U.S. Supreme Court Justice Ruth Bader Ginsburg (Diego M. Radzinschi / NLJ)
The U.S. Supreme Court on Monday unanimously slapped down the U.S. Court of Appeals for the Federal Circuit, rejecting two of its patent rulings just over a month after hearing oral arguments in both cases.
The decisions in Limelight Networks v. Akamai Technologies and Nautilus v. Biosig Instruments were the fourth and fifth patent cases in which the Supreme Court reversed the Federal Circuit during the current term. One patent case, possibly the most important, is yet undecided: Alice v. CLS Bank International, testing the patentability of “computer-implemented” inventions. The six patent cases on the docket this term are a record number for the high court since the Federal Circuit opened in 1982.
What’s more, the high court’s opinions on Monday used pointed language in rejecting positions taken by the circuit court, which has nationwide jurisdiction over patent and trademark appeals among other subject areas.
In Nautilus, which sought to define when a patent claim is invalid for being too indefinite, Justice Ruth Bader Ginsburg wrote that the Federal Circuit’s rulings on the subject “can leave district courts and the patent bar at sea without a reliable compass.”
In Limelight, which limited liability for inducing patent infringement, Justice Samuel Alito Jr. said the Federal Circuit “fundamentally misunderstands what it means to infringe a method patent.”
Northeastern University School of Law professor Michael Bennett said the Supreme Court’s language in Limelight “slaps the Federal Circuit’s reasoning quite hard. … Those are practically fighting words.”
Looking at both cases together, Skadden, Arps, Slate, Meagher & Flom intellectual property partner P. Anthony Sammi said, “Today’s decisions suggest the Supreme Court is admonishing the Federal Circuit not to overcomplicate the issues or at least to reconcile the differences fracturing recent Federal Circuit opinions.”
All together it has not been a happy time for the Federal Circuit lately; its chief judge, Randall Rader, stepped aside as chief last month after publication of an email he wrote praising an advocate before the court. Rader, who remains on the court, acknowledged the note “crossed the lines” of judicial ethics. On top of that, influential Judge Diane Wood of the U.S. Court of Appeals for the Seventh Circuit suggested in a speech that it was time to end the Federal Circuit’s exclusive jurisdiction over patent appeals.
The decision in Limelight came remarkably quickly after oral arguments April 30. In a dispute over patents dealing with management of Internet traffic, Akamai sued Limelight in 2005. Akamai claimed that Limelight, along with its customers, performed a series of steps that amounted to infringement. Akamai won a $40 million jury verdict against Limelight, but Limelight appealed, asserting that under patent law, it could only be held liable if it performed all the steps of the patent. On en banc review, the Federal Circuit ruled against Limelight, finding that it could be held liable even if others were involved, under a theory of “induced infringement.”
The Supreme Court reversed, in what Skadden’s Sammi said was a “sea change” that will benefit defendants in patent litigation. Alito said a defendant cannot be held liable for inducing infringement when there had been no direct infringement under patent law.
The Nautilus case stemmed from a dispute over the definiteness of a patent for monitoring the heart rate of people using exercise machines. The Federal Circuit ruled that a patent is definite enough if it is “amenable to construction” and is not “insolubly ambiguous.”
Ginsburg said those terms were not precise enough. The high court sent the case back to the Federal Circuit for reconsideration under a new standard that says a patent is indefinite if its claims “fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.”
Cynthia Kernick, a partner in Reed Smith’s intellectual property practice, said the ruling will help district court judges weed out cases that otherwise would have proceeded to trial or summary judgment. “The prior Federal Circuit standard was itself so indefinite as to not be helpful,” Kernick said.
Contact Tony Mauro at firstname.lastname@example.org.