Supreme Court Update: Nautilus, Inc. v. Biosig Instruments, Inc. (13-369), Limelight Networks v. Akamai Technologies (12-786), and Order List

June 3, 2014 Supreme Court Update

Greetings, Court fans!

It's been a rough couple of days for the Federal Circuit Court of Appeals. On Friday, its Chief Judge stepped down in the wake of a teapot-sized tempest over his sitting on an appeal after sending a laudatory email to one of the attorneys involved. On Monday, the Supreme Court handed down more bad news, reversing the Federal Circuit in two patent cases, and in each case castigating the lower court for straying from language of the Patent Act.

First, in Nautilus, Inc. v. Biosig Instruments, Inc. (13-369), the Court took on the standard for determining whether a patent claim is sufficiently definite to satisfy the Patent Act's requirement that a patent specification "conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the application regards as [the] invention." In a unanimous opinion authored by Justice Ginsburg, the Court rejected the Federal Circuit's standard—that a claim is sufficiently definite if it is "amenable to construction" and not "insolubly ambiguous"—and instead concluded 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."

The invention in this case? A more accurate heart-rate monitor for exercise machines that eliminates the electrical interference caused by the exerciser's skeletal muscles. Picture the handles of your StairMaster. (You don't have a StairMaster?) The ‘753 patent at issue here comprises a cylindrical bar that the user grips, which contains, among other things, two electrodes "mounted . . . in spaced relationship with each other." Biosig owned the patent, but StairMaster (now owned by Nautilus) began selling . . . StairMasters containing the patented technology without a license. Biosig sued, but the District Court granted summary judgment in favor of Nautilus on the ground that the claim term "in spaced relationship with each other" failed the Patent Act's definiteness requirement. The Federal Circuit reversed, however, finding that the claim term was not "insolubly ambiguous."

The Court reversed, rejecting the "insolubly ambiguous" standard and substituting a more stringent requirement that a patent claim inform, with reasonable certainty, those skilled in the art about the scope of the invention. This standard, Justice Ginsburg wrote, satisfies the competing demands of the Patent Act. On the one hand, it allows for a modicum of uncertainty as the "price of ensuring the appropriate incentives for innovation." On the other hand, it requires that a patent be precise enough to afford clear notice of what is claimed, thereby "appris[ing] the public of what is still open to them." Having articulated this standard of precision, however, the Court declined to apply it in to the ‘753 patent. Instead, it remanded the case to the Federal Circuit to reconsider, under the proper standard, whether the relevant claims of the ‘753 patent are sufficiently definite.

The Federal Circuit was knocked down again in Limelight Networks v. Akamai Technologies (12-786), which addressed whether a defendant can be liable for inducing infringement of a method patent under § 271(b) of the Patent Act, if there was no direct infringement under § 271(a).

As Justice Alito explained in another unanimous opinion, a method patent claims a number of steps, and the Court has previously held that a method patent cannot be infringed unless the infringer carries out all of the steps of the method. Here, Akamai owned a patent for a method of delivering electronic data using a content delivery network. One of the steps of the method involves "tagging" certain components of a Web site (like music files) to be stored on Akamai's servers and accessed from those servers by Internet users. Limelight also operated a content delivery network, using many of the steps claimed in Akamai's patent. But instead of itself tagging Web site components for storage on its servers, Limelight required its customers to perform that step. A divided en banc panel of the Federal Circuit concluded that, though Limelight could not be liable for direct infringement, it could be liable for induced infringement because it carried out some of the steps of the Akamai's' method and encouraged others to carry out the remaining steps.

The Supreme Court disagreed. Justice Alito noted that it was common ground that liability for induced infringement must be predicated upon direct infringement and the parties agreed there was no direct infringement in this case. "One might think that this simple truth is enough to dispose of this appeal," he remarked—and it pretty much was. Limelight could not be liable for induced infringement because there was no direct infringement. No one person or party carried out all of the claimed steps of Akamai's patent. Alito rejected Akamai's arguments, imported from tort law and the criminal aiding-and-abetting doctrine, and scolded the Federal Circuit for "creat[ing] liability for inducement of non-infringing conduct where Congress has elected not to extend that concept."

In keeping with its patent law theme, the Court also asked the SG to weigh in with its views on the cert petition in Kimble v. Marvel Enterprises, Inc., which asks: "Whether this Court should overrule Brulotte v.Thys Co., 379 U.S. 29 (1964)" which held that "a patentee's use of a royalty agreement that projects beyond the expiration date of the patent is unlawful per se."

We'll be back shortly to bring you the Court's last decision from Monday, Bond v. United States (12-158), and whatever else the Court sends our way. With nearly 30 decisions still to be released, you can expect to hear from us often this month!

Kim, Jenny & Tadhg