At issue in Limelight Networks was whether a defendant may be held liable for inducing patent infringement of a method claim under 35 U.S.C. §271(b) even though no one entity had directly infringed under §271(a). The Supreme Court held that it that it could not, as liability for inducement must be predicated on an act of direct infringement.
In that case, the accused infringer—Limelight Networks, Inc.—performed several steps of the claimed method of delivering electronic data using a content delivery network, but left a further step of “tagging” content for its customers to perform. A divided en banc Federal Circuit found that inducement liability could arise where a defendant carries out some steps of a method patent while encouraging other parties to carry out the remaining steps, even if no individual actor would be liable as a direct infringer according to the single-actor rule in Muniauction, Inc. v. Thomson Corp. The Supreme Court reversed, finding that the text and structure of the Patent Act clearly require that liability for inducement under §271(b) must be predicated on an act of direct infringement under §271(a). Though the Court recognized that its holding would allow a “would-be infringer to evade liability by dividing performance of a method patent’s steps with another whom the defendant neither directs nor controls,” this loophole was a consequence of the Federal Circuit’s interpretation of §271(a) in Muniauction. The Court declined to address whether that interpretation was correct, instead hinting that the Federal Circuit should revisit the issue on remand.
In the second decision—Nautilus v. Biosig—the Supreme Court addressed the standard for finding a patent claim indefinite for failing to meet the requirements of 35 U.S.C. §112, ¶2 (now §112(b)). Section 112, ¶2 requires that a patent specification "conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as [the] invention.” Under Federal Circuit case law, a patent claim was indefinite for failing to meet this threshold “only when it was ‘not amenable to construction’ or [was] ‘insolubly ambiguous.” In Nautilus, the Supreme Court rejected this “insolubly ambiguous” standard, thus lowering the bar for challenging the validity of a patent for failure to meet the requirements of §112, ¶2.
In reaching this decision, the Supreme Court weighed two competing concerns: that the definiteness requirement needs to take into account the inherent limitations of language and that patents must be precise enough to afford clear notice to the public of what is claimed. The Court found that while the Federal Circuit’s application of its “insolubly ambiguous” standard may be consistent with the statutory intent of §112, ¶2, the standard as expressed diminished the definiteness requirement’s public-notice function by tolerating imprecision just short of rendering a claim “insolubly ambiguous.” In place of the “insolubly ambiguous” standard, the Court held 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.” Unfortunately, the Court declined to provide any guidance as to how to apply this new standard. Instead, the Court remanded the case to the Federal Circuit to apply the new standard to the patent claims at issue.
The Supreme Court has now reversed the Federal Circuit in the five patent decisions released this year (Highmark Inc. v. Allcare Health Management Systems, Inc., Octane Fitness v. Icon Health and Fitness, Medtronic v. Mirowski Family Ventures, LLC, Nautilus, and Limelight). We are still awaiting the Supreme Court’s opinion in Alice Corporation Pty. Ltd. v. CLS Bank International, addressing the patent eligibility of computer-implemented inventions under 35 U.S.C. §101.