2014: The US Supreme Court wrestles with patents

Over the past few years, IP has been in the spotlight south of the border.  It seems that not a day goes by without a patent, trade-mark or copyright story in the popular press (e.g. see smartphone wars).  Changes in the law have also been coming at a fast pace.  Witness the US implementation of the America Invents Act that overhauled the US patent system from a first-to-invent to a first-to-file regime in March 2013, the rash of recent decisions on patentable subject-matter (whether software or biotech), and the heightened awareness of design patents as a powerful weapon in litigation and settlement.

2014 looks to be no different.  Last Friday, the US Supreme Court confirmed that they would hear four IP cases this term.  These are in addition to the CLS Bank case that they already indicated they would hear this Spring.  Three of the cases are patent cases and may have a significant impact on Canadian companies seeking protection for inventions in the US (links are to the CAFC decisions being appealed):

Alice v. CLS Bank will deal with the patentability of computer-implemented inventions.  Only a couple of years after dealing with this issue in Bilski, the US Supreme Court has it back on its plate.  The “abstract ideas” test articulated in Bilski has not helped to clarify the boundaries of patentable subject-matter and what should be considered “too abstract” for patent protection.  The best evidence of this is the decision of the Court of Appeals for the Federal Circuit in this case, in which the bench (sitting en banc) fractured into so many partially concurring and partially dissenting judgments that there is no clear majority decision.  It is unlikely that the USSC will be able to clear up this notoriously difficult issue once and for all, but with the public spotlight currently on the smartphone wars, patent “trolls”, and the anti-software-patents movement, it is an extremely topical issue for the court to take on.  It’s expected to be heard on March 31, 2014.  All innovators that produce software or processor-implemented solutions will need to keep an eye on this.

Limelight v. Akamai will address the issue of “induced infringement”.  Many times a patented method includes a series of steps.  What if one company performs most of the steps and then leaves it to the customer to complete the last step (with instructions from the company as to how)?  Normally “induced” infringement occurs when one party counsels someone else to infringe and that other person actually directly infringes the patent.  Here, there is no one person that actually carries out all the method steps – i.e. no one party is a “direct infringer”.  The CAFC concluded that it was still induced infringement to perform some of the steps and counsel a customer or other party to perform the remaining steps.  This case will be relevant to any company involved in online activity or transactions where certain acts are performed by computers of one entity and other acts are performed by computers of another entity.

Nautilus v. Biosig will tackle the issue of “indefiniteness” in patent claims.  A common complaint about patents is that it is difficult to understand the language.  This is partly due to the challenge of capturing a technical innovation in English, and partly due to sloppy drafting or examination that allows unclear or ambiguous language to appear in granted claims.  In many cases these ambiguities only come to light years later when a potential infringing device is compared to the claim language.  In this case, the claims refer to a “spaced relationship” between two electrodes of a heart monitor.  The district court found that language ambiguous because it did not specify how one would know what size “space” should be used between the electrodes.  The CAFC disagreed and found that anyone skilled in the field could figure out a suitable workable spaced relationship in light of the description within the patent and the intended function of the electrodes.  The Supreme Court will address whether this language needs to have a plain definitive meaning on its face or whether it is sufficiently clear if it can be understood after some experimentation.  The outcome will impact not only how patent lawyers draft claims going forward, but also whether there are thousands of granted patents that are now likely invalid for being indefinite.


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