Aereo customers. Each customer was assigned a separate antenna. Aereo also allowed its customers to record television shows and save them in a cloud storage dedicated to that customer. For this service, Aereo charged $8 a month. Prior appellate court cases had ruled that cable companies providing such individualized remote storage and playback systems did not infringe the copyright of the content owners. Aereo undoubtedly hoped that this line of thinking would apply to its individualized antennae. ABC and other over-the-air content providers hoped otherwise and sued to enjoin Aereo’s service.

The majority recognized that Aereo and the cable companies distributed content in different ways. However, the majority took the position that—whatever the technical differences may be—Aereo still seemed like and acted enough like a cable company so that, if its technology had existed when Congress passed the Copyright Act of 1976, Congress would have treated Aereo like a cable company, requiring it to pay for the privilege of rebroadcasting over-the-air content. The majority also concluded that Aereo was publicly performing the plaintiffs’ television shows.

An individual is clearly entitled under the law to set up an antenna and record onto a DVR a copyrighted show that was broadcast over the air. But the Aereo majority rejected the view that Aereo was merely a service provider that rented an antenna and a virtual, cloud-based DVR to each of its customers. By providing antennas and a virtual, cloud-based DVR to thousands of subscribers, Aereo crossed a line between what an individual is entitled to do on his or her own and what a company is not allowed to do on a large scale, even if it is merely helping people exercise their legal rights.

Ironically, the more liberal Justices sided with the vested interests—the television broadcasters and cable companies—against the individual who wants an easy, efficient way to enjoy the free over-the-air television transmissions, while the dissenting Justices, who favored allowing individuals to take advantage of the new technology, were from the conservative end of the bench. (More)

Yet Again, the Supreme Court Narrows Patent Eligibility, This Time Targeting Computer-Related Inventions

By Bruce Sunstein. A member of our Patent Practice Group

 

In the wake of its decisions denying eligibility for patent protection to diagnostic procedures (Mayo Collaborative Services v. Prometheus Laboratories, 2012), and isolated genomic DNA (Association for Molecular Pathology v. Myriad Genetics, 2013), the Supreme Court has denied patent eligibility to a computer-implemented invention on the grounds that it is directed merely to an “abstract idea,” in Alice Corporation Pty. Ltd. v. CLS Bank International, decided June 19, 2014.

In what might be a silver lining (or maybe an aluminum foil lining) to this cloud, the Court did not hold all computer-related inventions to be ineligible for patent protection, but only those that are deemed directed to an abstract idea.

Motivating the Court’s decision is a concern that patents impede innovation when they are directed to subject matter that the Court regards as an abstract idea. Abstract ideas are one of three exceptions the Court wrote into section 101 of the patent law, which defines what subject matter is eligible to be considered for patenting.^[1] (Only if subject matter claimed in a patent application is eligible for patenting will the patent application be examined for the additional requirements under patent law that the subject matter must be new^[2], non-obvious^[3], and clearly described^[4] and claimed^[5] in the application.)

The Court explains its rationale for these exceptions by quoting from its Myriad decision: “Laws of nature, natural phenomena, and abstract ideas are the basic tools of scientific and technological work.”^[6] To elaborate on why inventions otherwise eligible to be patented should not be eligible if one of these Court-made exceptions is present, the Court cites its Prometheus decision: “Monopolization of those tools through the grant of a patent might tend to impede innovation more than it would tend to promote it, thereby thwarting the primary object of the patent laws.”^[7] Further relying on Prometheus, the Court admonishes, “We have repeatedly emphasized this concern that patent law not inhibit further discovery by improperly tying up the future use of these building blocks of human ingenuity.”^[8]

So how does the Court determine whether patent claims are directed to an abstract idea—or, for that matter, to a law of nature or natural phenomenon? It specifies a two-step process drawn from Prometheus: “First, we determine whether the claims at issue are directed to one of those patent-ineligible concepts.”^[9] Second, if they are, then there is “a search for an ‘inventive concept’—i.e., an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept  itself.”^[10]  (More)

^[1] Specifically, the wording of 35 U.S.C. § 101 is as follows; “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”

^[2] 35 U.S.C. § 102.

^[3] 35 U.S.C. § 103.

^[4] 35 U.S.C. § 112.

^[5] 35 U.S.C. § 112.

^[6] Slip opinion, p. 6. For ease of reading, quotations from the opinion may omit interior quotation marks, capitalizations, brackets and ellipses found in the original.

^[7] Id.

^[8] Id.

^[9] Slip opinion, p. 7.

^[10] Id.