NAUTILUS, INC. V. BIOSIG INSTRUMENTS, INC.

Patent: Decided: June 3, 2014

Holding: In a unanimous (9-0) opinion authored by Justice Ruth Bader Ginsburg, the Court held that the Federal Circuit’s indefiniteness standard bred “lower court confusion” because it “lack[ed] the precision § 112, ¶2” demands.

The Federal Circuit has consistently held that § 112, ¶2 of the Patent Act, requiring that patent claims particularly point out and distinctly claim the subject matter of the invention, is satisfied, and a claim is not invalid as indefinite, so long as the claim is “amenable to construction,” and is not “insolubly ambiguous.” See, e.g., Datamize, LLC v. Plumtree Software, Inc., 417 F.3d 1342, 1347 (Fed. Cir. 2005).

Finding this standard “can leave courts and the patent bar at sea without a reliable compass,” the Court held that “insolubly ambiguous” lacked precision. The Court read “§112, ¶2 to require that a patent’s claims, viewed in light of the specification and prosecution history, inform those of ordinary skill in the art about the scope of the invention with reasonable certainty.” In the Court’s view, the new “reasonable certainty” standard “mandates clarity, while recognizing that absolute precision is unattainable.”

Many in the patent bar are reading Nautilus as lowering the standard for proving indefiniteness. But how will invalidity be shown under the new standard? Nautilus requires an accused infringer to show a person of ordinary skill cannot be “reasonably certain” about a claim’s definition, inviting a court to make a factual determination of what is “reasonable” when construing the claim. If fact-finding on invalidity is involved, the question then becomes whether an accused infringer must prove those facts by “clear and convincing evidence.”

LIMELIGHT NETWORKS, INC. V. AKAMAI TECHS., INC.

Patent: Decided: June 2, 2014

Holding: Induced infringement requires proof of an underlying direct infringement. A method claim, the Court found, is directly infringed when one either completes each step or directs or controls each step’s performance.

Induced infringement, under § 271(b) of the Patent Act, requires a finding of a predicate direct infringement under § 271(a). The Court found that the en banc Federal Circuit misapplied this rule by failing to apply (or reconsider) the Federal Circuit’s own precedent in Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008) and thus reversed.

Limelight, the respondent and accused infringer, performs all but one step of the patented method claim, the “tagging” step, which Limelight’s customers may perform. On behalf of a unanimous (9-0) Court, Justice Samuel B. Alito reasoned that induced infringement requires an underlying direct infringement. Without deciding the accuracy of the Federal Circuit’s Muniauction decision, he reasoned there can be no indirect infringement when “the performance of all the patent’s steps is not attributable to any one person.” Muniauction instructs there was no direct infringement; thus, there was no indirect infringement.

Commentators are touting this decision as a deterrent to non-practicing entities, which may bring induced infringement claims without being able to prove the elements of Muniauction. The question then becomes whether the Federal Circuit (or the Supreme Court, given the opportunity) will revisit the Muniauction standard for direct infringement.

AMERICAN BROADCASTING COMPANIES, INC. V. AEREO, INC.

Copyright: Decided: June 25, 2014

Holding: Aereo’s system, which receives over-the-air television broadcasts and allows users to record them for later playback, publicly performs the programs and, thus, violates the Copyright Act.

The Court’s majority (6-3) opinion, authored by Justice Stephen Breyer, found that Aereo provides a product similar to that of community antenna television (CATV) providers. Because Congress amended the Copyright Act so that CATV transmissions are public performances, and thus subject to copyright protection, Aereo’s devices also fit within this definition. The dissent, authored by Justice Antonin Scalia, posited Aereo does not “perform” anything and compared Aereo instead to a “copy shop that provides its patrons with a library card,” permitting the user to select which publicly-available programs to record. Despite this disagreement, the dissent “share[d] the Court’s evident feeling that what Aereo is doing . . . ought not to be allowed.”

Two interesting questions remain. First, the Court’s narrow holding leaves undecided whether other streaming or cloud-based systems infringe. Second, because the Supreme Court’s opinion likened Aereo to a CATV system, Aereo now is seeking a compulsory license like those granted to cable systems under the Copyright Act. If successful, Aereo would have a complete defense to the copyright claims. For more on Aereo, see the recent article by DLA Piper’s Andrew L. Deutsch, Melissa A. Reinckens and Marc E. Miller.

CASES TO WATCH

TEVA PHARMACEUTICALS USA, INC. V. SANDOZ, INC.

Patent: Argument: October 15, 2014

Issue: Whether a district court’s factual finding in support of its construction of a patent claim term may be reviewed de novo, as the Federal Circuit requires, or only for clear error, as Federal Rule of Civil Procedure 52(a) requires.

KIMBLE V. MARVEL ENTERPRISES, INC.

Patent licensing: Cert. Pending

Issue: Whether the Supreme Court should overrule Brulotte v. Thys Co., which held that “a patentee’s use of a royalty agreement that projects beyond the expiration date of the patent is unlawful per se.”

CISCO SYSTEMS, INC. V. COMMIL USA, INC. 

Patent: Cert. Pending

Issue: Whether, and in what circumstances, the Seventh Amendment permits a court to order a partial retrial of induced patent infringement without also retrying the related question of patent invalidity.

COMMIL USA, LLC V. CISCO SYSTEMS, INC.

Patent: Cert. Pending

Issues: (1) Whether the Federal Circuit erred in holding that a defendant’s belief that a patent is invalid is a defense to induced infringement under 35 U.S.C. § 271(b); and (2) whether the Federal Circuit erred in holding that Global-Tech Appliances, Inc. v. SEB S.A. required retrial on the issue of intent under 35 U.S.C. § 271(b) where the jury found the defendant had actual knowledge of the patent and was instructed that “[i]nducing third-party infringement cannot occur unintentionally.”