Supreme Court Unanimously Smacks Down CAFC Two More Times

from the because-cafc-is-a-joke dept

What do you know? The Supreme Court has completely shot down two more decisions from the "patent appeals court," which is supposed to be an expert in patent law. The court of appeals for the Federal Circuit (CAFC), which was set up explicitly to cover "complicated" patent cases, has been getting shot down by the Supreme Court left and right over the past few years, often unanimously. It happened a month ago on fee shifting and it happened twice more today on key patent cases: Limelight v. Akamai and Nautilus v. Biosig.

In the Limelight case, CAFC had made the somewhat ridiculous ruling that companies can be guilty of inducing infringement even if there is no direct infringement. Basically, everyone agreed that at no point did Limelight actually infringe on Akamai's patents, because part of the steps are actually completed by Limelight's users, rather than Limelight itself. The CAFC felt that was good enough, and even though at no point does Limelight do everything in Akamai's patent, it still infringed. The Surpeme Court, thankfully, found this ruling to be nonsensical. And, once again, the Supreme Court smacks around the CAFC in its ruling:

Neither the Federal Circuit... nor respondents... dispute the proposition that liability for inducement must be predicated on direct infringement. This is for good reason, as our case law leaves no doubt that inducement liability may arise “if, but only if, [there is] . . . direct infringement.”...

One might think that this simple truth is enough to dispose of this appeal. But the Federal Circuit reasoned that a defendant can be liable for inducing infringement under §271(b) even if no one has committed direct infringement within the terms of §271(a) (or any other provision of the patent laws), because direct infringement can exist independently of a violation of these statutory provisions...

The Federal Circuit's analysis fundamentally misunderstands what it means to infringe a method patent.

Yes, the Supreme Court is saying that the CAFC -- which is supposed to be the expert in understanding patents and patent law -- fundamentally misunderstands what it means to infringe on a patent. Ouch.

The ruling by Justice Alito goes on to point out that the CAFC seems to be trying to set up an entirely new concept of inducing infringement where there is no direct infringement -- and that's clearly not what the law allows. As the ruling notes, if Congress wanted that to be the law, it could write that into the law. But it has not. The Supreme Court further notes (importantly) that "inducement" is different than the criminal standards of "aiding and abetting" (this is an issue we've discussed repeatedly in copyright law -- so everyone insisting that inducing and aiding & abetting are equivalent may want to read carefully what SCOTUS has to say here).

The Nautilus case involved "ambiguous" patent claims -- a major problem in the patent world today. Once again, CAFC took a rather patent maximalist view of things, allowing many ambiguous claims, but the Supreme Court unanimously rejects that as ridiculous:

We conclude that the Federal Circuit’s formulation, which tolerates some ambiguous claims but not others, does not satisfy the statute’s definiteness requirement.

The CAFC standard was that you could reject the claim only if it was "insolubly ambiguous" -- in other words, only if a court couldn't work through multiple interpretations to pick a reasonable one. But, as noted above, the Supreme Court says that goes against the very basic idea of patent law. As the ruling (by Justice Ginsburg) notes:

It cannot be sufficient that a court can ascribe some meaning to a patent’s claims; 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. To tolerate imprecision just short of that rendering a claim “insolubly ambiguous” would diminish the definiteness requirement’s public-notice function and foster the innovation-discouraging “zone of uncertainty,” ... against which this Court has warned.

Rather than choose a different standard, however, the Supreme Court punts the case back to CAFC to see if it can try again, this time with a better standard that maybe, just maybe, the Supreme Court will accept next time around.

Between these recent decisions and the current ethics scandal at CAFC, at what point will we finally consider just putting the court out of its misery. It has never served any purpose other than to massively expand patent law way outside of what the law is supposed to do. It's great that the Supreme Court has finally been putting it back in line, but it seems like there must be a more effective way of doing this than having CAFC hand down so many bad decisions.

Filed Under: ambiguous claims, cafc, claims, direct infringement, indirect infringement, inducement, insolubly ambiguous, patent trolls, patents, supreme court
Companies: akamai, biosig, limelight, nautilus