SCOTUS Takes on Patents in a Big Way

Updated (1/23/14): Medtronic has been decided. The Federal Circuit was unanimously reversed. You can read the opinion here.

At the end of last week, the Supreme Court granted petitions for certiorari for two more patent cases. That means that there will probably be six patent cases decided this term. And several of them are big.

Here’s a very quick summary of the issues in the cases the Court will hear (or has heard) this term:

1. Medtronic, Inc. v. Mirowski Family Ventures

This case was argued back in November. Essentially, Medtronic licenses patents from Boston Scientific for a type of pacemaker. Medtronic doesn’t want to have to pay royalties for new products that it doesn’t believe infringe the licensed patents, so it filed a declaratory judgment action against Boston Scientific, asking the court to declare that Medtronic’s new devices don’t infringe Boston Scientific’s patents. The issue is whether Medtronic has to prove its devices don’t infringe, or Boston Scientific has to prove that they do.

2 and 3. Octane Fitness v. Icon Health and Fitness and Highmark Inc. v. Allcare Management Systems, Inc.

These two cases will be argued the same day, February 26, and they deal with essentially the same issue: when is a case “exceptional” within the meaning of the fee-shifting provision of the patent statute?

The Federal Circuit has set the standard extremely high: a winning defendant must prove by clear and convincing evidence that the patent owner’s claims were objectively baseless (meaning that no reasonable person would think they would succeed) and brought in subjective bad faith (meaning that the patent owner knows that claims are baseless). In practice, it’s rare that a defendant can meet this standard, and because the statute only awards attorneys’ fees but not expenses, it’s common for defendants to just walk away without asking for fees.

4. Alice Corporation Pty. Ltd. v. CLS Bank International

CLS Bank is being argued on March 31, and it is potentially the most important of all of the patent cases this term. The Court will consider whether software is eligible to be patented at all.

We’ll have more on this case in the coming weeks, because it could change the entire software patent landscape.

5. Limelight Networks, Inc. v. Akamai Technologies, Inc.

The Court just agreed to hear this case on Jan. 10. This case could have a big impact on patents for Internet inventions. The basic issue involves what’s called “divided infringement.” Divided infringement occurs if all the steps of a patented method are performed, but they’re split up among different parties. The Federal Circuit has held that those parties aren’t liable for patent infringement, unless they’re very closely connected.

That’s potentially a big hole in the Internet world, if all you have to do to avoid infringing is break up the steps.

In the case being appealed, the Federal Circuit said that it’s possible to be liable for inducing infringement even if the parties wouldn’t be liable for infringing directly because the infringement is divided.

6. Nautilus, Inc. v. Biosig Instruments, Inc.

Nautilus is another case with a lot of potential to change patent law, and the Court granted certiorari the same day as in the Akamai case. The Court will decide the standard for determining when a patent claim is invalid for being too ambiguous. Right now, the Federal Circuit has created a standard that makes it nearly impossible to invalidate a patent claim as being “indefinite” (that’s the term of art meaning that the claim is too ambiguous or vague).