By Marcelo Copat, Faegre Baker Daniels LLP
On June 2, 2014, the U.S. Supreme Court issued two decisions friendly to patent infringement defendants, unanimously striking down rules created by the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”), the nation’s “patent appeals” court.
The first case, Limelight Networks, Inc. v. Akamai Technologies, Inc., et al., is a software method patent case in which the U.S. Supreme Court reversed a Federal Circuit ruling that made it easier for patentees to win patent infringement cases. The overarching question is whether a party can be liable for inducing infringement when it does not directly infringe the claims of a method patent. Under well established case law, the answer was “no.” In this case, Limelight Networks and its customer, together, performed the steps of the claimed method, and the District Court absolved Limelight Networks because it did not perform all the method steps. The en banc Federal Circuit reversed, holding that by encouraging others to perform the steps it did not perform, Limelight Networks could be liable for induced infringement, even if no one was liable for direct infringement. Relying on its own precedent, a unanimous U.S. Supreme Court reversed, holding that there cannot be induced infringement without direct infringement. The Court declined to address whether the Federal Circuit’s decision in Muniauction, Inc. v. Thomson Corp., 532 F. 3d 1318 (2008), holding that a single party that did not perform all the steps of the method can be liable for direct infringement if it exercised “control or direction” over the party that performed the remaining steps, is correct.
Faegre Baker Daniels LLP filed an amicus brief supporting Limelight on behalf of Cargill, Inc., The Coca-Cola Company, General Mills, Inc., and Hormel Foods Corp.
In the second case, Nautilus, Inc. v. Biosig Instruments, Inc., the U.S. Supreme Court addressed the boundaries of indefiniteness. The overarching question is how much ambiguity in patent claims is permissible. Too little may diminish the value of the patent. Too much may cause the public to give the patent a wide berth to avoid liability, unfairly increasing the deterrent value of the patent. The District Court granted summary judgment to the defendant, finding the claim term “in spaced relationship with each other,” which refers to the placement of electrodes of a heart-rate monitor, was indefinite. The Federal Circuit reversed, finding that the claim term was not indefinite. Under Federal Circuit case law, a claim is indefinite if it is not “amenable to construction” and is "insolubly ambiguous." The U.S. Supreme Court vacated and remanded, finding this formulation too ambiguous, and holding that a patent is invalid as indefinite if the claims “fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention."