Supreme Court Overrules Federal Circuit Again. And Again.

The Supreme Court issued two unanimous patent opinions today, both overruling the Federal Circuit. The cases are Nautilus, Inc. v. Biosig Instruments, Inc. and Limelight Networks, Inc. v. Akamai Technologies, Inc.

In Nautilus, the Supreme Court rejected the Federal Circuit’s test for determining whether a patent claim was sufficiently “definite.” The Federal Circuit’s test, now unacceptable, would have found a claim indefinite only if it were “insolubly ambiguous.” In practice, this was a standard that was rarely, if ever, met.

The Supreme Court recognized that the Federal Circuit standard was wrong, in that it would create “powerful incentives to inject ambiguity” into claims. Instead, the Court held that “a patent is invalid for indefiniteness if its claims . . . fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.” This “reasonable certainty” test should invalidate many more patents—particularly many of the vague and overbroad patents asserted by patent trolls.

In Akamai, the Supreme Court rejected the idea that a party could be liable for “indirect” infringement even though no “direct” infringement ever occurred. Although this area of the law is complex, it is important that courts reach the right result. An expansion of indirect liability could create a new category of patent defendants: end-users who unknowingly perform one step of a patented method. The Federal Circuit reasoned that in this case, despite the text of the statute, Congress would have wanted the defendant to be found liable even though its customers performed one of the steps of the patent. The Supreme Court saw the mischief that the Federal Circuit’s approach could cause, finding “no principled reason” that would prevent the Federal Circuit from finding infringement in other circumstances based on a notion that “Congress would have wanted it” (even though Congress never actually did).

These rulings mean that the Federal Circuit has been unanimously overruled in every single patent case heard by the Supreme Court this term. Since there have been five decisions, the Federal Circuit is now an extraordinary 0-45 in supporting votes by Supreme Court justices this year. Even the Chicago Cubs have a better record than that.

EFF filed “friend of the court” briefs in both Nautilus and Akamai, urging the Supreme Court to corral the Federal Circuit and restore some sense to patent law. We’re happy to see the Supreme Court do just that. But more work needs to be done, and we hope the Federal Circuit and district courts get the message: it is time for a more balanced system.