On June 2, 2014, the U.S. Supreme Court issued two unanimous decisions reversing the Federal Circuit in patent law cases. The first decision clears the way for more challenges to vague patent claims, while the second makes it more difficult to prove induced infringement.

In Nautilus Inc. v. Biosig Instruments, Inc., No. 13-369 (U.S., June 2, 2014), the Supreme 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."

Under 35 U.S.C. § 112, ¶ 21 a patent must include "one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as [the] invention." A claim that fails to meet this prerequisite is invalid for indefiniteness. Previously, the Federal Circuit held that a claim met the requirements of § 112, ¶ 2 so long as it was "amenable to construction" and, as construed, was not "insolubly ambiguous." Under these tests, claims were found acceptable under § 112, ¶ 2 so long as an interpreting court could ascribe some meaning to the claims. Nautilus and its supporters argued, however, that if "multiple interpretations reflecting markedly different understandings" of a claim's scope were reached by multiple parties, then such a claim ran afoul of the requirements of § 112, ¶ 2.

The Supreme Court rejected the Federal Circuit's test as failing to meet the statutory requirements for definiteness because the test "can breed lower court confusion, for they lack the precision §112, ¶ 2 demands." The Court noted that the definiteness inquiry must focus on "the understanding of a skilled artisan at the time of the patent application, not that of a court viewing matters post hoc."

In Limelight Networks, Inc. v. Akamai Technologies, Inc., No. 12-786 (U.S., June 2, 2014), the Supreme Court held that one cannot be liable for inducing another party to infringe under Section 271(b) of the Patent Act without a determination that such other party actually committed direct infringement under Section 271(a) or any other statutory provision.

Previously, the Federal Circuit found that liability under Section 271(b) arises even if no single party would be liable as a direct infringer, so long as the other party carried out some steps constituting the claimed method and merely encouraged another unrelated party to carry out the remaining steps. The Supreme Court rejected this test, stating that the Federal Circuit's ruling "fundamentally misunderstands what it means to infringe a method patent." The Supreme Court noted that its own precedent makes it clear that inducement liability under Section 271(b) only exists where there is also a direct infringer.

The Court noted that its decision permits "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." The Court acknowledged concerns over this anomaly, but noted that this is the direct consequence of the Federal Circuit's prior determination in Muniauction that "direct infringement" [under Section 271(a)] requires a single party to perform every step of a claimed method2. Although the Supreme Court assumed without deciding that theMuniauction rule was correct, the Court suggested that the Federal Circuit could revisit, and potentially alter, the Muniauction rule on remand so as to address these concerns.

These decisions can impact a patentee's ability to enforce its rights and highlight the importance of thoughtful claiming strategies and the careful drafting and prosecuting of claims, all with an eye towards potential infringers. Similarly, the Limelight decision illustrates the necessity of evaluating third-party patent claims with consideration of who is actually performing each step in a claimed method.