Supreme Court Decisions Increase Risks for Patent Owners & Alleged Infringers
Intellectual Property Update
Date: June 17, 2014
In Octane Fitness, LLC v. ICON Health & Fitness, Inc., one of two decisions issued April 29, 2014, the U.S. Supreme Court made it easier for the winning party in a patent case – either the patent owner or the alleged patent infringer – to be awarded attorneys’ fees. The Court held that attorneys’ fees can now be awarded if the case “is simply one that stands out from others with respect to the substantive strength of a party’s litigating position … or the unreasonable manner in which the case was litigated” (emphasis added). The decision might be helpful in curbing frivolous lawsuits brought by owners of specious patents, but it will make it riskier for big and small companies alike to pursue legitimate patent infringement claims. Because attorneys’ fees in a patent case can easily run into the millions of dollars, companies will do well to seek reasonable resolutions of patent disputes before battling in court.
In a companion case issued April 29, Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., the Court compounded the added risks of attorney fee awards when it said the U.S. Court of Appeals for the Federal Circuit should give more deference to district court judges’ decisions to award or not award attorneys’ fees. District court judges’ decisions vary widely, and seemingly unreasonable attorney fee decisions are now more apt to be affirmed with less scrutiny on appeal.
In a third case, Nautilus v. BioSig, decided June 2, the Supreme Court warned patent applicants to be more clear in defining their inventions in patent claims. According to the Court’s new indefiniteness standard, a patent claim should hereafter be found invalid for indefiniteness if the claim, when read in light of the patent’s specification and prosecution history, “fails to inform, with reasonable certainty, those skilled in the art … about the scope of the invention.” The Court’s new standard replaces the Federal Circuit’s insolubly ambiguous standard. The Court’s decision stresses that clarity in patent claiming is important and underscores the importance of clarity in the new standard by saying “the definiteness requirement, so understood, mandates clarity, while recognizing that absolute precision is unattainable.” Patent practitioners might argue that claim terms should be considered sufficiently definite if they understand the terms, but the Court says that “patents are not addressed to lawyers, or even to the public generally, but rather to those skilled in the relevant art.”
With this decision, the Court introduces a somewhat hazy timing element into the indefiniteness analysis when it says that “the definiteness inquiry trains on the understanding of a skilled artisan at the time of the patent application, not that of a court viewing matters post hoc.” In addition, the decision is unclear as to whether an entire patent will now be invalidated if just one of its claims is indefinite. Historically, an indefinite claim has been independently invalidated without affecting the entire patent’s validity. This decision stresses the need for patent applicants to compose patent claims that a person of ordinary skill in the art can reasonably understand when reading a claim in light of the patent’s specification and prosecution history. In addition, if later court decisions make clear that an entire patent will not be invalidated due to a single indefinite claim, patent applicants should consider including multiple claims that delineate the invention in different ways.
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